Oracle has argued its record-breaking damages award against SAP should be reinstated, or a retrial ordered
Oracle on Tuesday argued before a US appeals court that judges should reinstate a $1.3 billion (£819m) jury award against rival SAP, the largest copyright infringement penalty in history, which a District Court ruling reduced to a piffling $272 million two years ago.
The whopping penalty, which the District Court ruling had judged “grossly excessive”, was originally awarded for what an Oracle lawyer called “the most massive and brazen copyright infringement in history”.
The seven-year-old dispute centres on TomorrowNow, a Texas-based company that had offered technical support and software fixes to customers of companies Oracle acquired, including PeopleSoft. TomorrowNow, which was acquired by SAP and which is now long defunct, was caught downloading large amounts of software and support materials – about 5 terabytes – from an Oracle-PeopleSoft website.
SAP has not contested the infringement, and has in fact agreed to pay Oracle at least $306m in the case, regardless of its outcome; it has already paid Oracle $120m in attorneys’ fees. The case has, therefore, centred on how much SAP should pay in damages.
One usual way of determining such damages is to estimate the amount of a “hypothetical licence” that the infringing party would have paid: but where the case breaks new ground is that Oracle has, in fact, never licensed this particular set of software and support materials, making it complex to determine the cost of such a licence.
The estimates are, therefore, widely varied, with the jury award of $1.3bn based on figures such as how much revenue SAP expected to generate from its purchase of TomorrowNow. The District Court judge reduced that figure to $272m arguing that the revenue projections were theoretical.
On Tuesday, attorneys representing SAP and Oracle presented their arguments before a three-judge panel at the Ninth Circuit Court of Appeals in San Francisco, with Oracle asking judges either to reinstate the higher ruling, or to send the case back for a retrial.
‘Pie in the sky’
Judges showed scepticism that Oracle could present data solid enough for an accurate fee to be calculated, with US Circuit Judge William Fletcher calling both companies’ estimates “pie in the sky dreaming”.
“There are a lot of variables in there that make it somewhat speculative,” he said, according to a Bloomberg report.
Oracle, however, said it should be given the opportunity to make its case.
For SAP’s part, the company said the damages should be calculated based upon the revenues Oracle lost due to the infringement, added to those SAP gained by it. Oracle estimated the number of clients poached by TomorrowNow as a result of the infringement in the thousands, while SAP said they may have been in the dozens.
The panel didn’t indicate when it may rule.
Oracle is currently involved in another case breaking legal ground, in a case pitting it against Google and involving the copyright on Java programming interfaces. This week a US appeals court ruled that Oracle’s Java application programming interfaces (APIs) can be protected by US copyright law.
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