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 In the four-year court battle between two technology titans, SAP AG, the world's largest enterprise software provider has been ordered by a US court to pay $1.3 billion to arch rival Oracle Corp for copyright infringement, the largest damages ever awarded for software piracy.
The 11-day trial presided by a eight-member jury, which yesterday awarded the record damages in the high profile case, was closely followed by Silicon Valley.
The award comes as technology and internet giants like Microsoft, Google, Motorola, Nokia, Research In Motion and Apple, among others, are litigating against each other over damages for patent infringement. Oracle sued Weinheim, Germany-based SAP in 2007, claiming that its US-based subsidiary TomorrowNow, now closed, illegally downloaded thousands of copies of Oracle software and manuals and then resold them along with related services to Oracle's own customers, in a bid to woo them away. SAP had acquired Texas-based technology firm TomorrowNow in 2005 for $10 million, before shutting it down in 2008. Oracle had claimed $1.7 billion in damages, in what it said would have been the amount had it to license the software to SAP. Right before the trial began, SAP admitted its guilt and liability and the trial made it clear that SAP's most senior executives were aware of the illegal activity from the very beginning. However, SAP, which had set aside $160 million for the case, argued that it was liable to pay only $28 million to $41 million to Oracle since the software had only been sold to a few hundred Oracle customers. SAP's attorneys argued that the award should be on the basis of the total amount of profits lost by Oracle and gained by SAP from the customers who left Oracle due to the copyright infringement. But the jury thought otherwise, convinced that top executives of SAP were aware of the illegal downloads and sale every step of the way and therefor opted to award closer to what Oracle had asked for. The $1.3-billion award, which is the largest amount ever awarded for copyright infringement, will be close to the SAP's fourth quarter net profit forecast. SAP had revenues of €10.671 billion last year and made a net profit of €1.787 billion. The company is sitting on a cash pile of €2.83 billion as of 30 September 2010. SAP was disappointed with the verdict and said that it could appeal, but indicated its preference to settle the case without further prolonging litigation. ''We are, of course, disappointed by this verdict and will pursue all available options, including post-trial motions and appeal if necessary. This will unfortunately be a prolonged process and we continue to hope that the matter can be resolved appropriately without more years of litigation,'' the company said in a statement. ''The mark of a leading company is the way it handles its mistakes. As stated in court, we regret the actions of TomorrowNow, we have accepted liability, and have been willing to fairly compensate Oracle. Throughout this matter, our customers, employees and partners have stood by us and, for that, we are grateful…… We thank the jury for its diligent service through this lengthy trial and the court for its supervision of this complex case,'' it added.
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