Judge Reduces Damages In Oracle Vs. SAP Lawsuit

In a 20-page decision handed down Thursday, U.S. District Judge Phyllis J. Hamilton ruled that Oracle failed to prove its case that it was owed billions of dollars in lost software license fees because of the activities of TomorrowNow, a now-defunct SAP subsidiary.

Hamilton ruled that a new trial could be held on the issue of the actual damages in the case should Oracle reject the $272 million in damages.

SAP issued a statement applauding Hamilton's ruling. "We are very gratified with the court's decision," the company said. "We believed the jury's verdict was wrong and are pleased at the significant reduction in damages. We hope the court's action will help drive this matter to a final resolution. We are hopeful that this ruling will move the case toward an appropriate final resolution."

Oracle also issued a statement vowing to pursue its argument that it is owed more than $272 million. "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 [intellectual property] stolen," the company said. "We believe the jury got it right and we intend to pursue the full measure of damages that we believe are owed to Oracle."

The case reaches back to 2005 when SAP acquired TomorrowNow, which provided support services for Oracle applications. TomorrowNow, which SAP shut down in 2008, downloaded copyrighted software and documents from Oracle support Web sites. Oracle sued in 2007. Before the trial SAP admitted liability in the case, but has argued the damages to Oracle were relatively minor.

In a three-week trial last November in U.S. District Court for Northern California in Oakland, Oracle argued that TomorrowNow's actions had cost it as much as $4 billion in lost software sales, among other damages. On Nov. 23 the jury returned with a verdict that SAP owed Oracle $1.3 billion.

SAP later appealed the judgment, arguing that the damages awarded by the jury were excessive.

Much of the trial focused on the issue of quantifying Oracle's losses, including the hypothetical value of lost software license sales. Hamilton ruled that "the evidence Oracle presented was insufficient to establish an objective, non-speculative license price."

"The court finds that the $1.3 billion verdict is contrary to the weight of the evidence," Hamilton said in her decision, "and was grossly excessive." She ruled that "the maximum amount sustainable by the proof is $272 million."