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Oracle, SAP settle third-party maintenance lawsuit, issues remain

Oracle and SAP settled a 2007 copyright infringement lawsuit, agreeing that SAP will pay Oracle a total of $359.2 million. But third-party maintenance law is still far from settled.

After seven years, the copyright infringement legal battle between Oracle and SAP over the latter's now-shuttered...

third-party maintenance subsidiary TomorrowNow is finally over. The two companies agreed to settle the lawsuit filed by Oracle, which accepted $356.7 million in damages and $2.5 million in interest from SAP.

The case between the enterprise software rivals goes back to 2007, when Oracle sued SAP in U.S. District Court in Oakland, Calif., for allegedly infringing on its software copyrights. TomorrowNow, a technical support and maintenance provider that SAP acquired in 2005, was found by a judge to have violated the copyrights by illegally making numerous copies of Oracle's software applications and installing them in its computer systems for use in supporting customers.

In 2010, a jury awarded Oracle $1.3 billion in damages after a trial to set the amount. However, further judicial rulings over the past four years have lowered that amount considerably. Earlier this year, a federal appeals court told Oracle that it could either accept the $356.7 million from SAP or opt for a retrial. Oracle decided to take the money and end the lawsuit.

Both SAP and Oracle representatives made statements saying that they were pleased by the outcome of the case. SAP, which closed TomorrowNow in 2008, said it was glad that the court "ultimately accepted SAP's argument to limit Oracle's excessive damage claims and that Oracle has finally chosen to end this matter."

Oracle's general counsel Dorian Daley said, "We are thrilled about this landmark recovery and extremely gratified that our efforts to protect innovation and our shareholders' interests are duly rewarded."

R "Ray" Wang, principal analyst and founder of Constellation Research Inc., thinks there was more at stake in the Oracle-SAP case than just the money -- but the final ruling offers no resolution on that bigger picture.

Third-party maintenance and the bigger picture

At the center of the lawsuit was the contentious issue of third-party maintenance. While it was clear in this case that TomorrowNow had violated Oracle copyrights in providing technical support to Oracle users, Wang said no precedent was set for other third-party maintenance providers to follow. "The main thing is that it's over," he said. "But customers are left wondering, what are the rules of third-party maintenance and who can help them drive down costs?"

Wang continued that tech-support companies like Spinnaker Support and Rimini Street still need to have defined parameters for what they can and cannot do within copyright law. In fact, Rimini Street itself was sued by Oracle in 2010 for copyright infringement; a federal judge in Las Vegas twice ruled in Oracle's favor in that case this year.

"Hopefully, we'll get better guidelines down the road," Wang said.

Jessica Sirkin is associate site editor of SearchOracle. Email her at jsirkin@techtarget.com and follow us on Twitter: @SearchOracle.

Next Steps

Read more about the court rulings that Rimini Street violated Oracle's intellectual property

Get details on another lawsuit that Oracle is involved in, with the State of Oregon

Check out Oracle's copyright lawsuit history with Google, SAP and Comcast

Dig Deeper on Oracle vs. SAP

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