SAP fined $1.3B in Oracle copyright infringement case

Ex-subsidiary TomorrowNow's theft from Oracle; Larry Ellison wanted blood and he got it: trial jury awards double SAP's last quarter profits.

Larry Ellison (Oracle)
By Richi Jennings. November 24, 2010.

A jury has fined SAP $1.3 billion in a copyright infringement case brought by Oracle. The court ruled that TomorrowNow, an SAP subsidiary, stole Oracle software and customers. In IT Blogwatch, bloggers run the numbers.

Your humble blogwatcher curated these bloggy bits for your entertainment. Not to mention Real-time body distortion, made with Cinder and Kinect...


James Niccolai reports:

The award is a blow to the German applications vendor, which had argued it should pay just $40 million for the software stolen by its TomorrowNow subsidiary. ... It was not the full amount Oracle had asked for ... Oracle CEO Larry Ellison testified ... SAP should have to pay ... $4 billion.


The verdict follows a three-week trial. ... The jury took less than a full day of deliberations to reach its decision. ... The amount awarded was closer to the sum suggested by Oracle's damages expert, who put the figure at $1.7 billion. ... SAP said that it would "pursue all its options" to have the verdict changed.

Karen Gullo adds:

Oracle sued SAP in 2007 claiming [TomorrowNow] made hundreds of thousands of illegal downloads and several thousand copies of Oracle’s software. ... The verdict ... is the biggest ever for copyright infringement ... the largest U.S. jury award of 2010 ... the 23rd-biggest jury award of all time.


The panel decided on an award that represented the fair market value of the license SAP should have negotiated with Oracle. ... Shares of SAP today dropped as much as 1.6 percent ... in Frankfurt trading. Oracle yesterday gained ... 1.9 percent ... in extended U.S. trading after the verdict.

  John Paczkowski pokes fun:

SAP, which believed that the damages amounted to about $28 million, had argued that Oracle was looking for an undeserved bonanza out of the jury.


The damage award is “a drop in the bucket” to Oracle, but a stern warning to the industry.

 But Matt Rosoff calls the Street's reaction "absurd":

Is SAP really going to pay Oracle an amount equal to double its last quarterly earnings?


Maybe never. ... A lot of those verdicts are later reversed or the fines reduced, or the companies end up reaching a separate settlement out of court.


It's absurd that Oracle's stock rose, and SAP's fell, after hours on this news. Today's award is the beginning, not the end. ... SAP certainly isn't expecting to pay $1.3 billion: the company has put aside only $160 million.

  And Dennis Howlett is sure "Oracle will milk this for all its worth":

Either the jury ... wanted to get home early for Thanksgiving or Oracle’s lawyers and witnesses dazzled them into believing that Oracle is entitled to ... an order of magnitude higher than any previous award.


If the jury had looked at lost profits then it is difficult to conceive how they could have awarded anything approaching this amount. ... One wonders how they managed to compute such a figure given the number of customers TomorrowNow actually secured.

  Meanwhile, Nick Farrell quips, "Just as well they weren't music files":

SAP is fairly upset that no one took any notice of the steps it took after the theft was made public. This included accepting liability, and it had been willing to fairly compensate Oracle.


SAP should be grateful that they were not music files. Going by the standard rate of what juries are ordering file sharers to pay, it would have been billed several trillion dollars.


And Finally...

Real-time body distortion, made with Cinder and Kinect

More info. at Robert Hodgin's blog

[hat tip: Greg Borenstein, via Andy Baio]

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Richi Jennings, your humble blogwatcher
  Richi Jennings is an independent analyst/consultant, specializing in blogging, email, and security. A cross-functional IT geek since 1985, you can follow him as @richi on Twitter, pretend to be richij's friend on Facebook, or just use good old email:

You can also read Richi's full profile and disclosure of his industry affiliations.

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