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11/8/2010
09:58 PM
Fritz Nelson
Fritz Nelson
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Oracle CEO Ellison Demands $4 Billion In Damages From SAP

Larry Ellison demands $4 billion for TomorrowNow's copyright infringement, while Oracle's own expert pegs damages at $1.5 billion. (Still looking for HP CEO Leo Apotheker.)

Ellison was not to be rattled on this day, though. He said that at the time he thought SAP's Safe Passage strategy (using TomorrowNow as a gateway) was brilliant, and that it concerned him greatly. Lanier continually pointed out that there wasn't a single email or internal document showing this concern, but Ellison replied, saying, "I don't tend to write these things down." Regarding one particular email sent by Oracle chairman Jeffrey Henley to Juergen Rottler (executive VP of Oracle customer service) about how Oracle had apparently eliminated TomorrowNow as a threat, Ellison said defiantly: "That's not what I believed, but that's what he said."

Ellison also noted that he publicly said at the time that TomorrowNow "might cheat around the edges," and that he "warned them that they had to respect our IP."

Lanier also raised a quote from an article on CNN.com in which Ellison is alleged to have said, regarding Oracle's PeopleSoft acquisition: "We're after their people, their customers, their money. It is not an integration. We will take their top developers, and they will work on our e-business suite." Ellison testified Monday that he didn't say that.

Safra Catz, Oracle's co-president and CFO, showed evidence that PeopleSoft's recurring maintenance business was at a run rate of $1.2 billion per year at the time of Oracle's acquisition. She estimated lost PeopleSoft maintenance revenue alone of $1.8 billion over three years, if SAP had been successful with its Safe Passage using Oracle software licenses.

Catz, like other Oracle execs, expressed optimism about the company's ability to retain customers, even in the face of the SAP/TomorrowNow competitive threat. But much of that belief was based on financial models -- literally hundreds of such models Catz said were built over time as the basis for board approval of the PeopleSoft deal, and models by which Catz and other Oracle executives would be measured over time, she added.

She continually reminded SAP's legal team that all of Oracle's projections were made without knowing about TomorrowNow's copyright infringement.

Catz called the $40 million SAP is hoping to settle for "reward for bad behavior," adding that it's like someone "taking your $2,000 watch, hocking it for $20, and now they want to pay you $20."

Catz's testimony was priceless, and her combat with Lanier was, at times, snarky and entertaining. (Lanier was wise enough to acknowledge her acumen, once characterizing the relationship between Oracle employees and Catz thusly: "I'll bet they don't want to make you mad.")

Now one of the more tedious, but most crucial parts of the trial begins: damage experts. Oracle's Meyer began his slide show presentation disguised as witness examination by putting forth $1.5 billion as the PeopleSoft copyright infringement damages.

Meanwhile, Oracle's legal team continues to search for HP CEO and former SAP CEO Leo Apotheker. "We're trying real hard to find him," Boies said, although he wouldn't reveal specifics about the methods being used, which are likely to involve private investigators. Boies, perhaps in response to criticism from HP, told a gathering of reporters that Apotheker's appearance is important not because of Oracle's desire to attack HP, but because Apotheker was at the center of the infringement, and personally involved in the TomorrowNow operations; in fact, Boies said, Oracle believes that Apotheker was given reports of the TomorrowNow infringements.

The Oracle case against SAP has been hampered by the stonewalling of SAP's executive board. Only SAP CFO Werner Brandt has appeared live in court, although Oracle has video depositions of several other board members, including Apotheker and Henning Kagermann, which have yet to be unveiled. So far, the legal teams have provided the depositions of former board member Shai Agassi, and current board member Gerd Oswald. Neither Brandt, nor Agassi, nor Oswald have provided much for Oracle counsel to sink its teeth into. Together, they've been collectively defiant, curt and vacuous.

"They say they are trying to take responsibility," Boies said, "but they are reluctant to actually say it in court, even now." Indeed, SAP has already admitted to both vicarious and contributory liability, and yet Brandt essentially refused to own up to them, claiming he didn't quite understand the legal nuance of the terminology. Asked if he thought SAP was being truthful, Boies just smiled and said he'd rather not comment.

Fritz Nelson is the editorial director for InformationWeek and the Executive Producer of TechWebTV. Fritz writes about startups and established companies alike, but likes to exploit multiple forms of media into his writing.

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