AllThingsD » TomorrowNow http://allthingsd.com Sat, 11 Feb 2012 06:53:43 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 http://allthingsd.com/theme/images/logo-rss.jpg All Things Digital http://allthingsd.com/ 144 22 Oracle to Court: Let's Try SAP Again http://allthingsd.com/20120207/oracle-to-court-lets-try-sap-again/ http://allthingsd.com/20120207/oracle-to-court-lets-try-sap-again/#comments Tue, 07 Feb 2012 09:50:41 +0000 Arik Hesseldahl http://allthingsd.com/?p=171976 Here we go again. It looks like one of the ugliest trials in the history of the software industry is about to repeat itself.

Last year, the judge offered Oracle a choice: Accept a judgment of $272 million in damages, reduced from $1.3 billion awarded at trial, or seek a new trial. Oracle says in court filings that it wants a new trial.

The key passage of the two-page court filing reads as follows (the word “remittitur” refers to the judge’s previous order reducing the award):

Oracle has no choice but to elect a new trial, as accepting the remittitur would force Oracle to risk waiving its right to appeal the Court’s decision on the motions for judgment as a matter of law and for a new trial. Oracle’s objective is to obtain clarification of the law and, if it is right about what the law is and what the evidence supports in this case, to vindicate the verdict of the jury and Oracle’s intellectual property rights as a copyright owner. Accepting the remittitur would be contrary to this objective.

And that means that the whole thing starts over again.

Calling the $1.3 billion award “grossly excessive,” U.S. District Court Judge Phyllis Hamilton in February granted an SAP request to throw out the award. Hamilton said that Oracle never proved that it lost enough business to justify so large a judgment.

Oracle had won the award in November, after accusing SAP’s now-shuttered TomorrowNow unit of copying its software without paying appropriate licensing fees. It had been the largest judgment ever in a copyright infringement case.

At trial, Oracle accused SAP’s now-shuttered TomorrowNow business unit of illegally downloading Oracle software and then making several thousand copies of it, in order to avoid paying the relevant license fees that are Oracle’s financial bread and butter. Oracle ultimately won the claim, but then the fight turned to damages.

Lawyers for Oracle had argued that the company’s damages should be tied to the value of a hypothetical license that TomorrowNow would have had to pay for the software, had it been properly licensed. For its part, SAP had argued that, as competitors, damages should have been calculated based on profits lost by Oracle and gained by SAP as a result of the infringement, and as such is in a much lower range than what Oracle argued for.

The case has caused a lot of personal enmity between Oracle and SAP, as well as with Hewlett-Packard, especially during the 11-month period when former SAP co-CEO Léo Apotheker was CEO of HP. Apotheker’s first days on the job at HP were marred by his apparent absence from HP headquarters, in what couldn’t help but look like an attempt to avoid being served with a subpoena. Maybe Oracle will try again.

]]> http://allthingsd.com/20120207/oracle-to-court-lets-try-sap-again/feed/ 0 Former SAP Unit Settles Criminal Case http://allthingsd.com/20110908/former-sap-unit-settles-criminal-case/ http://allthingsd.com/20110908/former-sap-unit-settles-criminal-case/#comments Fri, 09 Sep 2011 03:00:57 +0000 Ben Worthen http://allthingsd.com/?p=118998 SAP AG said a now-shuttered subsidiary will plead guilty to settle criminal charges that it illegally downloaded copyrighted material from Oracle Corp.

Charges brought by federal prosecutors against SAP’s former TomorrowNow Inc. unit mirror allegations in a long-running civil case between Oracle and SAP, which are bitter rivals in the software market.

Read the rest of this post on the original site »

]]> http://allthingsd.com/20110908/former-sap-unit-settles-criminal-case/feed/ 0 Judge Throws Out $1.3 Billion Judgment Against SAP as "Grossly Excessive" http://allthingsd.com/20110901/judge-throws-out-1-3-billion-judgment-against-sap-as-grossly-excessive/ http://allthingsd.com/20110901/judge-throws-out-1-3-billion-judgment-against-sap-as-grossly-excessive/#comments Thu, 01 Sep 2011 19:37:55 +0000 Arik Hesseldahl http://allthingsd.com/?p=116235 A judge in Oakland has overturned a $1.3 billion judgment against software company SAP that had earlier been awarded to rival Oracle in a copyright infringement lawsuit.

Calling the award “grossly excessive,” U.S. District Court Judge Phyllis Hamilton granted an SAP request to throw out the award and ruled that SAP should get a new trial for damages unless Oracle accepts her decision to lower the award to $272 million (see the text of the decision below.)

“At trial, Oracle presented no evidence, and did not argue, that it was entitled to a hypothetical license fee because it lost an opportunity to license the works to third parties for the same use. … Thus, Oracle could not reasonably claim that SAP’s infringement diminished the licensing value of the infringed works,” Hamilton wrote in her decision.

Hamilton said that Oracle never proved that it lost enough business to justify a $1.3 billion judgment. “Rather than providing evidence of SAP’s actual use of the copyrighted works, and objectively verifiable number of customers lost as a result, Oracle presented evidence of the purported value of the intellectual property as a whole, elicited self-serving testimony from its executives regarding the price they claim they would have demanded in an admittedly fictional negotiation, and proffered the speculative opinion of its damages expert, which was based on little more than guesses about the parties’ expectations,” she wrote. “At the same time, Oracle urged the jury to disregard evidence of Oracle’s actual customer losses resulting from infringement. Thus, the verdict grossly exceeded the actual harm to Oracle in the form of lost customers.”

Oracle had won the award in November after accusing SAP’s now-shuttered TomorrowNow unit of copying its software without paying appropriate licensing fees. It had been the largest judgment ever in a copyright infringement case.

Lawyers for Oracle had argued that the company’s damages should be tied to the value of a hypothetical license that TomorrowNow would have had to pay for the software had it been properly licensed. For its part, SAP had argued that as competitors, damages should have been calculated based on profits lost by Oracle and gained by SAP as a result of the infringement and as such is in a much lower range than what Oracle argued for.

