SAN FRANCISCO – A federal appeals court indicated that the bitter legal tussle between business software maker Oracle Corp. and rival SAP over a jury’s $1.3 billion copyright infringement verdict should head back to a trial court for more litigation
The three-judge panel of the 9th U.S. Circuit Court of Appeals in San Francisco heard oral arguments in the case on Tuesday.
The 7-year-old legal battle revolves around SAP’s $10 million acquisition of a small software services firm TomorrowNow that had promised to help corporate customers and government agencies maintain the applications that they had purchased from Oracle. After SAP took over TomorrowNow in 2005, Oracle uncovered evidence that TomorrowNow was breaking into Oracle’s computers to steal instruction manuals and other technical information about copyrighted software.
Oracle filed a lawsuit in 2007 and trial started three years later. SAP acknowledged much of the misconduct alleged by Oracle, but argued damages weren’t much more than $40 million.
A jury decided otherwise and awarded Oracle $1.3 billion. But a trial judge in 2011 called the verdict in favour of Oracle excessive and reduced it by about $1 billion. Oracle appealed to the 9th Circuit.
On Tuesday, 9th Circuit Judge Susan Graber said the final award “seems low given the evidence.” Graber’s colleague, Judge William Fletcher, also expressed disagreement with damages awarded Oracle. None of the three judges on the panel offered a figure of their own and the case could be sent back to the trial court judge for another trial over damages.
SAP lawyer Greg Lanier argued against reinstating the $1.3 billion or sending the case back to the trial court. Lanier said the U.S. District Judge Phyllis Hamilton was right to reduce the jury’s verdict because jurors were “inflamed by a lot of evidence of theft.” Lanier argues that the jury based its verdict on what SAP would have paid Oracle if SAP properly licensed Oracle’s software. But SAP argues that’s an incorrect way to calculate damages because Oracle would never have licensed its software to a fierce rival like SAP.
Oracle lawyer Kathleen Sullivan argued that her client should be compensated for the “fair-market value” of the software copied and that the jury’s verdict should be reinstated.
SAP lawyers counter that the trial court judge got it right in reducing the verdict, ruling that Oracle would never have licensed its software to a direct competitor.
A written ruling from the appeals court is expected in the coming weeks.