Oracle, SAP Still Going At It Over TomorrowNow

February 28, 2011 Timothy Prickett Morgan

Will this lawsuit between Oracle and SAP concerning the long-defunct TomorrowNow third-party software support business ever end? It sure doesn’t look like it.

Last week, after mulling over Oracle’s $1.3 billion jury award from last November for a few months, SAP’s lawyers came back and filed motions with the United States District Court for the Northern District of California in Oakland suggesting to Judge Phyllis Hamilton that the jury award was way out of whack with the reality of the damage caused by TomorrowNow.

Back in March 2007, you will recall, after SAP had acquired TomorrowNow to offer third-party support for JDE, PeopleSoft, and Siebel Systems applications then owned by Oracle, the database and application giant sued SAP for billions in dollars of damages alleging that TomorrowNow was taking Oracle documentation and patches to do offer support to customers. TomorrowNow had 358 customers, and SAP has argued that the damages to Oracle were on the order of $28 million to $41 million. SAP has not contested the claims made by Oracle over how TomorrowNow operated, and agreed to pay legal fees before the trial started last October. But in its filings last week, it once again said that the actual damage to Oracle was a mere $28 million.

“The jury’s award of hypothetical license damages totaling $1.3 billion was contrary to the weight of the evidence and grossly excessive,” SAP’s lawyers argued in their brief. “The verdict was based on Oracle’s legally improper hypothetical license theory and the unduly speculative evidence Oracle offered in support, rather than on evidence of defendants’ actual use of the copyrighted works and the objectively verifiable number of customers lost as a result. Oracle presented irrelevant evidence of purported value of intellectual property as a whole, elicited self-serving testimony of its executives regarding the price they might have demanded in an admittedly fictional negotiation, and tendered the wholly speculative opinion of its damages expert, which was based on little more than guesses about the parties’ purported expectations based on documents that evinced only one party’s subjective hopes, goals, and assumptions. At the same time, Oracle urged the jury to disregard evidence of Oracle’s actual customer losses resulting from infringement. Consequently, the verdict grossly exceeded the actual harm to Oracle in the form of lost customers, which was quantified by both sides’ experts (at $28 million by SAP’s expert and at $408.7 million by Oracle’s expert). Oracle’s daily presentation of prejudicial liability evidence, irrelevant to calculating damages, further distracted and inflamed the jury.”

That sounds about right to me, but I ain’t no lawyer. And it seems likely that SAP will get its motion for a new trial upheld. The next round of hearings in the case will begin on July 13.

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