Oracle Corporation et al v. SAP AG et al

Filing 819

Declaration of Tharan Gregory Lanier in Support of 818 Reply in Support of Defendants' Motion for Partial Summary Judgment (FILED PURSUANT TO D.I. 810) filed by SAP AG, SAP America Inc, Tomorrownow Inc. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17, # 18 Exhibit 18, # 19 Exhibit 19, # 20 Exhibit 20, # 21 Exhibit 21, # 22 Exhibit 22, # 23 Exhibit 23, # 24 Exhibit 24, # 25 Exhibit 25, # 26 Exhibit 26, # 27 Exhibit 27, # 28 Exhibit 28, # 29 Exhibit 29, # 30 Exhibit 30, # 31 Exhibit 31, # 32 Exhibit 32, # 33 Exhibit 33, # 34 Exhibit 34)(Related document(s) 810 ) (Froyd, Jane) (Filed on 8/27/2010) Modified on 8/30/2010 (vlk, COURT STAFF).

Oracle Corporation et al v. SAP AG et al

Doc. 819 Att. 5

EXHIBIT 5

Dockets.Justia.com

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II.

Scope of Opinions/Summary of Damages 20. I understand that much of the software technology accessed, downloaded, copied, distributed, modified and/or used by SAP is protected by Oracle copyright registrations. I understand that SAP had direct access to Oracle products protected by intellectual property rights. I have determined damages and offer opinions on the fair market value of SAP's actual use of Oracle's intellectual property (copyrighted materials), Oracle's lost profits related to support contracts, SAP's infringer profits/unjust enrichment and Oracle's additional costs caused by SAP's alleged actions. I understand, as allowed by the Court, I may also be asked to compute or provide opinions related to prejudgment interest, attorney's fees and costs and punitive damages. Supporting analyses are described and provided throughout this Report. Table 1 presents a summary of my damages opinions.

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Table 1: Summary of Damages15 Fair Market Value of SAP's Infringement of Oracle's Copyrights 1. PeopleSoft/J.D. Edwards Fair Market Value16 2. Oracle Database Fair Market Value17 3. Siebel Fair Market Value18 4. Oracle's Lost Profits ­ During TomorrowNow Service Period 5. Oracle's Lost Profits ­ Through May 2015 6. SAP's Unjust Enrichment/Avoided Costs 7. SAP's Unjust Enrichment/Database License 8. Additional Oracle Costs: Investigation Costs19 Damages To Oracle's Data/Systems
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No less than $2.0 billion $55.6 million No less than $100 million $99.6 million

$349.0 million $1.1 to 3.5 billion $55.6 million $0.3 million Not quantified

Table 1 reflects the values for elements of damages which I have been asked to quantify to date. I have not included in the table my assessment for infringers profits which is presented in Section X. I may also be asked to provide opinions and/or quantify prejudgment interest, Oracle's attorney's fees and costs, and punitive damages. Elements in Table 1 represent different remedies for Oracle's allegations and certain elements may not be additive.
15 16 17 18 19

See Sections VI.A.D. and Table 8. See Section VII and components described in Tables 9, 10 and 10A. See Section VIII and Table 12. SCHEDULE 43.SU.

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7. SAP Expanded TomorrowNow Worldwide 71. Backed by SAP's funding, Defendants expanded TomorrowNow's service capabilities across the globe. A February 23, 2005 presentation to the SAP

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Board indicates the expansion of TomorrowNow in Europe and Asia was "to be finalized by earlyMarch."195 Henning Kagermann, SAP Executive Board Member and CoCEO, testified to SAP's immediate plan to expand TomorrowNow services into Europe and Asia.196 In addition, electronic data produced by SAP showing TomorrowNow accounts receivable data by customer indicates that revenue was received by TomorrowNow entities in the United States ("TN US"), Netherlands ("TN NL"), United Kingdom ("TN UK"), Singapore ("TN SG") and Australia ("TN AU").197 8. Defendants' Improper Behavior Originated in the United States 72. In response to interrogatories, TomorrowNow indicated that "Until recently, TomorrowNow conducted the downloads and stored the relevant materials on its computers. The downloads were conducted by TomorrowNow's employees using certain laptop and desktop computers as well as dedicated download servers located at TomorrowNow's data center in Bryan, Texas. TomorrowNow then transferred and stored downloaded materials on certain file servers."198 Confirmation of this downloading activity to U.S.based servers is also provided by the analysis of Kevin Mandia with Mandiant, computer forensic and security experts retained by Oracle in this litigation.199 73. As a result of all of the download activity occurring at the data center in Bryan, Texas, I understand copying, distribution and use of the improperly

195 "Clear Sailing ­ Oracle Competitive Program SAP Board Update," SAPOR 00299519533 (Kagermann Exhibit 414), at 525. 196 197 198

Deposition of Henning Kagermann (SAP Executive Board Member and CoCEO), September 25, 2008, pg. 138. "TN Customer Reportrevised.xls," TNOR 06125333.

Defendant TomorrowNow, Inc.'s Eighth Amended and Supplemental Response to Plaintiff Oracle Corporation's First Set of Interrogatories (Set One), December 4, 2009, pgs. 1120, at 12. Discussions with Kevin Mandia, Mandiant; February 12, 2010 Supplemental Expert Report of Kevin Mandia, pg. 34 (IP addresses were registered to SAP TN in Bryan, Texas).
199

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accessed Software and Support Materials occurred out of the Bryan, Texas location including domestic and international distribution of Oracle's Software and Support Materials.
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D. 433.

Opinion: Summary of Oracle's Lost Profits As a result of the Defendants' alleged bad acts, it is my opinion that

Oracle has experienced lost profits on support revenue lost to TomorrowNow, as summarized in the following table.

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Table 16: Summary of Oracle's Lost Profits
During TomorrowNow Service P e r i o d $99.6 million $92.7 million $349.0 million $318.2 million

Scenario 1: Total Losses to Oracle Based on Total Lost Support Revenue Excluding Sales of EnterpriseOne and Siebel in Europe

Through May 2015

Scenario 2: Losses by Plaintiff Entity Oracle USA Gross of Fees Paid to OIC Net of Fees Paid to OIC Oracle International Corporation Revenue Ultimately Received by OIC Including OTC and ORC Revenue Oracle EMEA Gross of Fees Paid to OTC Net of Fees Paid to OTC

$83.4 million $47.2 million $37.0 million $42.2 million $9.0 million $4.3 million

$276.9 million $156.9 million $121.1 million $153.8 million $41.0 million $14.1 million

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