SAP Told to Pay $345 Million for Infringing Versata Patent

SAP AG (SAP), the world’s largest maker of business-applications software, was told by a jury to pay $345 million for infringing a Versata Software Inc. patent.

The federal jury in Marshall, Texas, said today that closely held Versata was owed compensation for sales of certain SAP enterprise and customer relationship-management software sold prior to May 2010. The jury awarded $260 million for lost profits and $85 million as a reasonable royalty.

The damages are more than the $138.6 million Walldorf, Germany-based SAP was ordered to pay Versata in a 2009 verdict that was thrown out. U.S. Magistrate Judge Charles Everingham had ordered a new trial because of rulings by an appeals court specializing in patent law that set new rules on how financial penalties should be calculated.

Versata will seek an injunction to stop the infringement, Scott Cole, a lawyer with McKool Smith who represented the Austin, Texas-based company, said following the verdict.

“This has been four hard fought years, and the evidence clearly shows that SAP’s use of our intellectual property caused harm,” Cole said. “It was a valuable invention.”

SAP May Appeal

SAP said it’s disappointed with the judgment and is considering whether to appeal.

“We have said all along this is a very complex case,” Andy Kendzie, a company spokesman, said in a telephone interview. “Our attorneys are reviewing today’s filing and we will consider all legal options.”

The patent covers software that can help sales staff determine the most recent price for products and services. SAP told jurors that customers weren’t buying its software for that feature, so any patent royalties should be low.

Versata shouldn’t have been able to claim that it lost profit because the company hadn’t sold any of the software, called Pricer, SAP argued in court papers before the trial. Versata claimed it was undercut by SAP and pushed out of the market.

The original $138.6 million award was based on the entire market value of SAP products, which the company said was unfair. In an Oct. 6, 2009, filing, SAP argued that the largest amount supported by the evidence is $2.03 million.

The case is Versata Software Inc. v. SAP America Inc., 07cv153, U.S. District Court, Eastern District of Texas (Marshall).

To contact the reporter on this story: Bill McQuillen in Washington at bmcquillen@bloomberg.net

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net

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