SAP SE has been hit with a lawsuit from a former joint venture partner claiming the German enterprise software giant stole trade secrets and copyrights to create its own competing product, and then coerced customers of its enterprise resource planning apps to purchase it.
According to the 35-page complaint filed Tuesday by enterprise data analytics and warehousing company Teradata Inc., the market for SAP’s competing HANA product generated $2 billion in revenue as of 2016. Teradata alleges SAP’s actions violated state and federal trade secret laws, infringed its copyrighted database software, and violated federal antitrust claims by unlawful tying the sale of the two SAP products and monopolizing the market for enterprise data analytics and warehousing services for customers using its core apps. Teradata is asking for treble damages on its antitrust claims.
“Teradata supports competition and innovation in the data and analytics space,” the company said in a press release announcing the lawsuit, filed in the Northern District of California by lawyers at Morrison & Foerster. “SAP’s conduct, however, is neither pro-competitive nor innovative.”
Andy Kendzie, a spokesman for SAP, said the company was “surprised” by the lawsuit. “Although SAP generally does not comment on pending litigation, SAP may issue a statement, if appropriate, after it has had an opportunity to review the complaint,” Kendzie said.
According to the lawsuit, SAP and Teradata entered into a joint venture to offer Teradata’s “massively parallel processing” architecture tools to customers who used SAP to gather and manage the data they use to conduct day-to-day operations, such as sales and inventory transactions, as well as financial, accounting and human resource tracking. But, according to Teradata, the joint venture was used as an avenue for SAP to access Teradata’s trade secrets and copyrights so SAP could develop its own similar analytics tool, SAP HANA, which launched in 2010. According to Teradata, a number of its employees working on the joint venture left for SAP, where they worked on HANA.
The lawsuit comes after a 2015 article from Der Spiegel reported that an internal SAP auditor found SAP had misappropriated proprietary information from Teradata during the joint venture. According to the lawsuit, SAP “incorporated Teradata’s proprietary and confidential information into HANA, solving HANA’s speed and efficiency problems using the same solutions that Teradata employees developed using Teradata’s trade-secret techniques during the [joint venture].”
The suit goes on to allege that since the launch of the latest version of SAP’s core enterprise resource planning app in February 2015, customers must now adopt HANA as their transactional database. A Teradata spokeswoman declined to say how much the company is seeking in total damages.