SAP Watch

Jun 26 2008   10:13AM GMT

i2 wins $83 million settlement from SAP

JackDanahy Jack Danahy Profile: JackDanahy

SAP is paying fellow enterprise applications company i2 $83.3 million to settle a patent dispute. In 2006, i2 had accused SAP of infringing on seven i2 patents, including patents for “an extensible model network representation system for process planning” as well as a “method for managing available to promised product (ATP).”

Earlier this month, JMP Securities analyst Patrick Walravens had predicted that damages could have been as high as $500 million, so perhaps SAP got the best of the settlement. While the full terms of the settlement were not disclosed, the companies have agreed to dismiss pending legal actions and to cross-license the patents in question.

In an indication of how far the company has fallen since its glory days a decade ago, AP described i2 as an “inventory management software company.” i2 is in fact a supply chain software company, although the business media appears to have forgotten.

With the patent issue out of the way, it is time for someone — meaning, effectively, either Oracle or SAP — to buy i2. Supply chain management long ago ceased to be a popular standalone domain, and is increasingly dominated by the two enterprise applications giants, who can bundle the functionality in an integrated suite. The other option for i2 would be to liquidate its assets.

Someone associated with i2 is no doubt anxious to get the ball rolling, judging by the rapid acceptance of what could be a lowball settlement. Whatever happens, get ready to say goodbye to a company that, not so long ago, was an analyst and investor darling while SAP was accused of being a dinosaur. Sadly, the Dallas-area i2 is doomed to being remembered for being chewed out by Nike CEO Phil Knight (“This is what we get for our $400 million?”), but its wealth of supply chain IP is still a valuable asset.

Demir Barlas, Site Editor

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