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SAP Agrees to Pay Oracle $306 Million for Copyright Breach

Friday, 03 August 2012 07:17 AM

SAP AG will pay at least $306 million to Oracle Corp. in a copyright-infringement lawsuit over an SAP unit’s downloading and copying of Oracle software.

Oracle, the world’s largest maker of database software, won a $1.3 billion jury verdict in the case in 2010. A federal judge reduced the award to $272 million. Oracle opted instead for a new trial, which was scheduled for Aug. 27.

The companies agreed on a judgment for $306 million in damages “to save time and expense of this new trial,” lawyers for Oracle and SAP said in a filing in federal court in Oakland. The accord requires approval from U.S. District Judge Phyllis Hamilton.

Oracle, based in Redwood City, California, will also ask a federal appeals court in San Francisco to reinstate the jury verdict, the company said in an e-mail. SAP doesn’t have to pay the damages until after all appeals or new trials in the case have concluded, according to court filings. If Oracle wins a judgment that’s less than $306 million in any subsequent ruling or trial, SAP agreed to pay the difference.

“The conduct that led to this lawsuit and jury award is truly unprecedented,” Oracle attorney Geoff Howard said Thursday in an e-mail.

SAP, the biggest maker of business-management software, was sued by Oracle, its biggest competitor, after the discovery that an SAP software maintenance unit had downloaded and copied Oracle software. Oracle said SAP’s aim was to avoid paying licensing fees and to steal customers.

TomorrowNow Unit

SAP, based in Walldorf, Germany, didn’t contest that it was liable for the infringement by its TomorrowNow unit, which it closed in 2008.

“SAP believes this case has gone on long enough,” Jim Dever, an SAP spokesman, said by e-mail. “Although we believe that $306 million is more than the appropriate damages amount, we agreed to this in an effort to bring this case to a reasonable resolution.”

SAP already has paid Oracle $120 million for its legal fees in the case. The company has set aside 227 million euros ($277 million) relating to the litigation, according to its balance sheet as of June 30. The difference between the provisions and the actual payments to be made will probably reduce third- quarter net income under International Financial Reporting Standards, spokesman Christoph Liedtke said by phone. It won’t affect measures the company uses for its full-year forecast, he added.

The case is Oracle v. SAP, 07-1658, U.S. District Court, Northern District of California (Oakland).

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Friday, 03 August 2012 07:17 AM
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