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SAP Seeks Confidential Oracle Data

Observers say Oracle is unlikely to give in to SAP's demands, reducing the possibility of a pretrial settlement in the long-running dispute.

In its long-running legal dispute with Oracle, SAP last week said it wants Oracle to turn over sensitive financial data about the profitability of its PeopleSoft and JD Edwards products.

Oracle sued SAP in California in March 2007, alleging that SAP "is engaged in systematic, illegal access to -- and taking from -- Oracle's computerized customer support systems." Describing the case as "corporate theft on a grand scale," Oracle claimed that SAP and its subsidiary, TomorrowNow, violated various computer fraud and competition laws.

"Through this scheme, SAP has stolen thousands of proprietary, copyrighted software products and other confidential materials that Oracle developed to service its own support customers," Oracle's complaint alleges. "SAP gained repeated and unauthorized access, in many cases by use of pretextual customer log-in credentials, to Oracle's proprietary, password-protected customer support Web site."

Oracle claims that SAP's alleged intrusions originated from an IP address in Bryan, Texas, where SAP's TomorrowNow subsidiary is based. TomorrowNow provides support services for certain versions of Oracle's PeopleSoft and JD Edwards software.

At a hearing last week, a joint discovery conference statement reveals that SAP seeks profit margin data from Oracle. Under the Copyright Act, any damages that Oracle might win depend on the actual market value of the infringed work. Thus, SAP sees the profitability of Oracle's PeopleSoft and JD Edwards products as the yardstick by which any possible penalty should be measured.

"[D]uring discovery, Oracle has taken the position that it is unable to determine its profit margins on the two product lines that are at the center of this case, the PeopleSoft and JD Edwards product lines," the filing sates. "Moreover, Oracle has refused to provide the discovery that may allow defendants to determine (or at least make a reasonable estimate of) Oracle's profitability on those product lines. Defendants therefore seek to compel discovery of the financial data necessary to attempt to determine Oracle’s actual profit margins for the PeopleSoft and JDE products and support services."

In July 2007, SAP acknowledged that "some inappropriate downloads of fixes and support documents occurred at TomorrowNow" and announced steps "to strengthen operational oversight at TomorrowNow."

Some observers of the dispute expected that a settlement would follow. But given that Oracle is unlikely to agree to SAP's new demand, that possibility looks increasingly remote. The case is scheduled to go to trial on Feb. 8, 2010.

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