Oracle Sues SAP: Below the Belt With a 2x4

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Includes: ORCL, SAP

I am just starting to dig into this 42-page complaint by Oracle (NYSE:ORCL) against SAP (NYSE:SAP), filed yesterday in U.S. District Court, Northern California.

My first reaction is "Say it isn't so, Henning!" To the best of my knowledge, SAP had not posted a public relations response as of 6:30 pm (nor would I expect a legal response for some time). This is seriously bad stuff. I come from the era of the minicomputer wars. That sport was bare knuckles but this is hitting below the belt--with a 2x4-- if true.

Not being a lawyer, I guess I am surprised at the tone. After a few pages superficially explaining the alleged crime, the complaint wanders off into something that sounds like a dime novel (e.g., "As SAP reeled, events unfolded at a rapid pace."). But unlike a dime novel, there is not a lot of specifics of what Oracle did to protect its IP other than claim copyrights, etc. (as would be expected I guess from a legal perspective). Like a dime novel, there is some good fictional dialog (by July 2006, SAP "CEO Henning Kaggerman had conceded SAP had lost 2% market share to Oracle."). I must have been on vacation for that one.

If this is true, why not call the cops? I expected to find out that that had occurred. What happened when SAP was confronted with its misdeeds? I do not see anywhere in pages 28-41 (what Oracle wants for "relief?") that that step ever took place.

Finally, I take off my indignation hat and my Law and Order hat and put my IT investment research hat back on. I wonder how widespread this bailout by JDE and PeopleSoft users is. Oracle says the alleged theft occurred not back when the acquisition was pending in 2003/2004 (when theoretically the users being "acquired" were rightly concerned), but a few months ago (when they were all happy as can be with the acquisition). A list of customers on page 24 reads like one of Oracle's quarterly "new customers" press releases. Merck and Honeywell are called out specifically in terms of showing pre-2006/2007 patterns and comparing them with the last few months.

Oh well. That's the fun of following Oracle. Never a dull moment.

Disclosure: Author has no position in any of the above-mentioned securities.

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