Oracle Corporation et al v. SAP AG et al

Filing 754

Joint Statement Per August 6, 2010 Order by SAP AG, SAP America Inc, Tomorrownow Inc., Oracle International Corporation, Oracle Systems Corporationm, Oracle EMEA Limited, Oracle Corporation, Oracle USA Inc. (Froyd, Jane) (Filed on 8/10/2010) Modified on 8/11/2010 (vlk, COURT STAFF).

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Robert A. Mittelstaedt (SBN 060359) Jason McDonell (SBN 115084) Elaine Wallace (SBN 197882) JONES DAY 555 California Street, 26th Floor San Francisco, CA 94104 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] [e-mail] Tharan Gregory Lanier (SBN 138784) Jane L. Froyd (SBN 220776) JONES DAY 1755 Embarcadero Road Palo Alto, CA 94303 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] Scott W. Cowan (Admitted Pro Hac Vice) Joshua L. Fuchs (Admitted Pro Hac Vice) JONES DAY 717 Texas, Suite 3300 Houston, TX 77002 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] Attorneys for Defendants SAP AG, SAP AMERICA, INC., and TOMORROWNOW, INC.

BINGHAM McCUTCHEN LLP DONN P. PICKETT (SBN 72257) GEOFFREY M. HOWARD (SBN 157468) HOLLY A. HOUSE (SBN 136045) ZACHARY J. ALINDER (SBN 209009) BREE HANN (SBN 215695) Three Embarcadero Center San Francisco, CA 94111-4067 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] [e-mail] BOIES, SCHILLER & FLEXNER LLP DAVID BOIES (Admitted Pro Hac Vice) 333 Main Street Armonk, NY 10504 Telephone: [phone] Facsimile: [phone] [e-mail] STEVEN C. HOLTZMAN (SBN 144177) 1999 Harrison St., Suite 900 Oakland, CA 94612 Telephone: [phone] Facsimile: [phone] [e-mail] DORIAN DALEY (SBN 129049) JENNIFER GLOSS (SBN 154227) 500 Oracle Parkway, M/S 5op7 Redwood City, CA 94070 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] Attorneys for Plaintiffs ORACLE USA, INC., et al.

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION ORACLE USA, INC., et al., Plaintiffs, v. SAP AG, et al., Defendants. Case No. 07-CV-1658 PJH (EDL) JOINT STATEMENT PER AUGUST 6, 2010 ORDER

SVI-83811v1

JOINT STATEMENT PER ORDER Case No. 07-CV-1658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Pursuant to the Court's August 6, 2010 Order, Plaintiffs Oracle USA, Inc., Oracle International Corporation, Oracle EMEA Limited, and Siebel Systems, Inc. ("Plaintiffs") and Defendants SAP AG, SAP America, Inc., and TomorrowNow, Inc. ("Defendants") make the following joint submission. I. Parties' Proposal Regarding the Process to Streamline the Case for Trial The parties agree that the assistance of a Magistrate Judge would help facilitate the parties' discussions regarding streamlining the case for trial, and that these discussions should be further managed by Magistrate Judge Spero, the assigned settlement magistrate. The next settlement conference is scheduled for September 7, 2010. The parties will work with Magistrate Judge Spero before then to expedite progress toward streamlining the case for trial. II. Effect of Defendants' Proposed Concessions on Pending Motions for Partial Summary Judgment Thirteen issues were presented in the parties' pending motions for partial summary judgment and Defendants' cross-motion, as set forth in Exhibit A, the list of issues presented without objection to the Court at the May 5 argument on summary judgment. The parties have met and conferred regarding the status of those issues. As described below, the parties agree that Plaintiffs are entitled to summary judgment on Issues Nos. 1, 2, 4 and 6 of their motion by reason of Defendants' election not to contest, and further agree that Issues Nos. 3 and 7 of Plaintiffs' motion and Issues Nos. 1, 2 and 4 of Defendants' motion are ripe for decision. The parties disagree whether the remaining issues, Issue No. 5 of Plaintiffs' motion, Issues Nos. 3, 5 and 6 of Defendants' motion/cross-motion would be or have been mooted by the concessions proposed in Defendants' Trial Brief and related public statements. A. Issues Which Have Been Resolved by Defendants' Elections Not to Contest

