SAP Agrees To Pay Oracle $359 Million To Settle TomorrowNow Suit
November 17, 2014 Alex Woodie
The long-running lawsuit between ERP giants Oracle and SAP is finally over after SAP agreed to pay Oracle about $359 million in exchange for dropping its suit over the TomorrowNow third-party support business.
The amount is significantly less than $1.3 billion award that a federal court jury initially awarded Oracle back in 2010. But it’s a bit more than the $272 million Oracle had on the table in 2011 after a judge for the U.S. District Court for the Northern District of California threw out the $1.3 billion award, calling it “grossly excessive.”
The lawsuit stretches all the way back to March of 2007, when Oracle accused SAP of “corporate theft on a grand scale”. SAP was accused of downloading PeopleSoft and JD Edwards software products and other confidential materials from Oracle’s technical support website and using that information for TomorrowNow’s third-party support business. SAP had acquired TomorrowNow in 2005.
Oracle was originally seeking $3 billion in damages, which it later lowered to about $2 billion. SAP, which almost immediately admitted that it stole data and then shut down TomorrowNow, argued the actual damages were significantly less–on the order of $28 million to $41 million.
For years, the argument has been about how much SAP should pay Oracle. In early 2012, Oracle rejected the $272 million the Federal Court judge had offered and instead and pursued a retrial. However, in September 2012, the software giant shifted course when it entered into a $306 million settlement with SAP and promptly appealed that settlement to the Ninth Circuit Court of Appeals in San Francisco, California. Eventually, the appeals court revised the damages figure upward to $356.7 million.
Last week, the two parties submitted a proposed settlement to the court that has Oracle receiving that $356.7 million in damages, plus $2.5 million in interest. As part of the deal, Oracle gets to keep the $120 million in legal fees that SAP already paid.