SAP drops Siebel lawsuit

SAP said it has dropped two lawsuits against rival Siebel Systems, which centred around the hiring by Siebel of more than two dozen SAP executives.

As part of the settlement, Siebel also dropped a countersuit against the German enterprise resource planning (ERP) applications giant that it had filed in California.

The move follows SAP's decision to sue the customer relationship management (CRM) package supplier last October, claiming it had unfairly hired 27 of its top managers and that Siebel's "predatory hiring practices" had damaged its ability to compete with it.

SAP also sued Andrew Zoldan and Nirna Sippy, two of its former US vice presidents, for allegedly taking trade secrets with them to Siebel.

The supplier said in a statement: "The parties have mutually agreed to settle the litigation and the lawsuits were dismissed without prejudice." Siebel declined to comment, however.

The suit had originally stated that during the last twelve months, Siebel made off with 27 of SAP's employees, including key managers and executives.

In an earlier statement Siebel had said: "Management believes the lawsuit is without merit." But Hasso Plattner, SAP's joint chief executive, had declared: "This is a war."

People familiar with the case claimed that SAP backed down after Siebel said it wanted to question SAP executives by deposition, but the ERP vendor was afraid it could be compelled to discuss its business strategies in detail.

Rob Kugel, a financial analyst at FAC Equities, attested that SAP's lawsuit was an embarrassing move by a company frustrated by repeated delays in releasing its CRM product suite.

In a bid to keep hold of staff, SAP recently approved a new stock programme that will make 6.25 million shares, or six per cent of the company's capital, available to high level executives.