The case has caused a lot of personal enmity between Oracle and SAP, as well as with Hewlett-Packard’s new CEO, Léo Apotheker, the former co-CEO of SAP. Apotheker’s apparent absence from HP’s headquarters in Palo Alto, Calif., when he first started his job caused some snickers as Oracle proved unable to find him in order to serve him with a subpoena.

Of course the leftover mishegas has a lot to do with the mounting anger apparent in the Oracle-HP litigation over Oracle’s decision to stop supporting Intel’s Itanium chip. As one commenter put it the other day, its not so much about the chip: It’s personal.

Update: SAP just issued a statement: “We are very gratified with the Court’s decision. We believed the jury’s verdict was wrong and are pleased at the significant reduction in damages. We hope the Court’s action will help drive this matter to a final resolution. We are hopeful that this ruling will move the case toward an appropriate final resolution.”

And here’s a statement from Oracle: “There was voluminous evidence regarding the massive scope of the theft, clear involvement of SAP management in the misconduct and the tremendous value of the IP stolen. We believe the jury got it right and we intend to pursue the full measure of damages that we believe are owed to Oracle.”

orcl-sap-090111

Art via icanhascheesburger.com.

]]> http://allthingsd.com/20110901/judge-throws-out-1-3-billion-judgment-against-sap-as-grossly-excessive/feed/ 0 Oracle to SAP: How's This for Grossly Excessive–We Want Another Half-Billion in Damages http://allthingsd.com/20110224/sap-oracle-motion/ http://allthingsd.com/20110224/sap-oracle-motion/#comments Thu, 24 Feb 2011 17:41:28 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=58327 The $1.3 billion jury award given Oracle in its intellectual property infringement case against SAP is not only “grossly excessive,” it’s a “miscarriage of justice” that “shocks the conscience.”

So says SAP in a new motion seeking to sharply reduce that award, which it says is in conflict with copyright law and founded on sheer speculation.

“The jury’s $1.3 billion ‘hypothetical license’ fee award was an unreasonable amount that went far beyond what was needed to make Oracle whole,” SAP argued in its motion. “The enormous fee did not–indeed, could not–represent Oracle’s actual damages because Oracle never lost a license fee from Defendants or anyone else. The Copyright Act does not permit such awards that are un-tethered to a plaintiff’s actual harm, and the hypothetical license claim should not have gone to the jury.”

And so SAP is asking the court to drop the award to no more than $408.7 million or order a new trial.

Oracle, of course, believes the verdict should stand and opposes SAP’s motion. But if its rival should be granted a new trial, Oracle wants to seek an additional half a billion dollars in damages that it feels it lost when the court unfairly excluded its up-sell and cross-sell projections.

“In the event the Court were to order a new trial, however, Oracle respectfully submits that this Court would be required to review all errors at trial, including those errors that prejudiced Oracle and resulted in a reduction of the damages to which it was entitled,” the company argues. “While Oracle believes the jury’s verdict fairly reflects the evidence properly admitted, it also notes that the verdict fell toward the bottom of the range of reasonable license amounts Oracle presented, and that the Court’s rulings on certain issues shifted that range significantly downward. … [It] cut half a billion dollars from the damages opinion that Oracle’s damages expert would have offered and that fact witnesses would have supported with additional testimony and documentary evidence.”

In other words, SAP’s motion is bogus, it doesn’t deserve a new trial, and if it’s granted one Oracle wants the chance at a $1.8 billion award. Oracle’s motion in full below.


1046_Conditional New Trial Motion –

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]]> http://allthingsd.com/20110224/sap-oracle-motion/feed/ 0 SAP Plans to Fight $1.3 Billion Judgment in Oracle Case http://allthingsd.com/20110203/sap-plans-to-fight-1-3-billion-judgment-in-oracle-case/ http://allthingsd.com/20110203/sap-plans-to-fight-1-3-billion-judgment-in-oracle-case/#comments Thu, 03 Feb 2011 23:03:30 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=2799 A federal judge in Oakland, Calif., reaffirmed what a jury had already decided–that the German software company SAP owes Oracle $1.3 billion for the theft of Oracle’s intellectual property by SAP’s now defunct TomorrowNow unit. The order came down from Judge Phyllis J. Hamilton today.

SAP apparently has other plans. Having won in December a small victory over the amount of interest it will have to pay, today SAP said it plans to argue that it shouldn’t have to pay quite as much to Oracle.

In a statement, it called the judge’s order a “procedural matter,” and said it plans to make post-trial motions challenging the amount the jury awarded. If not successful, it may appeal, the company said. Its full statement is below.

“Today the Court entered judgment in the Oracle v. SAP/TomorrowNow litigation, which is a procedural matter that occurs after a jury verdict. As stated before, we have accepted liability for the actions of TomorrowNow and have been willing to fairly compensate Oracle, but we believe that the amount awarded by the jury is disproportionate and wrong. Once the judgment is entered, SAP is permitted to challenge the jury’s award by way of “post-trial motions,” which are made to the trial judge. SAP will file these motions in the coming weeks asking the Court to reduce the amount of damages awarded or to order a new trial. We look forward to the Court’s resolution of the issues we will raise in our post-trial motions. Depending on the outcome of the post-trial motion process, SAP may also consider an appeal.”

Oracle, on the other hand, was happy to take another victory lap. “We are very pleased that the court’s final judgment for $1.3 billion, plus the court-awarded interest and the $120 million SAP paid during trial to settle additional charges, confirms the jury’s verdict against SAP for its massive intentional copyright infringement,” Oracle said in an emailed statement.

