What You Should Not Do To Your Competitor (after SAP tried it and got caught).

I have been reading the pleadings in the Oracle vs. SAP case (you know the 2010 $1.3 Billion judgment case), and trying to come up with a few takeaways for every growing SAAS or software company (i.e. what you can learn from this case and how to use a software EULA). I think I have come up with the list, but before we get started here is the background (the ‘really’ short version).

Background: TomorrowNow was a third-party support company which SAP bought in 2005. TN claimed to provide support for certain Oracle products (for less than 50% of what Oracle charged), and SAP tried to use their business model to lure customers away from the Oracle products and to the SAP products (it was called the ‘Safe Passage‘ program . . . which (funny enough) wasn’t safe/legal after all).

3 Takeaways: Here are the 3 things you should not do to your competitor, now that this case has been decided (all based on the last Oracle filed petition in the case).

1) Don’t Download More of Their Software Than You Have License Rights To. Oracle alleged with great specificity and detail how SAP downloaded more software through its TN subsidiary than it had license rights to.  This may seem very basic, but you don’t want to be in possession of more of your competitor’s software than you are validly licensed for.

2) Don’t Ignore Their Terms of Use on Their Support Site. Before logging into the Oracle customer support site, the TN employees had to agree to the Oracle ‘Terms of Use’ (i.e. a contract). This contract prohibited things like downloading more software that you have rights to, and using Oracle software for the benefit of third parties. It appears that TN ignored and disregarded this contract  (i.e. clear warnings/instructions from Oracle).

3) Don’t Assume Your Actions are Anonymous. Oracle tracked all the TN downloads, and was able to show that before certain customers moved their support to TN they downloaded lots of software from the Oracle customer support site (much, much more than the Oracle customer was licensed for).  This made it really easy for Oracle to prove that what SAP did was wrong and in violation of their copyrights.

BTW: The opposite is true too, so to help prevent competitors from taking your stuff:

(a) make sure your license grant and restrictions are super clear (so your competitors know what they can and cannot do with your software);

(b) have ‘Terms of Use’ on your support site; and

(c) track your customer’s downloads of your software under support.

If you do this and you think a competitor is violating your license rights, then you may have a good case to go after them for big $ (like Oracle did).

So long story short, you should not use a person’s property without permission (something you probably learned in kindergarten) . . . especially when they are your competitor (something you probably learned once you entered the business world). Also remember that if you do the consequences can be quite grave, as this is the largest software copyright judgment ever.

Here is the 4th Amended Complaint, if you want to read the details.

Legal Disclaimer: This does not constitute legal advice, as it is for educational and informational purposes only.