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SAP pushes for settlement talks with Oracle

SAP pushes for settlement talks with Oracle

SAP is seeking a settlement in its lawsuit with Oracle, but Oracle says the case is too complex for that.

SAP has asked a U.S. court to order settlement talks in its legal battle with Oracle, arguing that Oracle exaggerated its claims against the German software maker. Oracle said it opposed such talks and accused SAP of trying to "make this case go away."

In court papers Tuesday, SAP picked several holes in Oracle's lawsuit, which was filed in March against SAP and its TomorrowNow subsidiary. The suit charged the companies with posing as Oracle customers and illegally downloading customer support materials from an Oracle Web site.

Oracle's version of what happened is "dramatic but inaccurate," SAP argued in a joint filing submitted ahead of a case management conference scheduled for Sept. 4. It said Oracle ignored several factors in its complaint, including that TomorrowNow was entitled to access the Oracle Web site because it was doing work for Oracle customers, and that none of the material was downloaded by SAP itself.

"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,' as Oracle says in its complaint, but a matter of contract interpretation," SAP wrote.

It asked the court to order the two sides into an "alternative dispute resolution" process, which would seek to settle the case outside the courtroom. It wants the process to begin within a few months, mediated by a magistrate judge, and for discovery -- the process of gathering evidence and interviewing witnesses -- to continue in the meantime.

"As with most cases, prompt resolution of this case is in the best interests of all concerned," SAP said.

Oracle was against the idea, however. It said SAP has given no evidence that it never received the documents downloaded by TomorrowNow. Further, the downloads that Oracle has uncovered may be only the "tip of the iceberg." Settlement talks would be premature until Oracle has determined the extent of SAP's illegal conduct, Oracle said.

SAP has "one obvious goal: to make this case go away without meaningful discovery into what it really did," the company said.

The 22-page filing in U.S. District Court for the Northern District of California presents two sharply opposing views of how the case should proceed. Oracle said the matter is highly complex and requires lengthy discovery, including depositions from dozens of customers. It asked for a trial date in September 2009. SAP says the scope of the case is narrower and interviewing so many customers is unnecessary. It wants a trial date in February 2009 or earlier.

The issues will be discussed at the case management conference Sept. 4, and the court will probably issue an order with its decisions after that, SAP said.

TomorrowNow provides support for customers who bought Oracle's PeopleSoft and J.D. Edwards applications. It is permitted to download software updates, patches and other support materials for its customers from Oracle's Customer Connection Web site, but only when they have current support agreements, and only to use with those customers.

Oracle filed its suit after it discovered "a pattern of massive downloads" from the support site and traced them to PCs at TomorrowNow. On Tuesday it said it had discovered 69 customers whose credentials were used for more than 10,000 unlawful downloads. It said there may be many more since its records cover only a few months.

One of the key issues disputed by the parties is whether SAP had access to the materials downloaded by TomorowNow. "Oracle is entitled to know ... what SAP knew, when SAP knew it, and how much SAP has benefited from its scheme," Oracle said in the case management filing.

SAP has admitted that TomorrowNow made some "inappropriate" downloads. But it denies approving the behavior or that any of the documents were provided to SAP.

On Tuesday Oracle called that assertion "suspect" and said it would disprove it during the discovery phase. "It is suspect because it rests on the promise that SAP followed a policy not to share downloaded material -- the same type of policy that SAP breached when it downloaded the materials in the first place," Oracle said.

Oracle wants to take depositions from at least 50 customers and 30 people at SAP and TomorrowNow, including SAP's executive team. It said it will also need to trawl through computer logs and other records, and needs at least a year and a half for discovery.

SAP says discovery can take place in "several months." Oracle should be able to use TomorrowNow's records of the work done for each customer, SAP said, and "depositions from the customers themselves would be of little, if any, additional benefit to justify the burden on third parties."

The companies have each set up Web pages about the case. SAP's is here,

including a link to the joint filing. Oracle's is here.


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