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Oracle hits SAP with accusations of corporate espionage

The competitive war between Oracle and SAP hots up as the former accuses the latter of allegedly hacking into its systems and stealing information.

Oracle has hit rival SAP with a US lawsuit accusing it of allegedly stealing company secrets from its computer systems.

Yesterday, the enterprise software giant filed the lawsuit in the US Federal District Court in the Northern District of California citing charges of "corporate theft on a grand scale" against SAP and its TomorrowNow support subsidiary.

In the legal document, Oracle states: "Through this scheme, SAP has stolen thousands of proprietary, copyrighted software products and other confidential materials that Oracle developed to service its own support customers. SAP gained repeated and unauthorised access, in many cases by use of pretextual customer log-in credentials, to Oracle's proprietary, password-protected customer support website.

"From that website, SAP has copied and swept thousands of Oracle software products and other proprietary and confidential materials onto its own servers. As a result, SAP has compiled an illegal library of Oracle's copyrighted software code and other materials. This storehouse of stolen Oracle intellectual property enables SAP to offer cut rate support services to customers who use Oracle software, and to attempt to lure them to SAP's applications software platform and away from Oracle's. Through this Complaint, Oracle seeks to stop SAP's illegal intrusions and theft, to prevent SAP from using the materials it has illegally acquired to compete with Oracle, and to recover damages and attorneys' fees."

Oracle says it discovered the alleged breach back in November last year. Its suspicions were raised due to unusually heavy download activity on its password-protected customer support website for its PeopleSoft and J.D. Edwards product lines.

SAP's corner remained fairly muted following news of the allegations and associated legal action.

"We have just been notified of the lawsuit, and have taken note of the Oracle press release," said a statement issued by the company.

"We are still reviewing the matter, and, until we have a chance to study the allegations, SAP will follow is standard policy of not commenting on pending litigation."

The legal wrangling mirrors previous examples of corporate espionage suggestions involving the alleged dirty tricks libel case between British Airways and Virgin Atlantic in the early 1990's.

This lawsuit marks a new chapter in the competitive war between Oracle and SAP, according to David Mitchell, a software practice leader at analyst Ovum.

"Most legal cases in software have focused on product-related IP. This case is different, in that it focuses on the IP around a support and service offering. It is interesting on two fronts," he said.

"First, because support services are one of the highest margin parts of a software business, and companies will act to protect profitable businesses. Secondly, an increasing amount of work is going on across the entire industry to "productise" people-based services, in a bid to make these services more repeatable, better quality for customers and at lower cost. However, this is a harder area to protect since there can often be a fine line been implicit know-how and explicit IP."

The case could either fizzle out quickly or drag on for a while, the latter of which would prove very distracting to the industry and create even greater uncertainty for customers who may already be concerned as to how the lawsuit affects them, claims Mitchell.

"One group of people that must not be forgotten in this turmoil is the customers of both SAP and Oracle," he said.

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