Oracle faces scrutiny over $1.3-bln damages verdict against SAP

By Dan Levine

SAN FRANCISCO (Reuters) - A U.S. appeals court appeared skeptical on Tuesday about reinstating a $1.3-billion-dollar verdict won by Oracle against SAP, in a case where the European software company admitted massive copyright infringement by one of its business units.

A Northern California jury awarded Oracle Corp $1.3 billion in 2010 over accusations that SAP AG subsidiary, TomorrowNow, wrongfully downloaded millions of Oracle files. SAP had acquired TomorrowNow as part of a strategy to provide software support to Oracle customers at lower rates than what Oracle charged, and eventually convince some of those companies to become SAP customers.

The trial between the two enterprise software competitors was widely watched at the time, as top Oracle executives Larry Ellison and Safra Catz testified. However, U.S. District Judge Phyllis Hamilton in Oakland, California slashed the $1.3 billion verdict and ruled that Oracle had proven actual damages of only $272 million.

Oracle has asked the 9th U.S. Circuit Court of Appeals to reverse that ruling.

At a court hearing on Tuesday before a three judge 9th Circuit panel, Oracle attorney Kathleen Sullivan said internal SAP documents showed that SAP had expected about $900 million in new revenue by using TomorrowNow to poach Oracle customers. That, and other evidence, was sufficient for the jury to arrive at its $1.3 billion figure, Sullivan argued.

However, 9th Circuit Judges Susan Graber and William Fletcher said those SAP revenue figures were not objective evidence of the value of the copyrighted material.

"It's hypothetical revenue information, which is not the same," Graber said.

The judges did not issue a formal ruling from the bench.

SAP eventually shuttered TomorrowNow, which pleaded guilty to criminal copyright infringement and other charges.

The case in the 9th Circuit is Oracle Corp et al. vs. SAP AG et al., 12-16944.

(Reporting by Dan Levine; Editing by Bernadette Baum)