SAP Reaches Plea Deal in Oracle Criminal Case

SAP AG agreed to plead guilty to unspecified charges in a criminal case involving unauthorized access to computers maintained by software rival Oracle Corp, according to a court filing.

U.S. Department of Justice prosecutors on Thursday charged SAP's defunct TomorrowNow Inc unit with 11 counts of unauthorized access to an Oracle computer, and one count of criminal copyright infringement, according to a separate filing.

The filing lists TomorrowNow as the sole defendant in the criminal case. No individuals were charged.

Sentencing in the case is scheduled for September 14, court documents show.

We have been working with the DOJ and we have reached an agreement to resolve the matter. With the agreement we now look forward to what we think is a fair and final resolution of the matter, SAP spokesman Jim Dever said by phone.

He declined to give details of the plea agreement.

Eric Goldman, a professor at Santa Clara University School of Law, said it is difficult to understand what will be accomplished by bringing criminal charges against one defunct company.

What can they do to TomorrowNow that the marketplace hasn't already done? Goldman said. DOJ may have felt they had to do something, because this was such a high profile example of putatively criminal behavior that they couldn't ignore it.

A Justice Department representative declined to comment on the case.

The charges are the latest in a long-running legal controversy involving SAP and Oracle. Last year a civil jury awarded Oracle $1.3 billion over accusations that SAP subsidiary TomorrowNow wrongfully downloaded millions of Oracle files.

A judge has since reduced that award to $272 million.

SAP acquired TomorrowNow in 2005 after Oracle took over PeopleSoft. TomorrowNow provided third party maintenance and support services to companies that used software licensed from Oracle.

According to the criminal charges, TomorrowNow employees repeatedly gained access to Oracle's computers in 2006 and 2007 using log-in credentials from other companies.

For instance, on December 13, 2006, TomorrowNow employees obtained updates for Oracle real estate management software by using credentials from Merck & Co.

We are very pleased that the Department of Justice brought criminal charges against SAP for their widespread and systematic theft of Oracle's intellectual property to which SAP has repeatedly confessed, Oracle spokeswoman Deborah Hellinger said.

An Oracle representative may wish to address the court at sentencing next week in an Oakland federal courtroom, prosecutors and TomorrowNow said in a joint court filing.

The criminal case in U.S. District Court, Northern District of California is United States of America v. TomorrowNow Inc., 11-cr-0642.

(Additional reporting by Peter Henderson; Editing by Gary Hill)