Pirates of Silicon Valley Oracle awarded 13 billion in damages

Not since Apple Computer, Inc. vs. Microsoft Corporation (1994) have we witnessed such wide implications in intellectual property law. In a resounding verdict that pushed Oracle shares up by 1.5 percent, the jury of the District Court of Oakland, California awarded the Oracle Corporation $1.3 billion (Rs. 5,921 crore) in damages as a result of copyright infringement by German competitor SAP AG reports, AM Law Daily.

Notsince Apple Computer, Inc. vs. Microsoft Corporation (1994) have we witnessed such wide implications in intellectual property law. In a resounding verdict that pushed Oracle shares up by 1.5 percent, the jury of the District Court of Oakland, California awarded the Oracle Corporation $1.3 billion (Rs. 5,921 crore) in damages as a result of copyright infringement by German competitor SAP AG reports, AM Law Daily.

Boies, Schiller & Flexner advised Oracle with founding-Partner David Boies, along with Partner Geoffrey Howard of Bingham McCutchen.

Jones Day represented SAP with a team led by Robert Mittelstaedt.

SAP AG acquired a company called TomorrowNow in 2005, which primarily deals in providing third-party support for enterprise applications. TomorrowNow had systematically for a period of three years downloaded copies of Oracle’s proprietary material and resold them to Oracle customers.

The question with regard to SAP’s liability was not the issue in play at the trial as SAP already admitted liability, but was that how much in damages should be awarded. Oracle’s Lawyer David Boies of Boies, Schiller & Flexner told the jury that they should use the “Fair Market Value” estimate in order to determine the damages and told the jury that even damages worth $3 billion (Rs. 13,653) could be justified.

SAP’s attorney Robert Mittlestaedt from Jones Day claimed that the “Lost Profits” rule should be applied and said, that the maximum damages that could be claimed were only to the tune of $40 million (Rs. 182 crore).

This is one of the few infringement trials amongst Silicon Valley giants that has resulted in a verdict, as most companies prefer to settle out of court,but the animosity between Oracle and SAP may be the reason that Oracle CEO Larry Ellison wanted to pursue this case to its logical conclusion. Even if SAP appeals the verdict, it could mean years more of litigation and bad publicity for the German giant.

The missing star witness in the trial was former SAP CEO and current Hewlett-Packard CEO  Léo Apotheker who was subpoenaed by Oracle but could not attend the trial as he was visiting HP facilities worldwide. Oracle claimed that Aportheker knew of the theft, but was unable to produce enough evidence to show his involvement.

The implications of the trial will be huge and will be a wakeup call for tech majors to start taking infringement seriously. Oracle attorneys called it the largest award of damages for copyright infringement in US history.

Reference: Oracle Corp. vs. SAP AG, 07-01658, U.S. District Court, Northern District of California (Oakland)

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