Oracle Loses to SAP in Appeals Court
September 6, 2011 Alex Woodie
Last week a federal judge threw out the $1.3 billion penalty that a jury awarded to Oracle in its TomorrowNow patent infringement case against SAP, and suggested Oracle accept $272 million, or the actual damages that Oracle proved in the case. Oracle says it plans to fight the decision in a bid to uphold the original damages, which means a new trial is likely.
The $1.3 billion verdict against Oracle was “grossly excessive,” U.S. District Judge Phyllis Hamilton wrote in a ruling released last week. Hamilton, who issued a ruling in SAP’s appeal of the case in the U.S. District Court, Northern District of California, said that if Oracle didn’t accept damages of $272 million, she would suggest a new trial.
Judging by Oracle’s response, a new trial is likely. “We believe the jury got it right and we intend to pursue the full measure of damages that we believe are owed to Oracle,” stated Oracle spokesperson Deborah Hellinger. “There was voluminous evidence regarding the massive scope of the theft, clear involvement of SAP management in the misconduct, and the tremendous value of the IP stolen.”
The ruling was the latest twist in a case that has dragged on for more than four years. Oracle filed a lawsuit against SAP and TomorrowNow in March 2007 after SAP bought TomorrowNow, a provider of third-party maintenance and support for PeopleSoft, Siebel, and JD Edwards ERP and CRM suites.
In its case, Oracle claimed that TomorrowNow illegally downloaded millions of files from its Internet support site, which it then used to support and maintain the ERP and CRM systems of 350 customers. The actions violated its intellectual property rights and resulted in $2 billion in damages, Oracle claimed.
SAP admitted in court that TomorrowNow’s actions were wrong, and it subsequently shut down the TomorrowNow operation in 2008. However, Oracle scoffed at the courtroom estimates of SAP’s lawyers that the TomorrowNow activities resulted in damages in the range of $28 million to $41 million. Instead, Oracle claimed its damages could be upwards of $3 billion.
The case went to trial in late 2010, and after a four-week trial, the jury came back with its decision in late November.