SAP to Contest $1.3 Billion TomorrowNow Award to Oracle

February 7, 2011 Timothy Prickett Morgan

It looks like German software giant SAP is not quite ready to hand over the $1.3 billion in damages that a California jury awarded rival Oracle in the TomorrowNow lawsuit.

On February 3, SAP filed a motion with the court contesting the amount of the damages awarded to Oracle, which was the same day that the court entered the judgment awarded by the jury last November 23.

“Today the Court entered judgment in the Oracle v. SAP/TomorrowNow litigation, which is a procedural matter that occurs after a jury verdict,” SAP explained in a statement. “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.”

Back in March 2007, Oracle accused TomorrowNow, which provided third-party tech support for its PeopleSoft, JDE, and Siebel application software, of stealing the code and documents to do that support. SAP said in the trial last fall that the TomorrowNow unit, which it shut down years ago, had 358 customers and that the damages to Oracle, based on the revenues that TomorrowNow generated, was somewhere between $28 million and $41 million. Oracle’s lawyers argued that the damages were from $288 million to $2 billion, depending on different factors including willfulness. As the trial was getting started, SAP agreed to pay $120 million in lawyers cost, in November the jury awarded $1.3 billion in damages, and in December Oracle filed a motion with the court stipulating that SAP also owed $211 million in interest payments on the award funds for the time value of money. The judge awarded the interest as well, but said that SAP’s way of calculating the interest, at $16.5 million, was the correct way of doing it.

Maybe now SAP is hoping that the court will look at its own way of calculating damages to try to reduce the penalties that SAP has to pay to Oracle. And if not, it looks like some lawyers are going to make even more money.

Rimini Street, which also provides third-party support for Oracle application software and which was bragging a few weeks ago that revenues were up 37 percent in its fourth quarter, to $7 million, and that it had a revenue backlog of services contracts of $220 million, is probably watching the SAP-Oracle case with some fascination. And that is because Oracle and Rimini Street have sued each other, with the former accusing Rimini Street of stealing its assets and the latter accusing Oracle of anti-competitive practices while denying any theft.

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