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HOT - Oracle sues SAP for Criminal Acts

According to this court complaint, Oracle is accusing SAP of a number of criminal acts, including theft, receipt of stolen property and violations of the Federal and California Computer Fraud and Abuse Act. 

We also see lesser civil claims of Unfair Competition, Intentional and Negligent Interference with Prospective Economic Advantage and Civil Conspiracy. 

Worst of all, Oracle claims that they have been permanently damaged: "Oracle has also suffered irreparable injury from these acts", a risky admission that might backfire in the high tech market.

A case of global magnitude

This will be the biggest landmark case of the 21st century because it crosses global jurisdictions.  Of course, deceptive business practices laws are quite different in Germany, and their own laws are quite foreign to people in the USA.,  For example,  a German was extradited to foreign prison for web site content, sentenced to five years in prison for "inciting racial hatred". 

Given the worldwide nature of these global giants and the vastly different laws, Oracle's first challenge will be securing jurisdiction, and we can bet that SAP will put-up a strong defense that the "most appropriate" jurisdiction will be the one whose laws condone their acts.

If proven true, these acts will be a disgrace to SAP and will surely tarnish their reputation in the IT marketplace, a community that cherishes above-board competition and severely punishes cheaters.

Details on the charges

I'm not a lawyer, but I've read many such complaints in my work with Oracle Forensics, and this complaint is not very sophisticated, as-if it was meant to be interpreted by non-lawyers.  The thrust of the lawsuit states:

"Oracle brings this lawsuit after discovering that SAP is engaged in systematic, illegal access to – and taking from – Oracle’s computerized customer support systems.

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 unauthorized 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."

Inside Oracle's laundry list of offenses, we see this criminal charge, direct from the California penal codes.

Computer Data Access and Fraud Act

"knowingly and fraudulently, and without permission, accessing, taking, copying, and making use of programs, data, and files from Oracle’s computers, computer system, and/or computer network".

Violation of Federal Computer Fraud and Abuse Act

"- intentionally accessing a computer used for interstate commerce or
communication, without authorization or by exceeding authorized access to such a computer."

"- knowingly, and with intent to defraud Oracle, accessing a protected computer, without authorization or by exceeding authorized access to such a computer, and by means of such conduct furthered the intended fraud and obtained one or more things of value."

Copyright Infringement

Oracle also charges SAP with copyright infringement under 17 U.S.C. § 501

"[In] January 2007, a user on an SAP TN computer signed in as Oracle customer Honeywell International, Inc., a Fortune 100 technology and manufacturing company, to access Oracle’s support system and copy literally thousands of Oracle’s Software and Support Materials in virtually every product library in every line of business."

Interference with prospective economic advantage

Tortuous Interference cases are sometimes tied to Civil conspiracy laws because Federal Statutes have strong prohibitions against any groups who conspire to injure the reputation of an individual or business.  The complaint charges:

"SAP has been engaged in a systematic program of unfair, unlawful, and deceptive business practices that continues to this day.

Through its illegitimate and illegal business practices, SAP has taken Oracle’s Software and Support Materials and apparently used them to insinuate itself into Oracle’s customer base, and to attempt to convert these customers to SAP software applications."

The complaint continues with a damning allegation, an almost textbook example of tortuous interference:

"Beginning in January 2005, SAP sales representatives unleashed a torrent of marketing materials designed to exacerbate and leverage perceived, albeit unfounded, PeopleSoft and JDE customer uncertainty about the prospects for long-term, quality support from Oracle."

Interference with prospective economic advantage is a crime commonly-referred-to as "tortuous interference", a crime where a business competitor intentionally trashes their competition.  I've seen this happen with competing book authors where one jealous author attacks the reputation of another author with exaggeration and lies.

In the United States, tortuous interference claims are made when someone publishes statements designed to interfere with another normal course of business.

The elements of the tort of interference are:

(1) a valid contract between plaintiff and a third person that confers upon plaintiff a contractual right against a third person;

(2) the defendant knows of the contract;

(3) the defendant intentionally induces the third person not to perform the contract;

(4) the defendant acts without justification; and

(5) the defendant's conduct causes actual pecuniary harm to plaintiff.

To prevail in a Tortuous Interference claim Oracle must prove that a SAP knew about the business relationship, interfered with their relationship, and that SAP was unjustified in doing so. It can even include innuendo, like this:

  • "I cannot believe that people actually pays Waldo's Widgets money"
  • "I feel sorry for anyone unfortunate enough to use Waldo's Widgets services"
  • "Waldo's Widgets products are shoddy and poorly made"
  • "I wonder if their clients know what serial offenders Waldo's Widgets are?"
  • "Amy Author's article is wrong, it's a fact, not my opinion"
  • "The owner of Waldo's Widgets is a fraud"


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