SAP also admitted that a "business case" it had prepared prior to the purchase of TomorrowNow in 2005 predicted "likely legal action" from Oracle. But SAP denied other allegations in that particular claim, such as "the presentation made clear that TomorrowNow did not operate legally."

In another claim, Oracle alleged that SAP "wrongly predicted Oracle would not sue" and that the TomorrowNow business case stated that "Oracle's legal challenges to TomorrowNow's ability to provide derivative works/support will require Oracle to also sue its customers -- a difficult situation for Oracle."

In responding to that claim, SAP admitted that the paragraph in question "partially quotes various documents" but otherwise denied the allegations, in a pattern that continues through its filing.

SAP also admitted that before a "figurative 'firewall'" was put in place between TomorrowNow and SAP, "a TN employee provided access to a few files containing 'Oracle' materials to a few employees at SAP." But SAP added that it had "admitted that fact in their initial discovery responses in this case well over a year ago."

Both Oracle and SAP declined to comment on SAP's latest filing.

A potentially key event in the case is set to occur on Feb. 23, when the parties will meet for a settlement conference. A judge has ordered SAP and Oracle to provide proposals that include specific dollar amounts for a settlement before that date.

Observers who have been following the case said Monday said it would make sense for the parties to settle -- something they have tried and failed to do before.

"What I found telling was how many times the [SAP] answer said 'we admit or we agree with what Oracle said,'" said Eric Goldman, an associate professor of law at the Santa Clara University School of Law and director of the school's High Tech Law Institute. "They didn't do it that much, but most answers deny everything. That's very unusual to see in an answer."

At the same time, "it's good to see that they've both found something they can agree on," Goldman said.

It would be "unbelievable" if the companies weren't having settlement talks, given the likely multimillion dollar cost of the litigation, he said.

Oracle has not provided a specific damage demand but has said the figure could top US$1 billion.

"That sounds like a really big number, but SAP could just decide to afford it," Goldman said. "They have the financial wherewithal to pay something like that without it devastating them." But there's also good reason for SAP to delay the settlement process and try to bring that number down, he added.