Bloomberg News

SAP Former Unit ‘Expected’ to Plead Guilty to Oracle Downloads

September 14, 2011

Sept. 14 (Bloomberg) -- SAP AG’s former TomorrowNow software maintenance unit is “expected to plead guilty today” to charges related to unauthorized downloading of Oracle Corp. software, an SAP spokesman said.

At a hearing scheduled for today in federal court in Oakland, California, the company is expected to enter the plea, and an agreement between the closed unit and prosecutors resolving the case will be unsealed, said Jim Dever, a spokesman for Waldorff, Germany-based SAP, the world’s largest maker of business software.

TomorrowNow was charged Sept. 8 with 11 counts of unauthorized computer access and one count of criminal copyright infringement. The company will enter guilty pleas to all 12 counts pursuant to the plea agreement, federal prosecutors said in a court filing. Reuters news agency reported that the company will pay a $20 million fine. Dever declined to comment on the terms of the plea agreement.

TomorrowNow entered a not guilty plea in court today. A change-of-plea hearing is scheduled for later today.

SAP, which shut the Bryan, Texas-based unit in 2008, was sued by Oracle in 2007 over the downloads. SAP didn’t contest that it was liable for infringement by the company, which offered software upgrades and fixes to customers who used products made by companies that were acquired by Oracle.

U.S. District Judge Phyllis Hamilton in Oakland last week threw out a jury’s $1.3 billion damage award to Oracle in its civil lawsuit against SAP. Hamilton called the amount “grossly excessive,” and said Oracle could agree to accept no more than $272 million in damages or retry its case.

The criminal case is U.S. v TomorrowNow, 11-00642, U.S. District Court, Northern District of California (Oakland).

--Editors: Michael Hytha, Andrew Dunn

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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