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]]> http://allthingsd.com/20110203/sap-plans-to-fight-1-3-billion-judgment-in-oracle-case/feed/ 0 SAP Granted Lower APR Damages Award in Oracle Case http://allthingsd.com/20101229/sap-seeks-0-apr-damages-award-in-oracle-case/ http://allthingsd.com/20101229/sap-seeks-0-apr-damages-award-in-oracle-case/#comments Wed, 29 Dec 2010 12:35:01 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=54745
SAP would rather not pay Oracle interest on top of the $1.3 billlion in damages awarded the company last month. But it has to, now that a court has granted Oracle’s demand for prejudgment interest.

Late Tuesday a Federal judge ordered SAP to pay interest on the gargantuan sum Oracle won against it in a November copyright infringement trial. But it also agreed to calculate that interest using a different method from the one employed by Oracle. And in doing so it lopped about $195 million dollars off the prejudgment interest Oracle had originally sought.

So good news or, rather, significantly better bad news. Certainly, SAP was pleased to learn it’s not obligated to pile quite as much prejudgment interest atop Oracle’s award as it might have been.

“While we believe that Oracle should only be awarded damages, we appreciate that the Court agreed with SAP on the proper calculation of interest in this case which dramatically lowered the amount,” an SAP spokesman told me. “The interest the Court ordered, based on the statutorily-set interest rate of .3 percent and the accrual period of September 29, 2006 through December 23, 2010, is approximately $16.5 million, rather than the over 200 million Oracle was seeking.”

Of course, that doesn’t make Oracle’s damages award any less massive. But then SAP hopes to whittle that down as well. As the company said in its filing last week: “Defendants plan to challenge that verdict on a variety of grounds in their post-judgment motions, including that it is excessive and overcompensates Oracle.”

Oracle declined comment.

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]]> http://allthingsd.com/20101229/sap-seeks-0-apr-damages-award-in-oracle-case/feed/ 0 Oracle to SAP: You Owe Us Another $212 Million http://allthingsd.com/20101210/oracle-wants-another-212-million-from-sap/ http://allthingsd.com/20101210/oracle-wants-another-212-million-from-sap/#comments Sat, 11 Dec 2010 06:15:14 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=54220 Oracle is putting the screws to SAP again.

In court papers filed Friday, the company demanded SAP pay it $212 million in interest on top of the $1.3 billion in damages it was awarded in the TomorrowNow lawsuit. Should Oracle’s demand be approved, SAP’s total penalties would rise to $1.63 billion.

SAP, which argued in court that it should be held liable for no more than $28 million, clearly has no plans to pay Oracle the interest to which it says it’s entitled.

Said an SAP spokesman, “We don’t believe that Oracle is entitled to any additional compensation beyond the final judgement in this case.” 

Reached for comment, Oracle declined to give one.

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]]> http://allthingsd.com/20101210/oracle-wants-another-212-million-from-sap/feed/ 0 Oracle-SAP Verdict: SAP Owes Oracle $1.3 Billion http://allthingsd.com/20101123/oracle-sap-verdict/ http://allthingsd.com/20101123/oracle-sap-verdict/#comments Tue, 23 Nov 2010 22:54:44 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=53149 Billions or millions. That was the central question in the Oracle vs. SAP case and in the end, the jury determined its answer to be billions with “b.” For the theft of Oracle’s intellectual property by its now shuttered TomorrowNow division, SAP must pay Oracle $1.3 billion.

This in addition to the $120 million in attorneys’ fees SAP agreed to pay when the trial first began.

SAP, which believed that the damages amounted to about $28 million, had argued that Oracle was looking for an undeserved bonanza out of the jury, while Oracle contended the market value of licensing the IP was between $1.65 billion and $3 billion.

As Nucleus Research’s Rebecca Wettemann notes, the damage award is “a drop in the bucket” to Oracle, but a stern warning to the industry. Looking forward, she said, “You have to bet Oracle will be reminding customers they’re choosing between thought leaders and intellectual property thieves–and what that indicates more broadly about how SAP does business.”

In a statement issued after the verdict , SAP was contrite:

“We are, of course, disappointed by this verdict and will pursue all available options, including post-trial motions and appeal if necessary. This will unfortunately be a prolonged process and we continue to hope that the matter can be resolved appropriately without more years of litigation. The mark of a leading company is the way it handles its mistakes. As stated in court, we regret the actions of TN, we have accepted liability, and have been willing to fairly compensate Oracle. Throughout this matter, our customers, employees and partners have stood by us and, for that, we are grateful. Our focus now is looking forward, helping our customers be best run businesses, and extending our legacy of industry leadership well into the future. We thank the jury for its diligent service through this lengthy trial and the Court for its supervision of this complex case.”

On behalf of Oracle, President Safra Catz sounded as clinical as Jack Webb wrapping up an episode of “Dragnet.” “For more than three years, SAP stole thousands of copies of Oracle software and then resold that software and related services to Oracle’s own customers,” she said in a statement. “Right before the trial began, SAP admitted its guilt and liability; then the trial made it clear that SAP’s most senior executives were aware of the illegal activity from the very beginning. As a result, a United States Federal Court has ordered SAP to pay Oracle $1.3 billion. This is the largest amount ever awarded for software piracy.”

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[Image credit: Pre-Ellison Samurai image by Artem Mirolevioch]

]]> http://allthingsd.com/20101123/oracle-sap-verdict/feed/ 0 QOTD: What Happened to "He Is Clearly a Very Important Witness in This Case"? http://allthingsd.com/20101123/qotd-343/ http://allthingsd.com/20101123/qotd-343/#comments Tue, 23 Nov 2010 15:35:23 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=53107

“I think it would have been helpful and important for the jury to hear from him. On the other hand, it wasn’t essential. We were able to put our case in anyway.”

