Oracle Corp., the U.S. software maker, lost a bid to reinstate a $1.3 billion damages award against SAP SE for copyright infringement, although it may get another chance for a trial, a federal appeals court said.
The ruling may reopen a dispute that arose seven years ago between Oracle and Walldorf, Germany-based SAP, the biggest maker of business-management software.
Oracle sued SAP in 2007, saying a Texas unit of the German company made hundreds of thousands of illegal downloads and several thousand copies of software that it used to market maintenance services to customers who ran programs from firms that Oracle had taken over.
A jury awarded $1.3 billion in damages based on the value of a hypothetical license that SAP would have negotiated for using Oracle’s copyrighted software. A federal appeals court in San Francisco today said the award was based on speculation and sent the case back to a trial judge with instructions that Oracle be offered a lower damages award or a new trial.
“We are extremely pleased with the court’s decision,” said Andy Kendzie, an SAP spokesman.
Oracle is barred in a new trial from seeking damages based on the value of a hypothetical license, the appeals court said, upholding a ruling of U.S. District Judge Phyllis Hamilton, who presided over an 11-day trial in Oakland, California, in 2010.
Hamilton had held that the $1.3 billion was excessive and reduced the award to $272 million. The appeals court said that was too low and put the damages at $356.7 million, which represents the highest estimate of Oracle’s lost profits and what SAP gained from the infringement.
Jessica Moore, a spokeswoman for Redwood City, California-based Oracle, declined to comment on the ruling.
The case is Oracle Corp. v. SAP AG, 12-16944, U.S. Court of Appeals for the Ninth Circuit (San Francisco).