|By Maureen O'Gara||
|November 24, 2010 07:00 AM EST||
A federal jury of eight men and women decided late today that SAP should pay Oracle $1.3 billion for ripping off its software. The jury only got the case Monday.
SAP, which hoped to get away with paying no more than $40 million for its admitted transgressions, indicated it will probably appeal.
It said in a statement:
“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.”
Oracle sued in 2007.
A wishful-thinking SAP’s only reserved $160 million to cover the case and part of that is the $120 million it agreed to pay Oracle’s lawyers. The AP, which calls the decision “devastating” for SAP, observes that SAP’s entire after-tax profit last year was just over $2 billion. It has $3.86 billion in the bank.
Bloomberg, which keeps track of such things, says the $1.3 billion award is historic for a copyright infringement case and the 23rd largest of all time ever in any case. It comes close to the $1.6 billion Oracle’s expert determined was fair.
Oracle argued that SAP should pay for the 5TB of Oracle software, fixes, updates and documentation that its now-defunct third-party maintenance arm TomorrowNow pilfered.
Oracle CEO Larry Ellison put the hypothetical licensing figure at $4 billion, which is more than SAP has in the bank. Ex-Oracle co-president Chuck Phillips put the figure at $5 billion. Oracle’s high-profile lawyer David Boies Monday asked for somewhere between $288 million and $3 billion.
Calling Oracle’s demands “overreaching” and “guesswork,” SAP told the jury the number should be more like $28 million based on the actual profits it calculated Oracle lost plus the profits SAP made, but in any case no more than $40 million.
In his closing statement, SAP’s lawyer warned the jury that “They’re asking for far more than they’re entitled to, and they’re trying to trick you in order to get it.”
SAP’s profit calculations were made by an expert witness it hired who claimed to tease out only what SAP made off the infringement. SAP actually picked up about $700 million from Oracle customers that it claimed Oracle would have lost anyway.
Oracle argued that just because SAP wasn’t as successful as it hoped doesn’t mean SAP shouldn’t have to pay the cost of a license for the software TomorrowNow stole. “When they take it, they own it, and they have to pay for it,” Boies reportedly said, “regardless of whether they did well or didn’t do well.”
The size of the award reflects badly on HP’s new CEO Léo Apotheker, who Oracle maintained was up to his neck in the scheme to rustle Oracle’s customers. He was SAP’s sales chief when the TomorrowNow caper began, responsible for its migration program, and later its CEO.
Oracle claimed that he and SAP’s board knew all about TomorrowNow’s illegal downloads and expected to make billions off of them by moving Oracle’s PeopleSoft, JD Edwards and Siebel customers to SAP software.
The three-week trial ended without Oracle getting Apotheker on the stand to testify or without playing his two-year-old videotaped deposition for the jury. Oracle wasn’t able to serve a subpoena on the elusive Belgian, who only appeared at HP headquarters Monday for the company’s stronger-than- expected earnings call after the case went to the jury.
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