SAP America, Inc. v. Anheuser-Busch Companies, LLC was a commercial arbitration that SAP America began in New York on 21 February 2017 under the Commercial Arbitration Rules of the American Arbitration Association. SAP claimed that the brewer had breached a software licence agreement dated 30 September 2010 by using SAP systems and data, directly and indirectly, without appropriate licences and by underpaying fees, and sought reformation of the agreement and damages “potentially in excess of USD 600 million”.[1] The parent company, Anheuser-Busch InBev SA/NV, later reported that the parties settled the dispute on 30 June 2017 and that the matter was closed.[3]
Because the dispute went to private arbitration and settled, there is no court judgment, public award or public pleading. The only official record located for this article is Anheuser-Busch InBev’s own disclosure in its annual reports on Form 20-F filed with the US Securities and Exchange Commission. The claims described below are SAP’s allegations as summarised by the respondent’s parent company; they were never tested before a tribunal in public.
Background
According to the 2016 Form 20-F, the relationship was governed by a Software License Agreement dated 30 September 2010, “together with related amendments and ancillary documents” (defined in the filing as the “SLA”).[1] The filing does not describe which SAP products, metrics or user types the agreement covered, and it does not name the systems through which the alleged indirect use took place.
The arbitration was commenced five days after the English High Court gave judgment on liability in SAP UK v Diageo, a separate case in which the court held that users reaching mySAP ERP through third-party systems needed Named User licences under that customer’s agreement. The two proceedings were brought by different SAP entities, under different contracts and in different forums.
The dispute
The 2016 Form 20-F, filed on 22 March 2017 under the heading “SAP Arbitration”, stated that SAP’s statement of claim:[1][2]
- asserted multiple breaches of the SLA;
- was based on allegations that company employees used SAP systems and data “directly and indirectly” without appropriate licences;
- alleged that the company had underpaid fees due under the SLA; and
- sought both reformation of the SLA in certain respects and damages potentially exceeding USD 600 million.
Anheuser-Busch InBev stated in the same filing: “We intend to defend against SAP’s asserted claims vigorously.”[1] The filing did not set out the company’s defences in detail, and no statement of defence has been published.
Outcome
In its Form 20-F for 2017, filed on 19 March 2018, Anheuser-Busch InBev reported that the parties settled the dispute on 30 June 2017 and that the matter is now closed.[3] Neither the filing nor any official statement by SAP located for this article discloses the terms of the settlement, including whether any payment was made or whether the licence agreement was amended. The settlement terms should therefore be treated as confidential. No arbitral award was reported.
Significance for software licensing and SAM practice
The case produced no reasoned decision, so it sets no precedent on how “use” or “indirect use” should be interpreted. Its practical relevance lies in what the public record shows:
- The claim was framed as contract breach. As disclosed, SAP’s claim rested on the terms of the licence agreement and sought both damages and reformation of the agreement.[1] The same framing appears in the Diageo judgment, where the court dealt with the licence terms and declined to rule on intellectual property infringement that had not been pleaded.
- Indirect use was part of the claimed exposure. The disclosure expressly refers to use of SAP systems and data “directly and indirectly”, which places indirect access within the scope of licence compliance reviews of SAP estates.[1]
- Dispute resolution clauses shape visibility. Because the agreement led to arbitration, the arguments, evidence and any settlement remained private. Only the listed parent’s securities disclosures made the existence and size of the claim public.[1][3]
In April 2018 SAP published a pricing model for “Indirect/Digital Access” to SAP ERP and S/4HANA based on the creation of nine document types, with options for existing customers to keep their contracts, exchange licences or convert contracts, and a statement that SAP would not pursue back maintenance for under-licensing associated with indirect access from customers who engaged proactively and in good faith.[4] At the same time it published an update on its audit practice, stating that licence audits are scheduled centrally and independently of the sales organisation, that sales staff cannot start or cancel an audit, and setting out a decision tree that auditors follow for indirect access under legacy ERP contracts.[5] Neither document refers to this arbitration, and SAP states that both are informational and do not modify customer agreements.[4][5]
For effective license position work, the disclosure is a reminder that the licence position for an SAP estate depends on the specific agreement and its amendments, and that users and systems reaching SAP data through non-SAP software are within the scope of what the vendor may claim under that agreement.
Lessons learned
- Count indirect use. As disclosed, SAP’s claim covered use of SAP systems and data “directly and indirectly” without appropriate licences.[1] A licence position for an SAP estate should include users and systems that reach SAP data through non-SAP software.
- Work from the agreement itself. The claim rested on a 2010 licence agreement together with its amendments and ancillary documents.[1] SAP’s later pricing and audit documents state that they do not modify customer agreements, so the executed contract remains the basis of the position.[4]
- Know where disputes will be heard. Because the agreement led to arbitration, the arguments and the settlement terms stayed private, and the claim became public only through the parent company’s securities filings.[1][3]
- Expect contractual remedies. SAP sought reformation of the agreement in certain respects as well as damages potentially exceeding USD 600 million.[1] Exposure from under-licensing can therefore include changes to contract terms, not only a payment.