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Oracle-SAP case goes to jury to decide damages
- — 23 November, 2010 11:58
SAP has admitted to the "massive and prolonged" infringement of Oracle's copyrights and should pay at least US$1.7 billion in damages, an Oracle attorney said Monday as the companies' corporate theft lawsuit entered its final stages.
Lawyers for Oracle and SAP made their closing arguments Monday morning at the U.S. District Court in Oakland, California. The case was then sent to the eight-person jury for deliberation, and a verdict seems likely before the U.S. Thanksgiving holiday on Thursday.
SAP has admitted that its now-closed TomorrowNow subsidiary illegally downloaded massive amounts of software and support materials from an Oracle website. The trial is to determine how much SAP must pay Oracle in damages.
Oracle says the sum should reflect the value of the software to SAP at the time it acquired TomorrowNow in 2005. "However you do the calculations, it's clear there were billions of dollars at stake here for SAP," David Boies, an attorney for Oracle, told the jury in his closing remarks.
Oracle says SAP planned to use the stolen software, which included support materials for Oracle's PeopleSoft and JD Edwards applications, to try to convert Oracle customers over to SAP applications.
"They were sucking out the software so hard, so fast and so extensively that they actually crashed Oracle's servers," Boies said, citing evidence presented earlier at trial.
The scope of the theft, and the value of the software to SAP, justifies an award of more than $1 billion in damages, he argued.
Attorney Bob Mittelstaedt, in his closing argument for SAP, shot back that Oracle was trying to trick the jury with phoney math.
"They're asking for far more than they're entitled to, and they're trying to trick you in order to get it," he told the jury.
SAP should have to pay no more than about $40 million in damages, Mittelstaedt said.
The great disparity between the companies' estimates reflects the different methods presented at trial to calculate the damages, and the jury will have to pick an amount based on whichever one it thinks is fair.
Oracle says SAP should be forced to pay the value of a "hypothetical license" -- or whatever it would have paid Oracle if the two companies had negotiated a license for the software stolen by TomorrowNow.
SAP says applying a hypothetical license in this case doesn't make sense. It thinks it should pay Oracle only for the profits that Oracle lost and that SAP gained as a direct result of the theft.
Since TomorrowNow allowed SAP to convert only a handful of Oracle customers to SAP applications, the actual damages should be in the tens of millions of dollars, Mittelstaedt said.
Boies argued that it doesn't matter how successful SAP was in making use of the stolen software. "Defendants can't say they should not have to pay the full cost of the license because they were not as successful as they expected," he told the jury.
The trial has lasted three weeks and has seen a string of powerful industry executives take the stand, including Oracle CEO Larry Ellison, co-President Safra Catz and former co-President Charles Phillips, as well as SAP co-CEO Bill McDermott.
The case is unlikely to have a direct impact on current customers of either company. However, observers say it could harm the market for third-party support services -- the type of business TomorrowNow was in -- because it raises the specter of legal challenges to other companies that might enter the same area.