In what it is calling a case of "corporate theft on a grand scale," database giant Oracle has filed a lawsuit against heated rival SAP, alleging the German company illegally accessed Oracle systems to steal software development secrets.

The lawsuit, filed Thursday in U.S. District Court in San Francisco, claims SAP – Oracle’s biggest applications software competitor – has "gained repeated and unauthorized access, in many cases by use of pretextual customer login credentials, to Oracle’s proprietary, password-protected customer support website."

The company alleges SAP lifted more than 10,000 downloads of confidential materials and copied them onto their own servers.

Oracle said it traced the intrusions to IP addresses at a Bryan, Texas-based SAP subsidiary, SAP TN, which was purchased in 2005 to offer third-party support for Oracle software, according to the lawsuit. In late November of last year, Oracle began noticing "unusually heavy download activity" on its password-protected customer support sites for its PeopleSoft and J.D. Edwards products.

In the suit, Oracle contends SAP employees used the login information of Oracle customers whose support packages had expired or were about to run out.

Oracle wants the court to halt SAP’s alleged intrusions and theft and to prevent the company from using what it has acquired to compete with Oracle, according to the complaint.

A SAP spokesman did not immediately return an email seeking comment. But the company said in published reports that it was examining the lawsuit and its policy is not to comment on pending litigation.

If the charges are proven, SAP risks embarrassment, analysts said.

"We do not see a change of the fundamental case for SAP and believe the worst case scenario is probably a large punitive fine," Merrill Lynch analysts wrote in a research report today. "However, the damage for SAP’s reputation would be significant."

Merrill Lynch analyst Kash Rangan told the Associated Press that SAP has been trying to gain customers from Oracle by offering cheaper customer support for Oracle products – but few have left.

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