New York: Oracle Corp failed to revive a $1.3bn jury verdict in its long-running copyright dispute with German software company SAP SE as a US appeals court said Oracle must choose to accept a lower amount or face a new trial.
In a ruling, the 9th US Circuit Court of Appeals in San Francisco said jurors used “an undue amount of speculation” in awarding $1.3bn in damages in 2010.
But the court found US District Judge Phyllis Hamilton in Oakland, California, had erred in concluding that Oracle deserved only $272m of damages, a sum Oracle rejected.
Writing for a three-judge 9th Circuit panel, Judge William Fletcher directed Hamilton to offer Oracle a choice of $356.7m of damages or a second trial.
In a statement, Oracle general counsel Dorian Daley said the company is “thrilled about this landmark recovery.” Asked whether Oracle will accept the $356.7m or proceed to another trial, a company spokeswoman declined to comment. SAP spokesman Andy Kendzie said the ruling is favourable and “shows the strength of our position.”
The case involved SAP’s TomorrowNow unit, which the German company had bought to provide software support to Oracle customers at lower rates than what Oracle charged, hoping to persuade them to become SAP customers.
Oracle sued SAP in 2007 after noticing thousands of suspicious downloads of its software.
SAP later conceded that its employees were illegally downloading Oracle files, but it couldn’t agree with Oracle on damages. The 2010 trial between the two enterprise software competitors was widely watched at the time, as top Oracle executives Larry Ellison and Safra Catz testified.
Subsequently, SAP agreed to pay Oracle $306m, but that agreement allowed Oracle to seek to restore the jury verdict, or win a retrial based on its own damages theories.
During the 2010 trial, Oracle had said internal SAP documents showed the German software company expected over $1 billion in revenue from TomorrowNow. However, the 9th Circuit rejected that reasoning given that SAP had paid much less to buy TomorrowNow.
“If SAP truly anticipated that TomorrowNow would produce a $1.3bn benefit to SAP, as Oracle contends, a $10m acquisition price is strikingly low,” Fletcher wrote. In finding the $272m damages award “below the maximum amount sustainable by the proof,” Fletcher said Hamilton erred in finding that Oracle had lost just $36m of profit.
Reuters
