Business News · Legal News

Oracle’s $1.3 Billion Infringement Bid Rejected

German-based business software company SAP has won a reversal of a $1.3 billion copyright infringement ruling that Oracle received in a November 2010 trial.

US District Judge of California Phyllis Hamilton granted SAP’s motion to throw out the award, finding it “grossly excessive” and reduced it to $272 million.

She ruled if Oracle was to reject her ruling to lower the award then SAP would deserve a new trial on damages.

The $1.3 billion award was the highest ever for copyright infringement damages. Oracle sued SAP’s TomorrowNow software-maintenance arm of the business, claiming it made profits from illegal downloads of copies of Oracle’s software. It alleged that SAP infringed to avoid paying licensing fees and to steal customers.

Jurors based their award on the value of a hypothetical licence that SAP would have needed to use Oracle’s software.

Oracle president Safra Catz said,

“For more than three years, SAP stole thousands of copies of Oracle software and then resold that software and related services to Oracle’s own customers. Right before the trial began, SAP admitted its guilt and liability; then the trial made it clear that SAP’s most senior executives were aware of the illegal activity from the very beginning.”

In pre-trial pleadings, Oracle said that it was seeking actual damages to the amount of $2.15 billion as the fair market value of the licences for the infringed products.  SAP argued that the appropriate damages owed to its rival were less than $40 million.

Judge Hamilton said there was no evidence that Oracle had ever granted a licence that would permit a competitor to use its software to compete for Oracle customers.

Oracle is unable to recover lost licence fees because, without such evidence, any award would be speculative and not based on objective evidence.

“Oracle’s suggestion, that upon proof of infringement, copyright plaintiffs are automatically entitled to seek ‘hypothetical’ licence damages because they are presumed to have suffered harm in the form of lost licence fees, has no support in the law,” she ruled.

SAP spokesman Jim Dever said, “We are very gratified with the court’s decision.”

Oracle has until 30 September to say if they will accept the decision.


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