Oracle has taken its bitter rivalry with business applications vendor SAP up another notch, suing the German software rival for violation of US fraud legislation, unfair competition and civil conspiracy.

"This case is about corporate theft on a grand scale," the lawsuit contends. Oracle alleges it has discovered that SAP is "engaged in systematic, illegal access" to Oracle's computerised customer support systems.

Oracle filed the lawsuit against SAP, its SAP America division and its TomorrowNow subsidiary, which provides third-party maintenance and support in large part for Oracle applications drawn from its PeopleSoft, Siebel and JD Edwards product families. The database, applications and middleware vendor alleges that SAP violated the Federal Computer Fraud and Abuse Act and California Computer Data Access and Fraud Act.

The suit points to a period of unusually heavy download activity from Oracle's Customer Connection user support website for its PeopleSoft and JD Edwards applications in late November and December 2006. The site contains Oracle copyright material including software updates, bug fixes and patches.

Customers paying Oracle for support log into the site with their passwords and download the software they require. Instead of genuine users, the suit alleges SAP employees used the log-in credentials of Oracle customers whose support rights had already expired or were about to expire in a few days' time. Those staffers then allegedly copied Oracle's software and support materials.

Through that access, SAP ended up with "an illegal library of Oracle's copyright software code," the complaint said. Using that information, SAP offered cut-rate support services to Oracle customers in the hopes of eventually migrating them over to use SAP's rival applications.

An SAP spokesman said the company had no comment on the lawsuit as its attorneys are examining it. SAP will issue a comment before the end of the week, he added.

In total, Oracle claims to have found more than 10,000 unauthorised downloads of its software and support materials from its customer support site. The vendor alleges that the illegal downloads originated from an internet protocol (IP) address in Texas, an SAP America branch office location and home to the SAP subsidiary, TomorrowNow. That IP address connects directly to SAP's computer network, the lawsuit said. When Oracle shut down that particular IP address, another one linked to SAP, appeared and the unlawful access and downloading continued.

Oracle also listed unlicensed downloads allegedly linked to TomorrowNow on behalf of customers including Honeywell, Merck & Co. and OCE-Technologies.

SAP acquired TomorrowNow in January 2005. It was previously an independent software support company founded by former PeopleSoft staff. Part of Oracle's suit relates to the role it says TomorrowNow played as part of SAP's Safe Passage programme designed to move Oracle users over to SAP applications.

David Dobrin, founder and president of B2B said he does not think anyone at TomorrowNow's management did anything wrong.

"I don't see this as TomorrowNow's management trying to cross some line or cheat or steal," he said. "The most likely thing is some rogue employees were doing something they thought was legitimate and maybe it was and maybe it wasn't, but Oracle decided it wasn't and is filing suit against SAP."

Dobrin said that Oracle likely sued SAP even though TomorrowNow acts independently of its parent company because "they get a lot more publicity, and SAP has deeper pockets." However, he said from his experience in talking with executives from SAP and TomorrowNow, the companies do try to keep their businesses separate to avoid a conflict of interest. "[This situation] has nothing to do with SAP," Dobrin said.

Elizabeth Montalbano in New York contributed to this story.