– Oracle attorney David Boies changes his tune on the importance of HP CEO Léo Apotheker’s testimony in the company’s copyright infringement lawsuit against SAP

]]> http://allthingsd.com/20101123/qotd-343/feed/ 0 Oracle-SAP: Closing Statements Followed by Closing Insults http://allthingsd.com/20101123/oracle-sap-closing-statements-followed-by-closing-insults/ http://allthingsd.com/20101123/oracle-sap-closing-statements-followed-by-closing-insults/#comments Tue, 23 Nov 2010 09:00:14 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=53083 With closing arguments said and done, the Oracle-SAP case is nearly over, but the companies continue to trade sucker punches outside the courtroom. In dueling statements issued Monday night, Oracle branded SAP an IP plunderer and SAP upbraided Oracle for its impolitic behavior and what it seems to view as poor form. Below, both statements in their entirety.

ORACLE on SAP
“Oracle brought suit to stop the illegal conduct and hold SAP fully accountable for its actions. Four years ago we discovered massive and indiscriminate downloading of software and support materials from an Oracle support Web site.

SAP immediately and, for three and a half years, repeatedly denied wrongdoing and responsibility. But on the eve of trial SAP began a series of admissions to claims of copyright infringement, violations of state and federal computer fraud laws, unfair competition, breach of contract, interference and other claims that settled liability before the trial began. Trial evidence and testimony showed that the SAP Executive Board was fully aware of the illegal activity and still acquired TomorrowNow to unlawfully take Oracle support revenues and move Oracle customers to SAP products and to disrupt and discredit Oracle. SAP not only failed to take action to stop the behavior, but it expanded it for 18 months after Oracle filed suit.

The pre-trial admissions and testimony over the last few weeks have exposed SAP’s scheme to capitalize on the use of stolen intellectual property. While Oracle seeks damages to fairly compensate it for this massive theft, it is perhaps more important to expose the illegal conduct by a dominant player in the industry and to send a message that intellectual property rights must be respected.”

SAP on ORACLE
The time for testimony and sidewalk claims by plaintiff’s counsel are over. The actual testimony took place in court.

We are very proud of the SAP legal team and our counsel Jones Day for their work in presenting our defense. We believe we have presented a solid case for the reasonable and appropriate compensation for damages by the limited actions of TomorrowNow. This case is not about who knew what, did what or supervised what…those issues were handled by stipulations prior to trial. This case is only about the damages, and we trust now in the jury to examine the evidence and testimony and reach a fair and just conclusion.

SAP has a long history as a trusted partner and we believe our legacy will extend beyond this matter. Throughout this matter over these three years, our customers and partners have stood by us and for that we are grateful. The mark of a successful leading company is the way it handles it’s mistakes. As indicated in court, we regret the mistakes of TN, we apologize to Oracle, and we have sought to address these mistakes by compensating Oracle for the damages. All along, we have done the responsible thing by admitting to the mistakes, taking care of the customers, winding down the TN business, and accepting liability. We are confident we can put this matter behind us and continue our leadership of this industry.

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]]> http://allthingsd.com/20101123/oracle-sap-closing-statements-followed-by-closing-insults/feed/ 0 Oracle-SAP Case Closes With $1.67 Billion Difference of Opinion http://allthingsd.com/20101122/oracle-sap-case-closes-with-1-67-billion-difference-of-opinion/ http://allthingsd.com/20101122/oracle-sap-case-closes-with-1-67-billion-difference-of-opinion/#comments Mon, 22 Nov 2010 23:54:07 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=53070 Closing arguments in the Oracle vs. SAP trial went about as expected, with Oracle attorney David Boies urging the jury to drop the hammer on SAP by awarding $1.7 billion in damages for infringement of intellectual property, and SAP attorney Robert Mittelstaedt arguing that to do so would be asinine.

“The defendants have admitted that their infringement was massive and prolonged,” Boies said in his closing statement. “It is clear that SAP’s board and top executives expected it would be worth billions of dollars.” And just because SAP wasn’t able to generate that kind of value from Oracle’s pilfered IP, doesn’t mean it shouldn’t pay full fare for its infringement. “They took it and they have to pay for it regardless of whether they did well or didn’t do well using it.”

But SAP would rather not pay what it describes as a poorly caluclated “bonanza” award. “This case comes down to what is the best measure of compensation,” SAP attorney Robert Mittelstaedt argued. “Oracle’s [proposed damages] are based on guesswork,” while SAP’s are “based on reality.”

And evidently factoring “reality” into the equation cuts a hell of a lot of fat off the damages award at issue here. Because Mittelstaedt says SAP feels it owes Oracle just $28 million, which is, remarkably, even less than the $40.6 million its high-paid damages expert suggested.

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]]> http://allthingsd.com/20101122/oracle-sap-case-closes-with-1-67-billion-difference-of-opinion/feed/ 0 LOLCatz: Safra on The Stand Again in Oracle-SAP Trial http://allthingsd.com/20101120/lolcatz-safra-on-the-stand-again-in-oracle-sap-trial/ http://allthingsd.com/20101120/lolcatz-safra-on-the-stand-again-in-oracle-sap-trial/#comments Sat, 20 Nov 2010 10:00:48 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=52879
Testimony in the Oracle vs SAP trial wrapped up on Friday with a second appearance by Oracle co-President Safra, who said SAP should pay at least $1.6 billion in damages for the copyright infringement’s of its TomorrowNow subsidiary and chided the company for its offer of $40 million.

“[Their offer] doesn’t value our intellectual property at all,” she said, adding that TomorrowNow’s infringement encompassed more than just support documentation. “Yes, there were documents and help guides and things like that, but there was also the software itself–probably millions of lines of code, which is what the products really are….And we spend billions a year on R&D. This is a business where intellectual property is worth billions.”

Greg Lanier, a Jones Day attorney representing SAP, pressed her on that point insisting that Oracle isn’t owed such a large damages award because the value that the company lost to TomorrowKnow’s infringement is that “Oracle doesn’t get the chance to sell that software to someone else.”

But Catz wasn’t having any of it.

