CRM Gone Wild

TomorrowNow Legal Complaint Elevated From Copying to Conspiracy

October 14, 2008.

Since Oracle filed its original 44-page lawsuit against SAP alleging that the SAP’s subsidiary engaged in a massive effort to steal intellectual property from Oracle’s Customer Connection web site, the company has raised the stakes considerably. The suit involves TomorrowNow, a Texas-based SAP subsidiary and third-party provider of technical support for users of Oracle’s PeopleSoft applications. So as to not leave a media opportunity untouched, Oracle upped the ante with new filings that accuse the German giant of “ engage in and cover-up corporate theft of Oracle intellectual property on the grandest scale.” Oracle alleges that SAP executives, including Chief Executive Officer Henning Kagermann, were cognizant—prior to SAP’s 2005 acquisition of TomorrowNow—of the Texas firm’s illegal access to files and electronic documents belonging to Oracle. Oracle states that SAP was warned in a pre-acquisition presentation given by TomorrowNow executives that apparently “made clear that TomorrowNow did not operate legally,” and, in fact, posed “likely legal action” from Oracle.

IP theft

Oracle’s amended complaint suggests at least two reasons that SAP went ahead with the acquisition. First, SAP did not want to lose the highly profitable software maintenance revenue generated by TomorrowNow’s clients (which were also Oracle's clients). Second, SAP “wrongly predicted” that Oracle would forego legal action under the assumption that Oracle would have to sue its own (PeopleSoft) customers as well.

After initially denying allegations, In September 2007, SAP publicly declared that inappropriate downloads occurred, however, were restricted to TomorrowNow employees and that no information crossed over to SAP Americas or SAP AG. SAP later announced on July 21 it plans to shut down TomorrowNow by October 31, 2008.

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