New moves – well, new filings and statements – were made in the software lawsuit of the year this week.

Yes, we’re talking Oracle v. SAP, a case “about corporate theft on a grand scale, committed by the largest German software company,” in the opening words of the complaint.

Oracle originally brought the lawsuit against SAP in the US Federal District Court in the Northern District of California on March 22. The lawsuit alleged that SAP was guilty of violations to the Federal Computer Fraud and Abuse Act and California Computer Data Access and Fraud Act, Unfair Competition, Intentional and Negligent Interference with Prospective Economic Advantage and Civil Conspiracy, i.e. they ripped off Oracle data.

The suit alleges that “staff at SAP’s TomorrowNow subsidiary pretended to be Oracle customers in order to gain access to the PeopleSoft and JD Edwards customer support web site.”

Oracle investigators reported 10,000-plus unauthorized downloads of Oracle product in November and December 2006. Unfortunately (allegedly) for SAP, the Oraclers traced the downloads back to Bryan, Texas, location of TomorrowNow headquarters. Oops.

On June 22, Oracle amended the complaint in a federal district court in San Francisco, tacking on federal copyright infringement claims and breach of contract claims.

Yesterday, SAP legally filed in the ‘suit, and Henning Kagermann himself spoke to the media, explaining that TomorrowNow was authorized to download materials from Oracle’s website on behalf of TomorrowNow customers.

Kagermann also admitted that “SAP acknowledged that some inappropriate downloads of fixes and support documents occurred at TomorrowNow. Importantly, SAP affirmed that what was downloaded at TomorrowNow stayed in that subsidiary’s separate systems. SAP did not have access to Oracle intellectual property via TomorrowNow.”

Kagermann did his best to appear contrite and willing to crack down on the offenders (soon to be a couple of ex-employees at TomorrowNow, don’tcha think?), most pundits see an embarrassed CEO now all too willing to ditch the unruly subsidiary. In doing so, he’ll be doing his best to cover his assets, credibility and reputation.

As explained in the twenty-page legal filing, TomorrowNow “is an independent, separate organization, with their own systems and their own management, so no SAP employee can come into contact with materials downloaded by TomorrowNow.”

Or, as Parmy Olsen at Forbes.com summarized, Kagermann essentially admitted that “Our branch got hold of your secrets, but we didn’t see them.”

In return (fire), Oracle legal counsel Geoff Howard of Bingham McCutchen LLP got to unload a salvo with (who suddenly looks pretty good) stated that, “SAP CEO Henning Kagermann has now admitted to the repeated and illegal downloading of Oracle’s intellectual property. Oracle filed suit to discover the magnitude of the illegal downloads and fully understand how SAP used Oracle’s intellectual property in its business. To the extent requested, Oracle will cooperate with the Department of Justice investigation of SAP announced by the company in its press release.”

Gee, so the “we didn’t see them” defense isn’t going to work then?

Oh, this one’s just starting to get good…