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May 14, 2014

Oracle demands US court forces SAP pay up over $1bn

Copyright infringement ruling may lead to retrial in row over damages.

By CBR Staff Writer

A US appeals court said the $300m damages awarded to Oracle in its copyright infringement case against SAP is "low" and "wrong".

The 9th US Circuit Court of Appeals in San Francisco said that Oracle may be entitled to get more but indicated that the case may need to be heard in a trial court again.

The seven-year-old case refers to infringement of Oracle’s software by SAP’s now-defunct subsidiary TomorrowNow. TomorrowNow was bought by SAP in 2005. Oracle filed a case against SAP in 2007 saying that its subsidiary unlawfully downloaded the material with the intention to steal Oracle’s customers and make them migrate to SAP. SAP accepted some of the accusations made against it but contested the amount of damages that it should pay.

TomorrowNow staff downloaded manuals and other files from Oracle’s database and promised the US database software giant’s clients to support at a much lower cost than that being charged by Oracle.

In 2010 a court awarded $1.3bn to Oracle in damages; but this was reduced on appeal in 2011 by a California trial court, which put the damages at not more than $272m. That verdict was contested by Oracle in the appeals court. The company’s lawyer Kathleen Sullivan argued this week that SAP was expecting to earn $900m through TomorrowNow’s downloads of Oracle’s files. This justified the damages of $1.3bn, she said.

The three-judge panel asked Oracle for an "objective evidence" of the value of the infringed material.

Oracle argued that the damages should be based on the original value of the downloaded files, if they were lawfully bought by SAP. SAP has argued that Oracle has never sold the material to any user, and it is most unlikely that they are sold to a rival like SAP.

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The appeals court is yet to pass a ruling in the case, Oracle Corp et al. vs. SAP AG et al., 12-16944.

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