“You know, if Warner Brothers had a little subsidiary that copied Disney’s entire library and started selling it for $2 a copy, and they got caught and then offered to give Disney back half of what they made, is Disney’s library only worth $50?” she asked. “I mean, really. It’s valuable. The fact that it was copied doesn’t change that it’s valuable.”

Lanier quickly dismissed Catz’s point as a “colorful analogy,” reminding her that there are only 358 lost customers at issue in this case. Hard to imagine that such a “colorful analogy” in an otherwise tedious enterprise software case didn’t resonate with the jury, though.

Closing arguments in the case begin on Monday, with jury deliberations to follow.

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]]> http://allthingsd.com/20101120/lolcatz-safra-on-the-stand-again-in-oracle-sap-trial/feed/ 0 Oracle Rests SAP Case, Slams HP CEO http://allthingsd.com/20101119/no-hp-ceo-testimony-in-oracle-sap-case/ http://allthingsd.com/20101119/no-hp-ceo-testimony-in-oracle-sap-case/#comments Fri, 19 Nov 2010 19:05:54 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=52955 Just a day or so left now before the jury in the Oracle-SAP trial begins its deliberations. Oracle called its last rebuttal witness early Friday and closing arguments will soon follow. In the end, Oracle opted not to show former SAP chief Léo Apotheker’s videotaped deposition following the advice of lead attorney David Boies, who last week suggested leaving the Hewlett-Packard CEO’s role in all this to jurors’ imaginations might be a better move strategically than showing them Apotheker’s now very dated testimony.

Indeed, speaking to reporters in the courtroom hallway this morning, Boies said that the evidence Oracle presented during the trial proved that Apotheker had knowledge of the copyright infringement scheme at issue in the case. “The testimony and evidence prove that Mr. Apotheker oversaw the copyright infringement scheme,” Boies said. “We did not show the 2 year old video deposition because it was taken before SAP stipulated to liability.”

Of course if Apotheker was as pivotal a figure as Boies maintains, one would think that there would at least be some content in his video deposition worth showing the jury. Certainly, that’s the view of SAP, which continues to maintain that Oracle’s repeated shots at Apotheker are more about the PR trial being conducted outside the courtroom than anything else.

“Today’s proceedings focused on the damages, and we remain confident that we have demonstrated a clear case for fair compensation to Oracle for the limited operations of TomorrowNow,” an SAP spokesperson said in a statement. “We trust now in the jury to bring this matter to an appropriate conclusion.”

HP has not yet commented on Boies’s remarks. The company reports earnings next week, and Oracle would obviously not be unhappy if any of this legal unpleasantness happened to lodge in investors’ minds.

UPDATE: Here’s HP’s official comment: “Oracle’s current stance is clear proof that they have been trying to harass Léo and interfere with his work at HP. As HP has said repeatedly, Oracle had ample opportunity to question Léo in the two years after he gave a full-day deposition. Léo was never asked to give an additional deposition. As HP and SAP have noted, Oracle chose not to include Leo as a live trial witness until after he was named CEO of HP. Léo had a limited role in the matter.”

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]]> http://allthingsd.com/20101119/no-hp-ceo-testimony-in-oracle-sap-case/feed/ 0 Plattner and White No-Shows at Oracle-SAP Trial http://allthingsd.com/20101118/sap-orcl/ http://allthingsd.com/20101118/sap-orcl/#comments Thu, 18 Nov 2010 11:50:33 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=52818 Oracle’s long-running legal battle with SAP and its now-shuttered TomorrowNow subsidiary is heading toward its climax. SAP is expected to rest its case Thursday, after which Oracle will call rebuttal witnesses, among them one of its strongest to date–President Safra Catz, who last week described SAP’s offer of $40 million in damages as “a reward for their bad behavior.” Presumably, Catz will have a bit more to say on that matter, now that SAP’s high-priced damages expert has outlined the calculation that got him to that figure.

Then it’s on to closing arguments, now scheduled for Monday, and finally deliberation. Odd to think that the case has reached this point with so few SAP board members actually testifying live in court. Looking over the final witness list for the trial reveals a number of noteworthy no-shows (beyond Hewlett-Packard CEO Léo Apotheker): Former SAP CEO Henning Kagermann, COO and board member Gerhard Oswald, co-founder and board chairman Hasso Plattner, and, most interestingly, CFO Mark White, SAP’s designated corporate representative for the trial and the guy tapped by its board to clean up the TomorrowNow mess.

Why didn’t SAP put them on the stand? Perhaps it’s because Werner Brandt and SAP co-Chief Executive Officer Bill McDermott, the only board members to take the stand, fared so poorly there.

Or perhaps it’s simply because of the way the trial has played out. “We’ve said from the start that our focus is on damages, that we are interested in resolution of this dispute and determining a reasonable number for damages, and putting the matter behind us,” an SAP spokesperson told me. “The witnesses we call support that focus. Please keep in mind that there were 73 names on the witness list when it was submitted. Since that list was submitted, the scope of the trial has been narrowed considerably and the length of the trial has been shortened.”

UPDATE: I’m told Kagermann was prepared to testify live, but did not due to time constraints. His video deposition was played instead.

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]]> http://allthingsd.com/20101118/sap-orcl/feed/ 0 Damages Expert to SAP: You Owe Me $14 Million and Oracle Four Times That http://allthingsd.com/20101117/damages-expert-to-sap-you-owe-me-14-million-and-oracle-four-times-that/ http://allthingsd.com/20101117/damages-expert-to-sap-you-owe-me-14-million-and-oracle-four-times-that/#comments Wed, 17 Nov 2010 11:09:36 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=52754 Oracle CEO Larry Ellison says SAP owes it $4 billion in damages for infringing its IP. Paul Meyer, its damages expert, puts that sum at about $1.7 billion.

But SAP damages expert Stephen Clarke argues it shouldn’t be more than $40.6 million.

Which is ironic considering SAP paid Clarke’s firm $14 million in fees to determine how much the company owed Oracle for infringing its IP. That’s more than 25 percent of the sum Clarke ultimately settled on (and $10 million more than the fees Oracle’s expert collected for his testimony).