The Parties agree that by reason of Defendants' election not to contest as set forth in their opposition papers and at argument on summary judgment, summary judgment may be granted in favor of Plaintiffs on Issues Nos. 1, 2, 4 and 6 of Plaintiffs' motion, specifically:

SVI-83811v1

-1-

JOINT STATEMENT PER ORDER Case No. 07-CV-1658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
SVI-83811v1

·

Direct copyright infringement of six registrations by TomorrowNow, Inc. (the three PeopleSoft registrations for the period beginning March 1, 2005 and the three Oracle Database registrations with no time limitation);

·

Vicarious copyright infringement of the same six registrations over the same time periods by SAP AG and SAP America, Inc.;

·

Direct liability of TomorrowNow, Inc. for violations of Computer Fraud and Abuse Act, 18 U.S.C. § 1030(a)(2)(C); and

·

Direct liability of TomorrowNow for violations of California Data Access and Fraud Act, Cal. Penal Code § 502(c)(7).

B.

Issues Which Remain Open for Resolution on Summary Judgment

The Parties agree that Issues Nos. 3 and 7 of Plaintiffs' motion and Issues Nos. 1, 2 and 4 of Defendants' motion remain and are ripe for decision, even in light of Defendants' proposed concessions and related statements, specifically: Plaintiffs' Motion for Partial Summary Judgment · Contributory copyright infringement of six registrations by SAP AG and SAP America, Inc.; and · Indirect liability of SAP AG and SAP America, Inc. for TomorrowNow's uncontested Computer Fraud and Abuse Act and California Data Access and Fraud Act violations. Defendants' Motion for Partial Summary Judgment · · Unavailability of "saved development costs" as a measure of damages in this case; Unavailability of lost profits of related, non-party entities in this case, and whether SAP's proposed order seeking a ruling that Oracle cannot seek any damages of non-parties is overbroad; and · Limitation of damages under the California Data Access and Fraud Act, Cal. Penal Code § 502, to no more than Plaintiffs' alleged "investigation costs."

-2-

JOINT STATEMENT PER ORDER Case No. 07-CV-1658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

C.

Issues As to Which the Parties Disagree Whether They Are Open for Resolution

The parties do not agree on the impact of Defendants' Trial Brief and other statements on the other issues raised in the pending motions (Issue No. 5 of Plaintiffs motion, Issues Nos. 3 and 5 and Issue No. 6 of Defendants' cross-motion), specifically: · Direct liability of TN for violations of Computer Fraud and Abuse Act, 18 U.S.C. § 1030(a)(5)(A)(i)-(iii); · Unavailability of damages for Plaintiffs' claims of trespass to chattels and violations of the California Data Access and Fraud Act, Cal. Penal Code § 502; · · Dismissal of Oracle EMEA, Ltd.'s claims; and Dismissal of pre-March 1, 2005 claims for copyright infringement for all PeopleSoft and J.D. Edwards registrations at issue in this case based on a lack of standing. The parties' positions are set forth below. 1. Statement of Defendants

Neither Defendants' Trial Brief nor SAP's statement affects or moots any issues pending on summary judgment. Defendants' Trial Brief proposed some potentially significant concessions with the goal of focusing this case for trial. As set forth specifically in the Trial Brief, see p. 2, Defendants proposed to concede TomorrowNow's liability, as well as SAP's vicarious liability for copyright infringement, but in so doing they expressly preserved the defenses asserted on summary judgment. Defendants believe that the combination of rulings on the pending motions and focusing the issues as proposed in their Trial Brief would make it possible to try this case to a fair result on a much shorter schedule. By making that proposal, they did not render moot the work done on summary judgment, but expressly kept open those issues ripe for decision because those rulings might further narrow the case. (The elections not to contest made on summary judgment and addressed in section II.A, above, were made months ago, before argument on summary judgment; they are neither the product of nor affected by pretrial filings.)
SVI-83811v1

