Oracle Wants $1.3 Billion Award Against SAP Reinstated - InformationWeek

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5/14/2014
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Oracle Wants $1.3 Billion Award Against SAP Reinstated

Oracle argues mega-judgment against SAP was appropriate in seven-year-old TomorrowNow theft case.

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Oracle made its case on Tuesday to the Ninth Circuit Court of Appeals in San Francisco that a $1.3 billion jury award against SAP should be reinstated, but the three-judge panel hearing the appeal seemed to cast some doubt on its reasoning.

The award in question was tied to the 2007 copyright infringement case between Oracle and SAP and its TomorrowNow services unit. Even before that trial began, SAP admitted that TomorrowNow, which it acquired in 2005, had illegally downloaded Oracle support documentation. SAP closed the unit down and offered to settle out of court, but Oracle insisted on a trial.

[Want more background on this case? Read Oracle Appeals SAP Case, Seeks $1.3 Billion Jury Award.]

After embarrassing SAP in court, Oracle won the case in 2010. But in September 2011, Judge Phyllis Hamilton, of the US District Court for Northern California, threw out the $1.3 billion award, calling it "contrary to the weight of the evidence and grossly excessive."

Oracle attorneys argued Tuesday that the jury award was appropriate because SAP at one point projected it would reap as much as $900 million in revenue from TomorrowNow. One of the three panelists, Judge Susan Garber, questioned Oracle's reasoning, saying "revenue information... is not the same" as the value of the documents stolen from Oracle in the copyright infringement case. "My concern is that it's evidence of something else," she said. Another panelist, Judge William Fletcher, said projected revenues could be nothing more than "pie-in-the-sky dreaming."

Oracle CEO Larry Ellison, one of several witnesses who testified in the original court case against SAP.
Oracle CEO Larry Ellison, one of several witnesses who testified in the original court case against SAP.

The panel did not say when it might reach a decision, but if Oracle wins, SAP could end up owing as much as $1 billion over and above a "stipulated agreement" it reached with Oracle in August 2012 in which it agreed to pay $306 million. Another possibility is that court will order a new trial, in which case the nearly seven-year-old legal battle will drag on.

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Doug Henschen is Executive Editor of InformationWeek, where he covers the intersection of enterprise applications with information management, business intelligence, big data and analytics. He previously served as editor in chief of Intelligent Enterprise, editor in chief of ... View Full Bio

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D. Henschen
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D. Henschen,
User Rank: Author
5/16/2014 | 2:49:50 PM
Re: How to embarrass the competition
I wouldn't say SAP is "back on its heels" on this any more than Google is in its ongoing suit with Oracle. It's just an expensive nuisance. Oracle has to defend its IP, but it could have settled out of court on both counts and poured the settlement money earned and lawyer money not spent into new-product (and new-cloud) development. Customers and our court systems would be much better served with reasonableness.
Charlie Babcock
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Charlie Babcock,
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5/14/2014 | 2:25:36 PM
How to embarrass the competition
By keeping the case in the courts, Oracle gets to keep its chief applications competitor, SAP, rocked back on its heels. But a mitigating fact, perhaps, is that TomorrowNow did what it did in an easily detectable fashion. It was wrong in the eyes of the law. It had taken a convenient route of rationalizing that it was standing in for the customer and had the same rights as a customer, when it was in fact a support competitor with Oracle. The court will punish such behavior but not in the same way it would discipline lying, coverup and outright theft. The fact that Oracle was aware of the downloads and allowed them to continue, building both its incident count and grievance, may also have been noted by the court.
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