Judge Orders Oracle Vs. SAP To Mediation

The ruling involving TomorrowNow is a win for SAP, which could now avoid potential negative publicity from a drawn-out trial.
There is less liklihood of a long, drawn-out courtroom drama in Oracle's lawsuit against SAP alleging "corporate theft on a grand scale," involving document downloads by SAP's TomorrowNow subsidiary.

A judge with the U.S. District Court in San Francisco Wednesday ordered the case to mediation.

The order is a win for SAP, which has long argued that the case should be settled by mediation, while Oracle has pushed for a trial. Mediation means far less risk of negative publicity for SAP, which has acknowledged "inappropriate" downloads of documents. The case won't be judged by a jury, but encourages the companies to work out their dispute before a judge acting as mediator. It'll also be less costly, time consuming, and will likely reduce publicity of further details of the dispute. An effort at mediation, however, does not guarantee that case never goes to trial.

SAP considers the ruling "appropriate," said an SAP spokesman Thursday. Oracle could not be reached for comment Thursday morning. The order, however, noted that Oracle "anticipates" filing an amended complaint.

Oracle filed a civil lawsuit against SAP last March, alleging "corporate theft on a grand scale." Oracle claimed employees at TomorrowNow, a provider of IT consulting and support for Oracle technologies, "copied and swept thousands of Oracle products and other proprietary and confidential materials into its own servers" using fake logins or credentials stolen from Oracle customers such as Bear Stearns, Honeywell, and Merck. The documents allowed SAP "to offer cut-rate support services to customers who use Oracle software, and to attempt to lure them to SAP's applications software," Oracle charged. Oracle later amended its suit to include copyright and breach-of-contract claims.

SAP acquired TomorrowNow in 2005, admittedly as part of its plan to lure customers over from Oracle to SAP technologies.

In its July 2 response to Oracle's lawsuit, SAP admitted that TomorrowNow employees downloaded thousands of documents that customers weren't licensed to have, but it said those documents were never seen by anyone within SAP. SAP claimed the documents were obtained "on behalf" of customers, apparently trying to prove they were not used for competitive purposes. In an apparent house cleaning, TomorrowNow's chief executive and several managers resigned from the company in November.

Prior to a case management conference before the court in September, SAP had issued this statement: "Oracle's statement of 'facts' is dramatic but inaccurate. This case, in short, is about whether TomorrowNow exceeded its customers' rights in downloading certain materials. That is not a matter of 'corporate theft on a grand scale.'" SAP concluded the statement with a request that the case be sent to mediation.

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