Intellectual Property… Why You Should Care About Oracle’s 1.3 Billion Jury Verdict Over SAP

George Roberts

November 30, 2010

As an operational executive with over 30 successful years in the software industry and now a partner in OpenView that invests venture capital in expansion stage software companies, I learned the value of Intellectual Property (IP) early in my career.

As a venture capital firm, we are chartered with investing 100’s of millions of dollars of our LP’s capital in a responsible fashion. As part of that responsibility, when we look at expansion stage companies we always value companies with defensible IP more than companies that don’t have defensible IP. It not only can give you an unassailable competitive advantage in your space, but also your competition can’t steal your property or use it without your approval.

The Oracle lawsuit verdict of 1.3 Billion over SAP (you can read about it in the WSJ here) is a very good thing for the software industry and reaffirms why IP is something every software company should strive to build and protect.

SAP admitted its guilt before the trial (SAP set aside 120 million to deal with the issue) and during the trial it was proven that senior executives at SAP were aware of the activity from the very beginning. For SAP, what probably started as a 10 million dollar acquisition of TommorrowNow and a chance to poke a sharp stick in Oracle’s eye has turned into an expensive embarrassment and a distraction for Waldorf. My guess is the 120 million they originally set aside will not be enough… what do you think?

Intellectual Property… Why VC’s like it… Why you want to have it… Why your competition should leave it alone when it is not theirs.

All the best!

G

Venture Partner

<strong>George Roberts</strong> is a Venture Partner at OpenView. He enjoys partnering with companies and helping them achieve their goals through strategy, focus and operational execution. From 1990 to 2003, George spent 13 years at Oracle Corporation, most recently having served as Executive Vice President of North American Sales. While at Oracle, George was responsible for over $1 billion in revenue and more than 2,000 employees, reporting directly to the company’s CEO and Chairman, Larry Ellison.