But, according to Clarke, calculating damages accurately requires a certain detached objectivity and evidently it comes at a price. “There’s no anger or punishment allowed,” Clarke said Tuesday. “What happened as a result of that infringement is what matters. The only way to do that is focus on the actual number of contracts at issue here.”

And that number is just 358, well shy of the “thousands” of contracts SAP hoped to win away from Oracle.

Too bad there’s no dollar value on SAP co-CEO Bill McDermott’s apology to Oracle yesterday.

Oracle’s cross-examination of Clarke is expected to continue into Thursday, after which SAP will likely show a bit of testimonial footage and rest its case. Presumably that will be followed by some rebuttal witnesses from Oracle on Friday and closing arguments sometime the following week.

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]]> http://allthingsd.com/20101117/damages-expert-to-sap-you-owe-me-14-million-and-oracle-four-times-that/feed/ 0 Oracle, SAP and the Apotheker Sideshow http://allthingsd.com/20101116/oracle-sap-tk/ http://allthingsd.com/20101116/oracle-sap-tk/#comments Tue, 16 Nov 2010 11:00:01 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=52700

Why is Oracle so intent on putting former SAP CEO and new HP chief Léo Apotheker on the stand in the trial that will determine damages in Oracle’s long-running IP battle with its German rival?

SAP insists it’s to create a “PR sideshow”–which is true to an extent. But sometimes there’s more to a sideshow than meets the eye. Which is not to say that some nefarious scheme lies at the heart of all this, just that there is a lot of subtext to make sense of in this case. And it’s being written from two very different views of how damages should be calculated and how important Apotheker is as a variable in that calculation.

SAP’s view is that now that it has stipulated to liability, damages should be determined according to the actual number of contracts won by TomorrowNow and their value–not according to the number of contracts it hoped to win.

Oracle’s view is that damages should be determined by value of the intellectual property stolen from it and SAP’s ambitions for it. And while SAP’s stipulation to liability prevents Oracle from introducing evidence on liability, it leaves it free to introduce evidence for “context” on damages.

And that’s where Apotheker comes in.

According to evidence presented in the case, Apotheker chaired the launch of the Safe Passage program, of which the TomorrowNow acquisition was one part. And in his depositions, former SAP board member Shai Agassi clearly identified Apotheker as having some responsibility for TomorrowNow post acquisition, along with Gerd Oswald.

“I was the guy who led the the evaluation [of TomorrowNow] with Werner Brandt, who managed the acquisition teams at the time,” Agassi said. “The day of the acquisition, it was basically moved to Gerd Oswald, and the sales effort was moved over to Apotheker. So Safe Passage was managed by Apotheker and Oswald.”

Add to this the fact that Apotheker reported on TomorrowNow and the Safe Passage program in SAP earnings calls and was the only senior SAP exec quoted in a company release touting the program’s success, and it seems reasonable to expect that he might be able to provide some of the “context” Oracle is looking for (click document below to enlarge). One could argue that his expectations and forecasts for the program’s success speak directly to Oracle’s damages.

Or one could argue, as SAP and HP do, that his involvement was incidental and that he had no responsibility for TomorrowNow’s day-to-day operations and hence no knowledge of its transgressions.

But unless he testifies under oath, we’ll never know who’s right. And with Apotheker quietly going about his business at an undisclosed location, it’s looking like that’s how things will end up.

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]]> http://allthingsd.com/20101116/oracle-sap-tk/feed/ 0 Better Late: SAP Co-CEO Apologizes for Oracle IP Theft http://allthingsd.com/20101115/sap-co-ceo-apologizes-for-oracle-ip-theft/ http://allthingsd.com/20101115/sap-co-ceo-apologizes-for-oracle-ip-theft/#comments Mon, 15 Nov 2010 18:55:46 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=52643 What an uncomfortable moment this must have been for SAP co-Chief Executive Officer Bill McDermott. Under cross-examination by Oracle attorney David Boies in the trial to determine damages for the theft of Oracle IP by SAP subsidiary TomorrowNow, McDermott rolled over and offered up something that we’d not yet seen since this case began: An apology.

“Has SAP ever apologized?” Boies asked. “Would you like to do so now?”

McDermott’s reply, “I am sorry to Oracle.”

As I said, an uncomfortable moment–and evidently one of many. Boies subsequently asked McDermott if SAP had ever disciplined anyone at TomorrowNow for its misdeeds. McDermott said it hadn’t. “We were focused on a resolution with Oracle,” he said. “It’s a matter of priorities.” To which Boies replied, “I don’t mean any disrespect, but what is taking so long?”

To be fair, McDermott did offer some testimony supportive of SAP, noting that TomorrowNow didn’t generate a lot of software sales. “Not only was it not a big driver of software sales, it wasn’t a very successful [concept],” he said.

Maybe that’s why it took so many years for SAP to apologize.

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[Image credit: Someecards]

]]> http://allthingsd.com/20101115/sap-co-ceo-apologizes-for-oracle-ip-theft/feed/ 0 SAP Co-CEO Expected to Testify in Oracle Trial Today http://allthingsd.com/20101115/sap-co-ceo-expected-to-testify-in-oracle-trial-today/ http://allthingsd.com/20101115/sap-co-ceo-expected-to-testify-in-oracle-trial-today/#comments Mon, 15 Nov 2010 11:01:12 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=52572 Oracle may not get former SAP CEO Léo Apotheker on the stand in its trial against its Teutonic archrival, but it will get a shot at its current executive leadership. SAP co-CEO Bill McDermott is expected to testify as a witness for the defense today, if Oracle concludes its case, as the company’s legal team indicated last Friday.

SAP tapped McDermott as co-CEO earlier this year, but he’s been on the company’s executive board since 2008 and was serving as CEO of SAP America when SAP acquired TomorrowNow. Ironically, one of his first acts as co-CEO was to scrap an internal program examining SAP’s corporate values.

