SAP Wins Appeal Invalidating $391 Million Versata Patent

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SAP SE won an appeals court ruling invalidating a patent on customized pricing that was the subject of a $391 million judgment against the business-software maker.

The patent owned by Trilogy Inc.’s Versata Software covers a concept rather than an invention and thus isn’t eligible for legal protection, the U.S. Court of Appeals for the Federal Circuit said in an opinion posted Thursday on its electronic docket.

The appeals court had previously upheld the jury finding that SAP infringed the patent owned by closely held Versata. An agreement, whose terms weren’t disclosed in court filings, was reached in October on the civil suit. Lawyers for SAP are reviewing the opinion and determining the next steps, said Andy Kendzie, a spokesman for SAP.

“We are absolutely delighted with the ruling,” he said. “It shows the strength of our arguments that the patent was invalid.”

Officials with Versata weren’t available to comment.

The procedure to review finance-related business methods -- created at the behest of the financial services industry -- only began in 2012, and SAP was the first to file such a petition. The reviews allow a broader range of invalidity arguments than other agency evaluations of issued patents.

Business Methods

In its lengthy opinion, the three-judge panel upheld the agency’s decision to allow the business-method reviews for anything related to money matters rather than just banking issues, as well as the types of analyses that are allowed.

The dispute is over software that can customize pricing based on factors such as the particular customer, product and size of the order. Versata sold its software, called Pricer, in the late 1990s and claimed SAP introduced a competing product to drive Versata out of the market.

The case is Versata Development Group v. SAP America Inc., 14-1194, U.S. Court of Appeals for the Federal Circuit (Washington). The civil court case is Versata Software Inc. v. SAP America Inc., 07cv153, U.S. District Court, Eastern District of Texas (Marshall).

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