Software company SAP: World-leading through intellectual property theft?

https://www.tagesschau.de/investigativ/mdr/sap-geistiges-eigentum-101.html

by dinkelberg • 5 years ago

183 113 5 years ago

Welcome to enterprise software, you must be new here.

The big ERP vendors have armies of lawyers and patents that can stymie and delay any IP claims from smaller firms. At the same time, SAP has active relationships with all the customers who matter, and the SAP brand still carries weight, so their version of the product will almost always win a big chunk of market share, despite being inferior.

The only reason there were consequences for SAP in this case is because they stole from Oracle; who invented this playbook.

rapsey• 5 years ago

Distribution trumps all in the enterprise space. If you have the distribution you can sell complete garbage for the price of gold, while sucker upstarts make quality products and live off crumbs.

wayoutthere2• 5 years ago

Right; which is why the exit strategy in the enterprise software space is to get acquired by Oracle / SAP / Microsoft / Salesforce.

logosmonkey• 5 years ago

100% the amount of garbage product I have seen corporations buy is astounding cough Informatica cough. I have also never seen a piece of enterprise software that does half of what a VP was promised it would do.

_Microft• 5 years ago

DeepL translation [0] of the submitted article [1]:

Software company SAP - With data theft to the top of the world?

12.11.2021 11:00 a.m., by Tim Bartz and Christian Bergmann, MDR

According to research by Fakt and "Der Spiegel," the theft of intellectual property by SAP could have a long tradition. As early as 1997 to 2008, the company allegedly misused competitors' developments in cooperation with universities.

Newly surfaced internal documents cast a dark shadow over the software company SAP, its management and supervisory board. According to research by the ARD magazine Fakt and "Der Spiegel," the picture of a company that apparently also tricked its way to the top of the world with unfair methods, especially theft of intellectual property, is emerging.

The events date back to the 1990s and are recorded in an expert report by the law firm Linklaters from 2010. The report was commissioned by SAP itself.

The background to this was the legal dispute with Oracle at the time. The U.S. archrival had sued SAP in 2007 because the Germans had gained access to copyrighted files from Oracle servers through the acquisition of the software service provider TomorrowNow. In a settlement, SAP later had to pay Oracle $357 million in damages.

The Linklaters expert opinion was intended to clarify whether liability claims exist against the then executive board member Gerhard Oswald - Oswald was responsible for the TomorrowNow acquisition. The document contains numerous indications that Oswald and one of his employees knew about copyright infringements. In addition, the SAP Executive Board under CEO Henning Kagermann at the time allegedly approved everything.

However, the company's top management did not draw any conclusions from the report. Oswald was even promoted, although the Linklaters lawyers had recommended that he be parted with "without making any noise". Oswald, a confidant of SAP founder and major shareholder Dietmar Hopp, remained on the executive board until 2016 and has been on the supervisory board since 2019.

Dubious cooperation between University of Mannheim and SAP

Fakt and "Spiegel" also report on a dubious cooperation between SAP and the University of Mannheim starting in 1997, in which Oswald again played a central role. This is also the subject of the report. Officially, the purpose of the cooperation was to have competing software examined by an independent institute, in this case the Business Informatics Research Group at the University of Mannheim. In fact, SAP employees spied on the competition under the guise of the cooperation. Even interventions by the legal department, the compliance team and the auditing department were largely ignored.

According to information from Fakt and "Spiegel," SAP went all the way to the German Constitutional Court to prevent the Mannheim public prosecutor's office from using the report as evidence in an investigation against SAP executives for copyright infringement. Officials had come across the document in 2011 during a raid on the company's headquarters.

Germany's highest court did not accept the constitutional complaint at the time. The criminal proceedings against the board members were dropped at the end of 2017, but SAP had to pay 250,000 euros to the state treasury.

SAP said on request that the copyright infringements by TomorrowNow had been the subject of the proceedings with Oracle, which were settled amicably and had been concluded. The events surrounding the University of Mannheim had been comprehensively processed internally. The protection of intellectual property is the foundation of all SAP solutions.