“Companies that are too internally focused are sick,” McDermott said at the time. “There’s nothing healthy about being obsessed with your own internal nonsense. If there was a project that built bureaucracy into the company or required people to think about our internal stuff, we’ve killed those projects.”

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]]> http://allthingsd.com/20101115/sap-co-ceo-expected-to-testify-in-oracle-trial-today/feed/ 0 HP to Oracle: Leave Léo Alone! http://allthingsd.com/20101113/hp-to-oracle-leave-leo-alone/ http://allthingsd.com/20101113/hp-to-oracle-leave-leo-alone/#comments Sat, 13 Nov 2010 09:00:45 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=52550 Oracle attorney David Boies’s call for Hewlett-Packard CEO Léo Apotheker to testify in its trial against SAP drew a quick response from HP, which continues to dismiss Oracle’s efforts to put him on the stand as harassment and nothing more.

“As HP has said repeatedly, Oracle had ample opportunity to question Léo in the two years after he gave a full-day deposition,” a spokesperson told me Friday evening. “Léo was never asked to give an additional deposition. As HP and SAP have noted, Oracle chose not to include Léo as a live trial witness until after he was named CEO of HP. Léo had a limited role in the matter and Oracle’s current stance is clear proof that they have been trying to harass Léo and interfere with his work at HP.”

Point meet counterpoint. That said, Oracle likely would have been most interested in deposing Apotherker a second time after SAP’s stipulation to liability for contributory infringement. And that didn’t occur until October 29, 2010.

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]]> http://allthingsd.com/20101113/hp-to-oracle-leave-leo-alone/feed/ 0 Oracle Still Hoping to Snag HP's Apotheker for SAP Trial http://allthingsd.com/20101112/with-no-apotheker-at-sap-trial-oracle-lawyers-may-choose-insinuation-over-deposition/ http://allthingsd.com/20101112/with-no-apotheker-at-sap-trial-oracle-lawyers-may-choose-insinuation-over-deposition/#comments Fri, 12 Nov 2010 23:10:42 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=52498 Hewlett-Packard describes Oracle’s efforts to subpoena CEO Léo Apotheker to testify in its trial against archrival SAP as “an effort to harass” him and “interfere with his duties and responsibilities.” But to Oracle, Apotheker is a central player and one it desperately wants to put on the stand. So much so, that Oracle attorney David Boies said today it may rest its case without showing Apotheker’s videotaped deposition in order to give itself more time to subpoena him to testify in person at the trial.

In a statement this afternoon, Boies reiterated the importance to Oracle of getting Apotheker in front of the jury, an effort thwarted so far because he has stayed out of range of a subpoena.

“[Former SAP director] Shai Agassi identified Leo Apotheker as being responsible for Safe Passage, with TomorrowNow as its cornerstone,” Boies said. “Werner Brandt [SAP director and CFO] did the same and testified that Mr. Apotheker was a member of the SAP AG Executive Board that fully supported the acquisition of TomorrowNow. He is clearly a very important witness in this case, especially now.

“When he testified at his deposition more than two years ago, it was before SAP and its wholly owned subsidiary TomorrowNow admitted infringing Oracle’s intellectual property through massive downloading and copying of PeopleSoft, JD Edwards and Siebel software. We think it is very important that Mr. Apotheker testify now, as a live witness in court, to explain his and SAP’s conduct.”

And if Apotheker still can’t be found? What then?

“Maybe we’ll just let the jury know that they’ve hidden him,” Boies said earlier. “I think it may be better for the jury to know that, here’s this guy who was at the center of all this [and we can't find him].”

In other words, jurors’ imaginations might be more powerful than the actual contents of Apotheker’s now very dated deposition. Better to tell them that the exec has been sequestered, and allow them to conclude that his testimony must be very damaging.

Of course, the flip side of this is that Apotheker and his deposition are inconsequential to the case and Oracle’s main goal in pursuing him has been to create a media circus around him to embarrass HP–which is what HP and SAP have been saying all along. And indeed, SAP repeated it again today in response to Boies’s comments. Said a spokesman, “Oracle’s heightened interest in Mr. Apotheker as a live witness came only after his appointment as HP’s CEO, a PR sideshow that has little to do with the real issues of this case–the actual damages from the limited operations of TomorrowNow.”

UPDATE: Reached for comment on Boies’ statement, HP maintained that Oracle’s efforts to put Apotheker on the stand are harassment and nothing more.

“As HP has said repeatedly, Oracle had ample opportunity to question Léo in the two years after he gave a full-day deposition,” a spokesperson told me. “Léo was never asked to give an additional deposition. As HP and SAP have noted, Oracle chose not to include Léo as a live trial witness until after he was named CEO of HP. Léo had a limited role in the matter and Oracle’s current stance is clear proof that they have been trying to harass Léo and interfere with his work at HP.”

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]]> http://allthingsd.com/20101112/with-no-apotheker-at-sap-trial-oracle-lawyers-may-choose-insinuation-over-deposition/feed/ 0 HP CEO to Oracle: Here's Looking at You, Kid–Suntory Time! http://allthingsd.com/20101110/hp-ceo-to-oracle-heres-looking-at-you-kid-suntory-time/ http://allthingsd.com/20101110/hp-ceo-to-oracle-heres-looking-at-you-kid-suntory-time/#comments Wed, 10 Nov 2010 20:37:11 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=52306 The process servers Oracle’s hired to track down former SAP Chief Léo Apotheker can take a few days off. Apotheker, who’s just begun his new gig as CEO of Hewlett-Packard, is far beyond their 100-mile reach.

He’s in Japan. Or at least he was a few days ago, when he gave an interview to Nikkei BP while in Tokyo. Of course that doesn’t mean he’s still there now–unless he’s shooting whisky ads on the side or has struck up an unlikely friendship with a neglected newlywed.