-3-

JOINT STATEMENT PER ORDER Case No. 07-CV-1658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Plaintiffs seek to bind Defendants to additional alleged "concessions," pointing to a statement made by SAP and to press reports. Plaintiffs miss the basic point--SAP's statement said that Defendants "proposed" to stipulate to TomorrowNow's liability, as explained in their pretrial filings. There was no ambiguity or contradiction; Defendants announced what they proposed to do and directed those interested to their pretrial filings for details. Plaintiffs express confusion over SAP's statement about taking financial responsibility for any judgment against TomorrowNow, claiming that this also moots some issues pending on summary judgment. Not so. Proposing to accept financial responsibility for a judgment against TomorrowNow should moot the claims against SAP (as proposed in the Trial Brief), not the defenses to such liability, which Defendants specifically preserved in the event that Plaintiffs would not agree to focus the issues for trial. Plaintiffs would apparently rather fight for any ruling against SAP than have assurance of payment of any judgment against TomorrowNow they may obtain. Making the proposal was itself a significant step because effecting the proposal to shorten the trial and narrow the claims at issue would require Defendants to forego a variety of significant defenses (as explained in their Trial Brief). But recognizing publicly that Defendants had made that significant proposal does not change the proposal to a "done deal," nor does it mean that a proposal which specifically preserves defenses presented on summary judgment now suddenly waives them. Nor too does the hope expressed in the press that this case can be brought to resolution mean that Defendants' proposal gave up what they expressly preserved. Defendants proposed to stipulate to TomorrowNow's liability, as well as SAP's vicarious liability for copyright infringement, nothing more and nothing less, expressly preserving a variety of defenses. None of the issues presented for decision on summary judgment are mooted by that proposed concession. Defendants respectfully submit that the pending motions for summary judgment are ready for and require disposition, beyond those four specific issues as to which Defendants confirmed months ago they were not contesting as to the facts presented by Plaintiffs on their motion. Defendants remain ready, willing and able to act on their proposal set forth in the Trial Brief, and hope Plaintiffs will join them in focusing trial on what is truly in dispute.
SVI-83811v1

-4-

JOINT STATEMENT PER ORDER Case No. 07-CV-1658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Defendants have addressed the length and structure of trial in detail in their Trial Brief and relevant sections of the Joint Pretrial Statement and do not repeat those points here. 2. Statement of Plaintiffs

Oracle believes that SAP's public statements and concessions on August 5, 2010 warrant the entry of summary judgment for Plaintiffs in certain additional respects as described below. SAP has made a series of seemingly contradictory statements about what liability it will and will not contest in this case, and continues to contradict itself in the statement above. In its August 5, 2010 press release, SAP expanded on the concessions it made on summary judgment and indicated it would not contest any liability for TomorrowNow. Specifically, SAP stated that it "proposed that it would not contest the liability of TomorrowNow for copyright infringement and downloading conduct alleged in Oracle's complaint." SAP's CFO, Werner Brandt, further stated: "By accepting responsibility for TomorrowNow's actions, SAP is taking a decisive move to focus the issues in this case." (emphasis added) Neither SAP nor Mr. Brandt stated in any way that SAP's "acceptance of responsibility" was qualified or conditional in any respect. (By contrast, SAP carefully did reserve the issue of damages as an issue on which SAP would "continue to present arguments and evidence," thereby both indicating that it knew full well how to qualify its statements to the public and implying by omission that it was not doing so with regard to SAP TN direct liability or SAP vicarious liability.) These statements were widely reported in the press, including by the Wall Street Journal, the Associated Press, Barron's and Reuters, among other major news outlets. Because they are neither conditional nor qualified, the effect of these statements is that the Court should: 1. Grant Oracle's motion with regard to TomorrowNow's direct infringement prior to March 1, 2005 of the three PeopleSoft registrations at issue in Oracle's motion. 2. Grant Oracle's motion with regard to the additional violations of the CFAA and CDAFA raised in Oracle's motion, as to which SAP previously opposed on the elements of intent and damage. 3. Deny Defendants' motion with regard to Plaintiff OMEA's claims against TomorrowNow.
SVI-83811v1

-5-

JOINT STATEMENT PER ORDER Case No. 07-CV-1658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

