Oracle Owed Interest by SAP in Infringement Case, Judge Rules

Oracle Corp. must be paid interest on the $1.3 billion copyright-infringement jury verdict it won against SAP AG last month, a federal judge said.

SAP, based in Walldorf, Germany, said the interest amounts to about $16.5 million based on the calculation method ordered yesterday by U.S. District Judge Phyllis J. Hamilton in Oakland, California, who presided over the trial of the 2007 lawsuit.

Oracle, based in Redwood City, California, and the second- largest maker of business application software behind SAP, claimed it is owed $211.7 million in interest on the verdict, an amount dating back to 2005 and 2006 when, Oracle claims, SAP should have negotiated a license for the software copyrights that were infringed. SAP argued it shouldn’t have to pay the interest.

Hamilton didn’t specify an amount in her order. Instead, she outlined a method of calculating the prejudgment interest award based on a weekly average yield determined by the U.S. Treasury.

“The court does not find that the rate should be calculated separately for each year back to the date of the hypothetical license negotiation,” Hamilton wrote. She ruled the interest should accrue from the date of a “hypothetical” date of a license negotiation with Siebel Systems Inc.

The $1.3 billion in damages awarded Nov. 23 for copyright infringement by a now defunct SAP software maintenance unit called TomorrowNow is the largest U.S. jury award of 2010, according to Bloomberg data.

‘Proper Calculation’

“While we believe that Oracle should only be awarded damages, we appreciate that the Court agreed with SAP on the proper calculation of interest in this case which dramatically lowered the amount,” Saswato Das, a spokesman for SAP, said in an e-mail. “The interest the Court ordered, based on the statutorily-set interest rate of .3 percent and the accrual period of September 29, 2006, through December 23, 2010, is approximately 16.5 million, rather than the over 200 million Oracle was seeking.”

Deborah Hellinger, an Oracle spokeswoman, didn’t respond to a request for comment after regular business hours yesterday.

The case is Oracle Corp. v. SAP AG, 07-01658, U.S. District Court, Northern District of California (Oakland).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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