[0] https://www.DeepL.com/Translator (free version)

[1] https://www.tagesschau.de/investigativ/mdr/sap-geistiges-eig...

Rochus2• 5 years ago

German media seem to have a peculiar relationship with companies in their own country. Wirecard was hyped up by everyone, even when well-founded doubts were raised abroad. And now they are sawing SAP's leg. What are we to believe now?

jahewson• 5 years ago

That a simplistic “good” and “bad” narrative that generalises the entire media into one homogenous blob carries no explanatory power?

ttoinou2• 5 years ago

IP is not property (usus, fructus, abusus) so the concept of IP theft is not meaningful

messe2• 5 years ago

That argument may work in a first-year philosophy essay or—equivalently—a post on medium, but something tells me it's not going to hold up in a court, regardless of jurisdiction.

not1ofU• 5 years ago

China? :-D

__MatrixMan__4• 5 years ago

This is correct. IP usually refers to one of:

- copyright

- trademark

- patent

Which are legitimate legal constructs in their own right, but they're not property. In this case, I think we're talking about patent infringement.

So long as both jurisdictions have agreed to recognize each other's patent laws, it may still be just as illegal as theft.

Whether it's as immoral as theft is a different sort of thing (I say it isn't, which is why I nitpick like this).

dathinab4• 5 years ago

In this context we can exclude `trademark`. Also `copyright` is quite unlikely, too.

So it's probably mostly patent impingement.

And I think we all know how:

- large cooperation infringe on patents of smaller ones without relevant consequences all the time

- there is an endless number of complete absurd patents wrt. software. The patent system in context of software is fundamentally broken.

- due to the US patent system being even more broken then the German one (was at the time the article refers to) the infringed patent might not even have been a valid patent.

But what of this points apply to this specific case I don't know.

fnord77• 5 years ago

correct me if I'm wrong, but isn't the "P" in IP "property"?

bsedlm2• 5 years ago

but the substance which is owned (the property) is not material; yet here we are pretending like it is so that people can 'earn a living' for selling the work done by computers.

__MatrixMan__4• 5 years ago

The term was coined by people who benefit when people confuse the two. It's like the "resin identification code" symbol which was crafted to be easily confused with the "recyclable" symbol--disinformation.

saas_sam• 5 years ago

If you spent a few years of your life coming up with a new way of doing something, and a company saw the details of your idea and got to market before you and never acknowledged you or your work, leaving you with no way to earn a living from your idea, what would you call that? Should that be illegal?

ClumsyPilot2• 5 years ago

"If you spent a few years of your life ... got to market before you and never acknowledged you or your work, leaving you with no way to earn a living from your idea, what would you call that? "

Being a scientist. Or working in academia. Net worth of greatest scientific minds in history, like Einstein or Heisenberg was less than that of average software dev, let alone bankers/businessmen.

At most you can hope to get a Noble Prize, but your discoveries of nuclear physics or quantum mechanics are unpatentable. Fist the journals make money by selling your work, then the companies do, you generally get nothing.

ttoinou2• 5 years ago

If you spent a few years of your life coming up with a plan to rob a bank, and someone just happens to have a look at your plan and rob the bank at your place and never acknowledged you or your work, leaving you with no way to earn a living from your plan to rob a bank, what would you call that ? Should that be illegal ?

dathinab4• 5 years ago

So SAP as a "big cooperate" software concern isn't better then the other "big cooperate" software concerns.

I know that is a bit sarcastic, but not only is IP theft of big software concerns pretty common (the article makes it look like a sensation, a bit (bad) surprise).

But at the same time IP law is often so broken that you could say probably every larger software out there does somehow infringe on some IP.

So without having details is naught impossible to say if it's IP theft which should be IP theft, or IP theft which is only IP theft due to broken laws, and might also not be judged as IP theft after going through a expensive many year law-suite.

And the article fails to lay down why it's the former (ethical questionable IP theft) instead of the later (ethical questionable IP claims).

Through I wouldn't be surprising if it is ethical questionable IP theft.