In its statement above, SAP seeks to continue to limit or preserve its ability to resist SAP TN liability by "expressly preserving a variety of defenses." In the absence of these defenses, there is no ground on which SAP can resist entry of summary judgment for Oracle on the three points we set forth above. Neither SAP's press release (nor a new offer made by SAP to Oracle earlier today) would reserve any defenses to SAP TN's liability. SAP insists that its public statements were a mere "proposal." But nothing about Mr. Brandt's statement to the press, as included in the press release, states that in "accepting responsibility for TomorrowNow's actions" and being "committed to compensating Oracle for the harm the limited operations of TomorrowNow actually caused," SAP was merely negotiating. Either SAP accepts responsibility, as Mr. Brandt suggested, or it does not. Oracle accordingly contends that the Court should hold SAP to its public statements and enter summary judgment for Plaintiffs in the two additional respects (#1-2), and deny Defendants' motion for summary judgment in the one additional respect (#3), identified above. Oracle remains committed to negotiating in good faith ­ and not in the press ­ in order to streamline this case for trial. It has made several proposals of its own, as explained in the PreTrial Statement, which SAP has rejected. As a result, it welcomes SAP's offer to concede SAP TN's direct liability on each of Oracle's claims and SAP AG's and SAP America's vicarious liability (whether limited to Oracle's copyright infringement claims or not). These offers alone can and will streamline trial, and thereby reduce it from approximately twelve weeks (which Oracle estimates a non-streamlined trial would require based on the pre-trial submissions) to less than the six weeks the Court has set aside, with the key issues (among others) of SAP's involvement in the infringing activities and damages remaining for trial. Unfortunately, SAP has been inconsistent as to whether it insists on unacceptable strings to these offers (there are none in the press version). Oracle looks forward to continuing to discuss how best to streamline trial, though it also believes the parties are already there if SAP's public statements are taken at face value.

SVI-83811v1

-6-

JOINT STATEMENT PER ORDER Case No. 07-CV-1658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

DATED: August 10, 2010

JONES DAY

By: /s/ Tharan Gregory Lanier Tharan Gregory Lanier Attorneys for Defendants SAP AG, SAP AMERICA, INC., and TOMORROWNOW, INC. In accordance with General Order No. 45, Rule X, the above signatory attests that concurrence in the filing of this document has been obtained from the signatory below. DATED: August 10, 2010 BINGHAM McCUTCHEN LLP

By:

/s/ Geoffrey M. Howard Geoffrey M. Howard

Attorneys for Plaintiffs ORACLE USA, INC., ORACLE INTERNATIONAL CORPORATION, ORACLE EMEA LIMITED, and SIEBEL SYSTEMS, INC.

SVI-83811v1

-7-

JOINT STATEMENT PER ORDER Case No. 07-CV-1658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
SVI-83811v1

EXHIBIT A Issues Presented on Motions for Summary Judgment Plaintiffs' Motion for Partial Summary Judgment 1. Direct Copyright Infringement of Six Registrations by TN 2. Vicarious Copyright Infringement of Six Registrations by SAP AG and SAP America 3. Contributory Copyright Infringement of Six Registrations by SAP AG and SAP America 4. Direct Liability of TN for Violations of CFAA § (a)(2)(C) 5. Direct Liability of TN for Violations of CFAA § (a)(5)(A)(i-iii) 6. Direct Liability of TN for Violations of CDAFA § (c)(7) Defendants' Motion for Partial Summary Judgment 1. Unavailability of "Saved Costs" as a Measure of Damages in this Case 2. Unavailability of Lost Profits of Related Non-Party Entities in this Case

3. Unavailability of Damages for Trespass to Chattels and CDAFA Claims

4. Limitation of Damages under the CDAFA, If at All, to No More Than Alleged "Investigation Costs" 5. Dismissal of Oracle EMEA Ltd.'s Claims Defendants' Cross-Motion for Partial Summary Judgment

6. Dismissal of pre-March 1, 2005 Copyright 7. Indirect Liability of SAP AG and SAP Infringement Claims for All PeopleSoft America for CFAA and CDAFA Violations and J.D. Edwards Registrations Based on Lack of Standing (Cross-Moves on Plaintiffs' Issues 1-3)

-1-

JOINT STATEMENT PER ORDER Case No. 07-CV-1658 PJH (EDL)