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SAP Admits Inappropriate Downloads in Oracle Case

SAP's chief executive admitted "inappropriate downloads" of documents from archrival Oracle by SAP's TomorrowNow unit but said on Tuesday SAP itself had not had access to that material.

Henning Kagermann said the German software company was open to all options including a settlement with its U.S. rival but expected no big developments in the intellectual property case before the next U.S. court hearing scheduled for September.

"Even a single inappropriate download is unacceptable from my perspective. We regret very much that this occurred," Kagermann said in a statement responding to Oracle's charges of intellectual property theft.

Firewalls had ensured the disputed data had stayed in TomorrowNow's systems to which SAP did not have access, he said.

Kagermann said SAP had installed a new executive chairman at TomorrowNow, SAP America executive Mark White, to ensure compliance with proper business practices.

SAP shares were down 2.1% at Frankfurt close.

SAP's tone on Tuesday was in contrast to previous declarations that it would "defend itself aggressively" against Oracle. The two companies battle for top place in the market for software that helps large firms automate business practices.

Kagermann told a conference call that SAP had only recently learned of the "inappropriate downloads."

Oracle sued SAP in March, alleging "corporate theft on a grand scale" and stepping up a long-running and sometimes bitter war of words between the two companies.

Allegations of Software Theft

The case centers on TomorrowNow, a company SAP bought in 2005 to help it win Oracle customers. TomorrowNow specializes in support for companies using software made by PeopleSoft, JD Edwards and Siebel -- all of which have been bought by Oracle.

Oracle alleges that TomorrowNow used customers' online access codes to steal copyrighted software. SAP said on Tuesday it had found that most of TomorrowNow's downloads had been legitimate but a few had been inappropriate.

Kagermann said SAP's so-called Safe Passage program to win customers away from Oracle would continue and that he did not expect the case to have any impact on SAP's U.S. business.

Oracle has spent $20 billion buying software rivals over the past three years to challenge SAP, the leader in corporate applications that help automate activities ranging from accounting to human resources and inventory management.

Oracle is expanding into that market as its core database business matures.

The lawsuit was filed in U.S. District Court in San Francisco.

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