Oracle Cashes in $1.3 Billion from SAP for Software Piracy

Bob Styran, IT audit expert
November 25, 2010 /

Downloading thousands of copies of software and reselling them to the customers of Oracle (NASDAQ:ORCL), SAP (NYSE:SAP) admitted committing software piracy on the products of its very rival and has been penalized with $1.3 billion worth of fines.

The penalty has been the largest awarded so far to entities infringing copyrights, Oracle president Safra Catz said.

Catz added that SAP’s software piracy into Oracle’s products and related services has been going on for more than three years. During the trial, most senior executives of SAP were found to have tolerated the company’s illegal activity ever since it started, Catz said.

Frustrated with the court’s judgment, SAP said it would file for a motion for reconsideration.

In a statement, SAP regretted the actions of its subsidiary TomorrowNow, which was purchased in 2005 to provide third-party support for Oracle and other applications. TomorrowNow has also been responsible for downloading the documents of Oracle. In 2008, SAP has decided to “wind down” TomorrowNow after the controversy broke out.

Way back in 2007, Oracle sued SAP for downloading heavily its PeopleSoft and J.D. Edwards product lines from Oracle’s Web sites that permitted customers to download various software programs with copyright.

Oracle noticed the heavy download activity of SAP after a rate of 1,800 items daily had been recorded in four consecutive days, far from SAP’s usual 20 per month pace.

SAP sought to compete tightly with Oracle by downloading the necessary information since it could not possibly downturn the open-source software’s competitiveness in terms of resources, Oracle said. Oracle described SAP’s illegal activity a “short cut to equip itself to support Oracle’s software programs” with half of the costs to be shouldered by Oracle.


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