But I would even be less surprised if it a mixture of both.

dathinab4• 5 years ago

For example:

konkurrenzsoftware [..] untersuchen zu lassen

(roughly ~ Investigate the software of the competition.)

is in the article made to sound bad, dodgy borderline illegal (and maybe was).

But then investigating the marked and your competition is one of the most fundamental practices when it comes to competing on the marked as a large cooperation...

oytis• 5 years ago

Untersuchen sounds more like examining the details of how the software works (up to reverse engineering) to me, not market research.

diarrhea• 5 years ago

But essentially recruiting PhD students to reverse engineer/"examine" a competitor's software is twisted.

ksec2• 5 years ago

So SAP as a "big cooperate" software

I still remember a few years ago half of HN have never heard of SAP.

deelowe• 5 years ago

It’s more common now bc sap buys huge cloud contracts.

isbvhodnvemrwvn• 5 years ago

I'd be surprised if less than 3/4rd of Germany's GDP touches SAP at some point.

alistairSH2• 5 years ago

Lol. Really? How is that possible?

saagarjha2• 5 years ago

Much of FAANG runs on SAP. You may not touch it in your day-to-day work, but there is going to be a team dealing with it.

pr07ecH70r• 5 years ago

Alle Unternehmen stehlen Ideen von jungen Studenten voller Hoffnungen und Träume. Sehr heuchlerisch aber auch sehr lustig, dass diese Nachrichten gerade jetzt herauskommen...

Aka, big companies are full of c*p!

intunderflow• 5 years ago

Like many laws, IP law doesn't apply to big powerful companies unless they go after another big company

ldiracdelta4• 5 years ago

The counter-balance to big scary corporations that can't be challenged because of infinite pockets for lawyers is "loser pays tort reform"

blincoln• 5 years ago

The possibility of losing and having to pay for all of those corporate lawyers in addition to one's own lawyers seems like an even bigger disincentive to me. What am I missing?

bsedlm2• 5 years ago

Intellectual Property is a dumb idea, a legacy of thousands of years of exclusive (physically unique) markets of goods (i.e. making copies is expensive).

Digital artifacts require a new non-exclusive property market scheme (to be determined; it's a difficult problem). Enforcing the older paradigm with laws and coercion is not a long term solution.

kristaps• 5 years ago

Sure, copies are cheap, but producing the original is often not.

Unrestricted copying would discourage quite a few projects being started due to not having any chance to recoup investment.

While IP may be a flawed tool at times, it still is a useful tool.

cma• 5 years ago

There are alternatives with no artificial scarcity, this one is public funds for everyone to make patreon style grants to creatorsthey support (2003):

https://cepr.net/report/the-artistic-freedom-voucher-interne...

dghlsakjg• 5 years ago

I think that the problem is that patent law allows for broad software concepts that have never been implemented. And it ignores differences in implementation.

Can you imagine if copyright law allowed for things as broad as: “A novel or series of novels where a boy is educated at a school for wizards”. That’s what amazons 1-click patent was like. It was more or less: we will allow a client device to send both a product id and a user id by clicking a button, that will then cause a purchase to be made for that product and client. That patent caused something as trivial as “buy now” to be locked up by Amazon for years.

rackjack3• 5 years ago

This problem has already been "solved". In drug companies, making new a drug is extremely expensive, but once you have the formula, it is (usually) very cheap to produce. So the government gives the maker of a new drug a patent for some number of years. Enough to milk the formula for cash, while still forcing innovation once it expires and rest of the companies start making it. These patents also prevent derivative works.

The problem with intellectual property (I might be mixing copyright and intellectual property here, if I am, my apologies) is that by preventing derivative works while also having a near infinite lifespan, it absolutely crushes any kind of creative innovation. IMO the lifespan of intellectual property should be 40-50 years, reduced when going to market, similar to how drug patents work. This lets smaller creators who don't have the vast war chests of literal drug companies to make a good living off of it, while still allowing for innovation for the next (or next next) generation.

The REAL problem is that Disney and such have been lobbying for extending copyright and IP protections. I think we're up to nearly 100 years now.

https://en.wikipedia.org/wiki/Copyright_Term_Extension_Act

EamonnMR2• 5 years ago

If IP expired quickly like patents we wouldn't be subjected to so many franchise films and that would be a huge win.

