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SAP Calls Process Before Oracle Trial `Reasonable' (Update3)

By Kenneth Wong and Karen Gullo

Sept. 26 (Bloomberg) -- SAP AG, the software maker accused by Oracle Corp. of stealing program codes, said the schedule set for the trial is ``reasonable'' after a judge said the companies should first try to reach a settlement.

U.S. District Court Judge Martin Jenkins in San Francisco yesterday scheduled a trial for Feb. 9, 2009, six months earlier than Oracle had proposed, and gave both companies until July to gather documents and other evidence. Jenkins also said they should enter mediation early next year.

``The judge has found a reasonable means for a speedy trial,'' SAP's Walldorf, Germany-based spokesman Frank Hartmann said in a phone interview today. ``He also found it reasonable to limit the discovery phase and that is overall sensible.''

SAP and Oracle are the largest competitors in the market for software that helps companies manage operations such as payroll and accounting. Oracle, based in Redwood City, California, sued SAP on March 22, claiming SAP workers at the U.S. TomorrowNow unit hacked into a Web site and stole Oracle's copyrighted software codes and support documents.

SAP, the world's largest maker of business-management software, said July 3 it had made ``inappropriate'' downloads of support documents. Chief Executive Officer Henning Kagermann denied SAP had access to Oracle's intellectual property. SAP said in an Aug. 28 court filing that it wants a ``prompt resolution.''

Witness Interviews

Jenkins limited both sides to 20 witness interviews and allowed each three experts to conduct forensic analysis. Oracle had requested as many as 80 depositions and proposed the trial should take place Sept. 25, 2009. Jenkins scheduled another hearing for Feb. 12, 2008.

Christopher Hockett, Oracle's attorney, told Jenkins yesterday the company needed to gather facts to determine SAP's conduct before entering mediation.

``It's a tale of two different stories,'' the judge said at the hearing. ``I know this is a significant case for everyone.''

Oracle's London-based spokeswoman Gaye Hudson declined to comment in an e-mailed response to a Bloomberg News enquiry.

SAP and Oracle offer software maintenance services for each other's products. In its lawsuit, Oracle said Bryan, Texas-based TomorrowNow used identities of Oracle customers and phony users to gain access to its systems. SAP's employees used customer names such as Merck & Co. and Bear Stearns & Co. to conduct illegal downloads, according to the March 22 lawsuit.

Oracle's lawsuit claims SAP used the stolen codes to offer cheaper products and lure Oracle customers. SAP received requests for records pertaining to 400 customers, Bob Mittelstaedt, SAP's attorney, said at the hearing.

`We Have Records'

``TomorrowNow knows what it did with the information, there's no need to ask the customers,'' Mittelstaedt said. ``We have records on that and people who will testify.''

SAP bought TomorrowNow in 2004 as part of its Safe Passage program to lure customers from Oracle acquisitions including PeopleSoft Inc. and J.D. Edwards & Co. by providing software support. TomorrowNow has annual sales of 15.7 million euros ($22.1 million).

The court will issue an order ``shortly'' detailing limitations on discovery, SAP said in a statement posted on the http://www.tnlawsuit.com Web site set up for the lawsuit. The court also asked the companies to agree on a ``special master'' to assist on discovery issues, SAP said.

SAP rose 4 cents, or 0.1 percent, to close at 41.15 euros in Frankfurt trading. Oracle fell 17 cents to $21.77 at 4 p.m. in Nasdaq stock market trading.

No single provision SAP has made for litigation exceeds 10 million euros, spokesman Hartmann said today, reiterating Chief Financial Officer Werner Brandt's July 19 comment.

The case is Oracle v SAP, 07-1658, U.S. District Court, Northern District of California (San Francisco).

To contact the reporters on this story: Kenneth Wong in Berlin at kwong11@bloomberg.net; Karen Gullo in San Francisco at kgullo@bloomberg.net.

Last Updated: September 26, 2007 16:56 EDT

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