Oracle faces scrutiny over $1.3 billion verdict against SAP

By Dan Levine

SAN FRANCISCO (Reuters) - A U.S. appeals court appeared skeptical on Tuesday about reinstating a $1.3 billion jury verdict won by Oracle Corp against SAP, in a case where the European software company admitted massive copyright infringement.

At a court hearing on Tuesday, two 9th U.S. Circuit Court of Appeals judges also suggested Oracle may deserve more than the roughly $300 million it had been assigned by a lower court.

A Northern California jury awarded Oracle $1.3 billion in 2010 over accusations that SAP AG subsidiary, TomorrowNow, wrongfully downloaded millions of Oracle files. SAP had acquired TomorrowNow as part of a strategy to provide software support to Oracle customers at lower rates than what Oracle charged, and eventually convince some of those companies to become SAP customers.

The trial between the two enterprise software competitors was widely watched at the time, as top Oracle executives Larry Ellison and Safra Catz testified. However, U.S. District Judge Phyllis Hamilton in Oakland, California ruled that Oracle had proven actual damages of only $272 million.

Oracle has asked the 9th U.S. Circuit Court of Appeals to reverse that ruling.

At a court hearing on Tuesday before a three-judge 9th Circuit panel, Oracle attorney Kathleen Sullivan said internal SAP documents showed SAP had expected about $900 million in new revenue by using TomorrowNow to poach Oracle customers. That, and other evidence, was sufficient for the jury to arrive at its $1.3 billion figure, Sullivan argued.

However, 9th Circuit Judge Susan Graber questioned whether those SAP revenue figures were objective evidence of the value of the copyrighted material.

"It's hypothetical revenue information, which is not the same," Graber said.

"These may be pie in the sky dreaming," Judge William Fletcher added.

The judges did not issue a formal ruling from the bench. SAP eventually shuttered TomorrowNow, which pleaded guilty to criminal copyright infringement and other charges.

SAP admitted liability for the downloads just prior to the 2010 trial, so the only issue in dispute was how much SAP would pay Oracle in damages. Oracle said that figure should be calculated based on what SAP would have paid Oracle had it licensed the materials, instead of downloading them without permission. Oracle estimated that amount in the billions.

In her lower court ruling, however, Hamilton decided Oracle is only entitled to profits it had lost as a result of the downloads, as well as any profits SAP gained. The judge calculated that amount at $272 million.

At the 9th Circuit hearing on Tuesday, Graber said $272 million "seems low," and Fletcher said it "seems to me wrong."

SAP attorney Tharan "Greg" Lanier defended the amount, though he acknowledged that Oracle presented evidence at trial that the profits calculation could come to $487 million.

The case in the 9th Circuit is Oracle Corp et al. vs. SAP AG et al., 12-16944.

(Reporting by Dan Levine; Editing by Bernadette Baum and Richard Chang)


Get stories like this on the Yahoo app and discover more every day.
Download it now.


  • IIM Ahmedabad is the best B-school in 2015

    The 54-year-old institute is not only drawing on its traditional strengths, but is also taking wings to meet the demands of the emerging new world of business. …

  • Change is only constant at these four B-schools

    It is the best of times for B-school students. And if they happen to be at the top four schools after IIM-Ahmedabad - IIM Calcutta, XLRI, SP Jain Institute of Management & Research and MDI- it is certainly ... …

  • India's best management schools for 2015

    The eagerly-awaited issue of Business Today is here. Find out which B-school has topped the list this time. …

  • Built To Last

    Six lesser-known infrastructure companies have prospered despite adverse economic circumstances. …

  • Sweeten your e-Deals

    Shopping online this festive season can be fun if you read the fine print carefully. …

  • Exercise Caution

    The IPO market is buoyant with a healthy line-up of issues, but investors should be cautious. …

  • No Headline

    Six lesser-known infrastructure companies have prospered despite adverse economic circumstances. …


  • Most Actives
    Most Actives
    NamePriceChange% Chg
  • Price % Gainers
    Price % Gainers
    NamePriceChange% Chg
  • Price % Losers
    Price % Losers
    NamePriceChange% Chg
    Recent Quotes
    Symbol Price Change % ChgChart 
    Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
    You need to enable your browser cookies to view your most recent quotes.
  • Recent Quotes News

      Sign-in to view quotes in your portfolios.