WalterBright2• 5 years ago

PaulHoule3• 5 years ago

It's well established that patents work for drugs in the sense that drug companies make a tremendous investment in developing drugs.

For other things the case is less clear.

For instance fighting between Curtis Aircraft and the Wright Brothers held back the U.S. Aircraft industry for a decade until the Government saw it being a crisis in WWI.

Damian111• 5 years ago

I work in the patent field, mostly in technology patent (5G, wireless, IoT, etc...)

Patents in tech from what I know are valid for 20 years and that includes all countries that operate with PCT (patent cooperation treaty)

https://www.wipo.int/pct/en/

Most countries you could think off operate within PCT laws.

While I had heard about the Mickey Mouse treaty I never dug into it too much, there are different patent for different stuff I think the personal protection characters that are the face of something (like Mickey Mouse) are some of the most outrageous long term patent.

But for technology most patent only last 20 years and while I won't get into the nitty gritty of how patent protection works its mostly done to protect big companies from spending alot of money on RnD and then having there competitors steal the done invention and profit from it.

Big techs are in general lenient when a pop a mom shop infringes on an ip within the 20 years period.

Just wanted to clear things up, most inventions that you guys could think up that would be patentable are only for 20 years not 100.

specialist• 5 years ago

So the government gives the maker of a new drug a patent for some number of years.

Noob question:

Why aren't patents treated like govt issued licenses, leases?

Want exclusive use of airwaves, water, mining, catchy song, clever idea, whatever? Terrific. Pay up.

Set the price at just over reasonable. To prevent people from frivolously camping on stuff to exclude others from using it.

Economists are smart about setting price. Auctions for stuff that's hard to price (airwaves). Boilerplate for bog standard stuff (trademarks, songs). Whatever works. With some clever veto points to thwart regulatory capture.

hitpointdrew• 5 years ago

40-50 years in software is an eternity, it should be MUCH lower than that like 10-15. There is zero reason that Windows 3.1, Windows 95, and Windows 98 should be protected by any copyright/patent at this point. All of those should be in the public domain by now.

sizzle• 5 years ago

What about making biosimilars once a drug is discovered and patented, biosimilars can be made that are similar but different enough.

metalliqaz• 5 years ago

Drugs are a bad example. There exists no free market for drugs. When the choices are buy a patented drug or die, then the price becomes unethical very quickly.

kmeisthax• 5 years ago

You have this backwards. Making copies is cheap, especially in the digital realm; that's why copyright law restricts the market for copies. If anything, copyright law is forward thinking and anticipated copying getting cheaper over time.

There's really no need for a "non-exclusive property market scheme"[0] either. The whole point of restricting copying is to make money move out of your wallet and to publishers and creators. The problem we have is that the copyright monopoly lasts far longer than what's needed to pay for the production of new creative works, so we're rewarding ownership of existing ones which is contrary to the point of the law.

[0] I'm assuming this is code for something akin to, but not exactly like, NFTs.

hn_throwaway_992• 5 years ago

At the same time, I'm pretty familiar with the case of patent troll (OK, maybe not a full patent troll in the complete sense in that they did have a selling product at one time, but a troll in the sense that the patent was complete bullshit) where SAP lost a $400 million dollar patent lawsuit (surprise surprise, in Eastern Texas jurisdiction), appealed it all the way to the SCOTUS who declined to hear it, settled with Versata, the patent troll, and then the original patent was declared invalid [1]. Must be nice to have collected major coin on a patent that's not even valid.

Point is that at this level there is tons of corporate IP bullshit going around, it's basically a required part of playing the game.

1. https://www.reuters.com/article/us-sap-se-versata-patent-idU...

silexia• 5 years ago

The entire patent system is ridiculous. Every new idea is a tiny little increment on the vast mountain of human knowledge. No one should own it and prevent others from building further structures on top of that.

