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Teradata Corp. v. SAP SE

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This article is about the 2018–2026 US litigation between Teradata and SAP over the sale of S/4HANA with SAP HANA and over trade secrets. For SAP HANA runtime and full use licences, see SAP HANA runtime and full use licensing.

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Teradata Corp. v. SAP SE was a lawsuit filed on 19 June 2018 in the US District Court for the Northern District of California, in which Teradata, a maker of enterprise data warehouse software, sued SAP.[5][6] Teradata claimed that SAP unlawfully conditioned the sale of its S/4HANA ERP application on the purchase of a licence for its SAP HANA database, in violation of Section 1 of the Sherman Act, and misappropriated a Teradata trade secret known as the “batched merge” method. SAP counterclaimed for patent infringement.[1] The district court granted summary judgment to SAP in 2021; the Ninth Circuit reversed in December 2024; the Supreme Court declined review in October 2025; and the parties settled in February 2026 on terms under which SAP paid Teradata USD 480 million.[1][3][5] The case is relevant to software licensing because the challenged arrangement was the way SAP licensed HANA with S/4HANA, including the runtime licence, and because the trade secret claim turned on the licence and ownership clauses of a joint development agreement.

Background

As the Ninth Circuit described the record, SAP and Teradata began the “Bridge Project” in 2008, a joint effort to integrate SAP’s front-end applications with the Teradata Database. The companies signed a software development cooperation agreement, restricting disclosure of each party’s confidential information, and a mutual non-disclosure agreement setting out how shared information would be kept confidential. During the project a Teradata engineer sent SAP a design document marked “Teradata Confidential” that discussed the batched merge method. SAP released HANA in 2011 and, two months later, terminated the Bridge Project.[1]

In 2015 SAP released S/4HANA and combined it with HANA in a single sales offering. In the court’s words, customers buying S/4HANA “must purchase HANA as well”, either with a full-use licence without restrictions on how HANA’s data is used, or with a cheaper “runtime” licence that restricts exporting HANA’s data for use with third-party products; the court recorded that 88 percent of SAP’s customers had bought HANA with a runtime licence since S/4HANA’s release.[1]

The dispute

Teradata alleged that SAP tied S/4HANA (the alleged tying product) to HANA (the alleged tied product), using its position in enterprise resource planning software to harm competition among enterprise data warehouse products, and that SAP misappropriated the batched merge method, which Teradata said it had disclosed in confidence during the Bridge Project.[1][5] SAP disputed the claims. Among other arguments, SAP contended that the tie should be judged under the rule of reason because the claim concerned innovative conduct in a technology market, that HANA was platform software, that Teradata had not properly designated the method as confidential, and that the parties’ agreements gave SAP the right to use it. SAP asserted counterclaims that Teradata infringed US Patent Nos. 9,626,421, 8,214,321 and 7,617,179.[1][2] Teradata’s filings state that related patent litigation between the parties was also started in the United States and Germany.[5]

Decisions and outcome

District court (2021). In November 2021 Judge William H. Orrick granted SAP summary judgment on the tying claim, relying largely on the exclusion of parts of the opinion of Teradata’s economic expert, and on the technical trade secret claim, holding that Teradata had not adequately marked the method as confidential under the non-disclosure agreement and that, in any event, it had licensed SAP to use the method under the cooperation agreement. Two weeks later the court entered partial final judgment under Rule 54(b), staying the remaining claims and counterclaims.[2]

Federal Circuit (2023). Teradata appealed to the Federal Circuit. On 1 August 2023 that court held that SAP’s patent counterclaims did not arise from the same transaction or occurrence as Teradata’s claims, so it lacked jurisdiction, and transferred the appeal to the Ninth Circuit.[2]

Ninth Circuit (2024). On 19 December 2024 the Ninth Circuit reversed and remanded.[1] It held that:

  • the district court abused its discretion by excluding the expert’s testimony on market definition, market power and harm to competition;
  • with that testimony, Teradata raised a triable issue under both the modified per se rule for tying and the rule of reason;
  • the narrow exception for platform software recognised in Epic Games v. Apple and United States v. Microsoft did not apply, because HANA “is not a software functionality that is technologically or physically integrated” with SAP’s ERP application but “a standalone EDW product that SAP can and does sell independently of S/4HANA”, making the case “more akin to standard contractual tie cases”;
  • there were triable disputes over whether Teradata properly designated the batched merge method as confidential, and over whether the cooperation agreement’s licence to “Input” (section 9.4) or the reservation of “Partner Materials”, including “tools”, to Teradata (section 10.2) governed the method.

