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Oracle appeals $306 million settlement in SAP-TomorrowNow lawsuit

Mark Fontecchio

Oracle Corp. is appealing a $306 million settlement in its claim against SAP AG that its defunct subsidiary TomorrowNow illegally downloaded Oracle technical documents in order to provide third-party support to Oracle customers.

The appeal comes as no surprise because Oracle was seeking more than $2 billion in damages, a number that was cut down in an initial verdict to $1.3 billion, then sliced down further when a judge called it "grossly excessive." In August, SAP and Oracle agreed to the $306 million, which doesn't include an additional $120 million in court fees that SAP had paid Oracle already.

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Oracle made it clear, however, that it came to the agreement with SAP so it could appeal the case.

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"The conduct that led to this lawsuit and jury award is truly unprecedented," said Geoff Howard, an attorney representing Oracle. "SAP's Web scraper alone resulted in more than 10 million copies of Oracle's downloaded software and support materials running on SAP's servers."

The move is just Oracle's latest shot against third-party support. The company also is in the middle of a lawsuit with Rimini Street, a third-party support provider, over many of the same issues. The founder of Rimini Street, Seth Ravin, also founded TomorrowNow before he sold it to SAP. Oracle derives a lot of its revenue from support costs -- in its most recent fiscal year, 43% of its revenue was from software license updates and product support.

Meanwhile, third-party support is gaining traction. Rimini Street regularly reports new sales records to the media for its third-party support products. Also, in a recent SearchOracle.com survey of readers, 21% said they use third-party support for Oracle software.

In the Oracle-SAP lawsuit, the question was not whether SAP and TomorrowNow illegally downloaded Oracle documents. SAP admitted as much to the copyright infringement. The trial became about how much financial damage SAP had caused Oracle, and the two sides' opinions on that matter differed starkly: SAP claimed $28 million, while Oracle claimed north of $2 billion.

Oracle initially sued TomorrowNow back in 2007, so the case already has gone on for five years. Oracle filed a two-page appeal on Friday/on August 31, stating that it is appealing to the U.S. Court of Appeals for the Ninth Circuit "from the final judgment entered in this action on August 3, 2012, and each and every part thereof."


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