Everyone here on HN knows that ideas are worthless and execution is everything.

eulgro• 5 years ago

Don't patent drive innovation though? Companies must find alternatives to compete instead of copying everything from the industry leader. Other than that I agree that patents are ridiculous.

docflabby2• 5 years ago

Every world leading company won it's position though unfair advantage. Those are normally breaking laws, fraud, stealing technology or slave labour.

None of them are there on merit.

ericd3• 5 years ago

Which of those got Google to where they are? Apple?

rStar3• 5 years ago

all and all. other things too, but companies naturally want to downplay the impact of those 4 factors

cheschire• 5 years ago

I'm pretty sure there are multiples of movies made about Apple's journey that you may be interested in. As for Google, do you recall from the last 20 years any of the complaints about SEO fairness, AMP drama, Chrome monopoly, etc?

This feels like a bait question because the answers are so obvious.

JanSt2• 5 years ago

(illegal) data collection (in many jurisdications) that is now impossible to replicate is a major competetive advantage

gruez• 5 years ago

TSMC is the world leader in semiconductors. Were they "breaking laws, fraud, stealing technology or slave labour"?

Visa/Mastercard are the world leaders in payment processing. Were they "breaking laws, fraud, stealing technology or slave labour"?

ggoo• 5 years ago

“Unfair advantage” doesn’t have to be exactly one of those 4 items.

ryoshu• 5 years ago

Visa has been breaking laws: https://en.wikipedia.org/wiki/Visa_Inc.#Litigation_and_regul...

julienfr112• 5 years ago

they hired Taiwanese talents from silicon valley that left with IP, no ?

mdorazio2• 5 years ago

I’m simplifying things greatly here, but TSMC was founded by a man who took his US semiconductor experience to Taiwan and got his initial fab partially bankrolled by the Taiwanese government to get it off the ground. Personally, I’d say that counts as unfair advantage.

kongolongo• 5 years ago

You could easily argue they both did and do. Raw materials (see Cobalt mining in DRC as example) for semiconductors are tracible to mines throughout central Africa and South America that use child slave labor. Visa/Mastercard uses computers, which have semiconductors, which use slave labor as seen above, so they too use slave labor. It just depends how far you want to set the scope of the argument but you could easily trace all companies in all developed countries to slave labor arguments similar to the above.

docflabby2• 5 years ago

I forgot nepotism :) it's not an exhaustive list

tata71• 5 years ago

Last one's a joke. Right?

popcube• 5 years ago

they got whole of resources from government, this is a very special condition. do it happen on most of big companies?

globalise83• 5 years ago

There are many winner-take-all markets where dominance by a single firm makes complete economic sense ('natural monopolies'). In such a scenario it doesn't really matter which firm takes the lead: one of them will end up on top and it doesn't have to be through foul means - the self-reinforcing dynamics of the market are enough.

hn_throwaway_992• 5 years ago

This is the point that has definitely become super apparent to me in the last decade or so. It's not that companies have to be evil or fraudulent, but usually the companies that "win" end up being the most aggressive, and then there are just a ton of positive feedback loops that make the company with the slight lead even stronger. All people (potential employees, potential execs, VC firms) want to go with the winner, so as soon as one firm starts to pull away from the pack it becomes much easier for the firm to attract the best talent and funding.

fulafel• 5 years ago

And convincing countries to give you monopoly on various things, and to wielding power over countries to make them pressure other countries to do the same.

natded• 5 years ago

Their products make me want to kms thats all I know.

deanCommie• 5 years ago

SAP is also a big conglomerate full of aquisitions that shouldn't be tainted with this...

In the 90's I worked at Seagate Software in Vancouver, BC, which made Crystal Reports (A million readers just either felt a wave of nostalgia or a shudder of disgust).

Seagate Software became Crystal Decisions, got acquired by Business Objects, which got acquired by SAP.

I wonder how much of the SAP work in Vancouver today is still on something related to Crystal Reports...

jeabays• 5 years ago

There is nothing wrong with "intellectual property" "theft", it overwhelmingly benefits everyone BUT the western multinational megacorporations, so I wholeheartedly support "intellectual property" appropriation.

Software company SAP: World-leading through intellectual property theft?

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