The United States and the Federal Trade Commission participated as amici curiae.[1]

Supreme Court (2025). Rehearing was denied on 4 March 2025. SAP petitioned for certiorari on 2 June 2025 (No. 24-1324), supported by amicus briefs from the Washington Legal Foundation and from Microsoft and Meta Platforms. The petition was denied on 6 October 2025.[3]

Settlement (2026). On 19 February 2026 Teradata entered into a settlement agreement with SAP SE, SAP America and SAP Labs to resolve all past and pending litigation between them, with mutual releases. Teradata disclosed a gross payment of USD 480 million and said the parties would ask the court to dismiss all claims, defenses and counterclaims with prejudice.[4] Teradata later reported that SAP paid the amount on 19 March 2026 and that dismissal with prejudice was granted on 20 March 2026.[5] Because the case settled after remand, no jury decided whether SAP’s conduct was unlawful or whether a trade secret was misappropriated; the Ninth Circuit’s rulings decided only that those questions could not be resolved on summary judgment.[1]

Significance for software licensing and SAM practice

  • Licence packaging as a legal question. The Ninth Circuit treated the requirement to buy a HANA licence, runtime or full use, with S/4HANA as a contractual tie that could be assessed under the per se rule, and declined to extend the platform-software exception to software markets generally.[1] The opinion is a statement of Ninth Circuit law on tying, not a finding that SAP acted unlawfully.
  • Runtime licence restrictions. The court’s description of the runtime licence, which restricts using HANA data with third-party products, and its note that most S/4HANA customers bought runtime HANA, show why the distinction between runtime and full use rights matters when an organisation connects third-party analytics or data warehouse tools to an SAP system.[1]
  • Joint development and confidentiality clauses. The trade secret ruling turned on the marking requirement of a non-disclosure agreement and on how a licence to “Input” interacted with a reservation of “Partner Materials”. The court held that a rational juror could find the word “tool” in that reservation broad enough to cover a technique, and that a jury could find the district court’s reading of the agreements inconsistent with the implied covenant of good faith and fair dealing under New York law.[1]
  • Appellate route. The Federal Circuit decision shows that where patent counterclaims are permissive rather than compulsory, an appeal on non-patent claims goes to the regional circuit.[2]

Lessons learned

  • Runtime and full use rights differ. The court described the runtime HANA licence as restricting export of HANA data for use with third-party products, and noted that most S/4HANA customers bought runtime HANA.[1] The licence type should be confirmed before third-party analytics or data warehouse tools are connected to an SAP system.
  • Bundling can be a legal question. The Ninth Circuit treated the requirement to buy a HANA licence with S/4HANA as a contractual tie that could be assessed under the per se rule.[1] The case settled after remand, so no court decided that SAP’s conduct was unlawful.[5]
  • Joint development terms matter. The trade secret claim turned on the marking requirement in a non-disclosure agreement and on how a licence to “Input” interacted with a reservation of “Partner Materials”.[1] Organisations sharing technology with a vendor should check how such clauses allocate rights before disclosing material.

References

  1. Teradata Corp. v. SAP SE, No. 23-16065 (9th Cir. Dec. 19, 2024), opinionPublished opinion by Judge Miller; reversed and remandedEffective 2024-12-19. Retrieved 2026-09-30.
  2. Teradata Corp. v. SAP SE, No. 2022-1286 (Fed. Cir. Aug. 1, 2023), nonprecedential opinionHolds the Federal Circuit lacks jurisdiction; transfers appeal to the Ninth CircuitEffective 2023-08-01. Retrieved 2026-09-30.
  3. Docket No. 24-1324, SAP SE, et al. v. Teradata Corporation, et al. (Supreme Court of the United States)Petition filed 2025-06-02; denied 2025-10-06Retrieved 2026-09-30.
  4. Teradata Corporation, Form 8-K (Item 8.01), event date 2026-02-19Announces the SAP settlement agreementEffective 2026-02-19. Retrieved 2026-09-30.
  5. Teradata Corporation, Form 10-Q for the quarter ended 2026-03-31Describes the TD-SAP 1 suit, payment on 2026-03-19 and dismissal on 2026-03-20Effective 2026-05-06. Retrieved 2026-09-30.
  6. Teradata Corporation v. SAP SE, No. 3:18-cv-03670 (N.D. Cal.), docket (CourtListener RECAP)Public copy of the district court docketRetrieved 2026-09-30.

See also

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