HP continues to refuse to divulge his location and, to be fair, that’s company policy and were you to put the same question to Oracle about one of its execs you’d likely get a similar answer. Said an HP spokesperson, “We don’t discuss the schedules or specific whereabouts of our executives.”

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]]> http://allthingsd.com/20101110/hp-ceo-to-oracle-heres-looking-at-you-kid-suntory-time/feed/ 0 Ellison to Self: Damn, Damn. I Knew I Should Have Said $4.5 Billion http://allthingsd.com/20101110/ellison-to-self-damn-damn-i-knew-i-should-have-said-4-5-billion/ http://allthingsd.com/20101110/ellison-to-self-damn-damn-i-knew-i-should-have-said-4-5-billion/#comments Wed, 10 Nov 2010 19:25:01 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=52292 Whatever damages Oracle is awarded in its suit against SAP, they’ll be $500 million lighter, thanks to an order by the judge presiding over the case. Judge Phyllis Hamilton has prevented Oracle from including in its damages estimates any potential lost profits from products it might have sold to customers it lost because of the SAP-TomorrowNow debacle.

So when Oracle’s damage expert, Paul Meyer, offered his estimate of what SAP should pay Oracle it ended up being $1.66 billion, which is obviously a substantial sum, but less than the one Oracle has been seeking and significantly less than the $4 billion figure Oracle CEO Larry Ellison was tossing around on Monday.

Good news for SAP–particularly after yesterday–and one that the company hopes is the beginning of a trend. “The ruling of the Court has an immediate and demonstrable impact on Oracle’s damages presentation, reducing the total by $500 million, from $2.2 billion down to $1.6 billion,” an SAP spokesperson told me. “This is the second such reduction by the Court and we are confident that, when the jury hears our case presentation, the outcome of the case will reflect the actual damages the limited actions of TommorowNow had upon Oracle.”

Oracle declined to comment on the matter.

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]]> http://allthingsd.com/20101110/ellison-to-self-damn-damn-i-knew-i-should-have-said-4-5-billion/feed/ 0 SAP Attorney: Board Knew TomorrowNow Was Infringing at Time of Acquisition http://allthingsd.com/20101109/sap-attorney-board-knew-tomorrownow-was-infringing-at-time-of-acquisition/ http://allthingsd.com/20101109/sap-attorney-board-knew-tomorrownow-was-infringing-at-time-of-acquisition/#comments Tue, 09 Nov 2010 20:15:33 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=52194 Proceedings in the Oracle-SAP trial kicked off today with a comment, startling in both its source and content.

While discussing instructions to be given to the jury before it begins deliberations, SAP attorney Greg Lanier remarked that “at time of acquisition, the board was aware of [infringing] software on TomorrowNow’s computers.”

The jury wasn’t present to hear Lanier’s admission, but still it seems a rather bold one to make in open court, considering SAPs’ stance up until today–even when it decided in October not to contest Oracle’s claim for contributory infringement–has been that its executives didn’t know its TomorrowNow unit was illegally pillaging Oracle’s IP.

SAP declined comment on Lanier’s remarks.

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]]> http://allthingsd.com/20101109/sap-attorney-board-knew-tomorrownow-was-infringing-at-time-of-acquisition/feed/ 0 Oracle Co-President on SAP's Damages Offer: "It's Crazy" http://allthingsd.com/20101109/oracle-co-president-on-saps-damages-offer-its-crazy/ http://allthingsd.com/20101109/oracle-co-president-on-saps-damages-offer-its-crazy/#comments Tue, 09 Nov 2010 16:02:38 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=52160 Whatever points SAP managed to score in its high-stakes legal battle with Oracle Monday–by introducing an email from Oracle President Safra Catz suggesting the company had not lost any large customers to its German competitor after it bought TomorrowNow–dropped off the board when Catz finally took the stand herself.

Called as a witness for Oracle, Catz reiterated an earlier point made by Oracle CEO Larry Ellison, saying that had SAP licensed the materials that its TomorrowNow subsidiary ultimately pilfered, it would have cost “billions.” She also reminded SAP’s legal team that her email on SAP/TomorrowNow as a competitive threat was written without knowing about TomorrowNow’s copyright infringement.

Worse, she dismissed SAP’s offer of $40 million in damages as laughable. “SAP paying us damages of $40 million would be a reward for their bad behavior. “It’s like taking someone’s $2,000 watch and hocking it for $20, and then offering to give us $20. It’s crazy. It completely undervalues the entire basis for our industry.”

A powerful jab, and one that’s making the rounds in media reports on the trial today.

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]]> http://allthingsd.com/20101109/oracle-co-president-on-saps-damages-offer-its-crazy/feed/ 0 Oracle Enlists Process Servers, Not PIs, to Find HP CEO http://allthingsd.com/20101109/oracle-enlists-process-servers-not-pis-to-find-hp-ceo/ http://allthingsd.com/20101109/oracle-enlists-process-servers-not-pis-to-find-hp-ceo/#comments Tue, 09 Nov 2010 11:06:48 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=52129 Oracle is still on the hunt for former SAP chief and current HP CEO Léo Apotheker, but it hasn’t enlisted private investigators to track him down.

Sources in a position to know tell me that the PIs rumored to be searching for Apotheker are actually PSs–process servers, agents charged with delivering subpoenas to their intended recipient. And, as federal law dictates, their search extends no farther than 100 miles from the location of the trial, because if Apotheker is outside that 100-mile radius, they can’t serve him. And Oracle can’t compel him to testify. Which means it’s not really worth the company’s time or effort to hire Dog the Bounty Hunter to track him down in some Schwarzwald hideout.

As Oracle attorney David Boies said during a press conference after Monday’s proceedings, “Because of his role, we think it’s important for the jury to be able to see him live. But evidently, the embarrassment of avoiding trial is less than the embarrassment of testifying. We are trying to serve him. Still.”

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