Judge kneecaps Oracle's $1.3bn triumph over SAP
Industrial espionage award 'grossly excessive'
A federal judge has tossed out a November jury award would have seen SAP pay $1.3 billion to arch-rival Oracle for theft of its intellectual property.
As reported by the AP, Judge Phyllis Hamilton of the US District Court in Oakland, California, called the original award "grossly excessive," and said that the damages should be reduced to $272 million.
If Oracle does not accept this figure, the judge recommends a retrial. And in a statement sent to The Register, Oracle indicated that it's prepared for a retrial.
“There was voluminous evidence regarding the massive scope of the theft, clear involvement of SAP management in the misconduct and the tremendous value of the IP stolen," the statement reads. "We believe the jury got it right and we intend to pursue the full measure of damages that we believe are owed to Oracle."
Oracle sued SAP in 2007, claiming that the German enterprise software giant's TomorrowNow subsidiary illegally downloaded Oracle software and support documents in an effort to pilfer Oracle customers. SAP eventually admitted wrongdoing, and it shut down TomorrowNow.
During closing arguments in an eleven-day trial this past fall, the Larry Ellison Software Machine sought $1.7 billion in damages, while SAP called for an award closer to $400m. The jury settled on $1.3 billion, the largest-ever award in a copyright infringement case.
The trial was, shall we say, enlivened when Larry Ellison announced that Oracle would subpoena ex–SAP CEO Leo Apotheker, who had just been appointed as the new boss at HP. "A few weeks ago, I accused HP's new CEO, Leo Apotheker, of overseeing an industrial espionage scheme centering on the repeated theft of massive amounts of Oracle's software," Ellison said. "HP's Chairman, Ray Lane, immediately came to Mr Apotheker's defense by writing a letter stating, 'Oracle has been litigating this case for years and has never offered any evidence that Mr. Apotheker was involved.'
"Well, that's what we are planning to do during the trial that starts next Monday – unless Mr. Lane and the rest of the HP Board of Directors decide to keep their new CEO far, far away from HP Headquarters until that trial is over."
Oracle did subpoena Apotheker, and apparently, HP did indeed keep him far, far away from HP HQ.
HP appointed Apotheker as its CEO after dumping Ellison's tennis buddy, Mark Hurd. Hurd quickly joined Oracle, and Ellison called the HP board "idiots" for cutting the man loose. He also accused HP chairman Ray Lane of lying about Apotheker's involvement in the TomorrowNow "industrial espionage". ®
This is why we can't have nice things
CEO with egos bigger than Will Smith's dong, playing either revolving door buddies or repeatedly hammering the Nuke Everything Now button through Induhlectual Proberty lawsuits decided by confused juries. A pox on all their houses.
SAP picked a number that they were willing to pay and the judge picked one that he thought it was worth.
Normally I'd agree. All this IP stuff is BS, most of the time. In this case, it's not so obvious:
- a company decides to offer cut-rate maintenance for PeopleSoft (now Oracle) products
- said company downloads PeopleSoft patches under various guises. None of which involve a right to redistribute those patches. But some presumably did include a subscription to products they, or their proxies, had licensed.
- Then it turns around and kindly passes on the patches it had not developed on to its own customers and pockets the money.*
Short of the work being Open Source, which it wasn't, I wonder exactly what gives them the right to do so.
Unlike the BS IP lawsuits, the damages are pretty easy to quantify. 20% license fee maintenance. Which quickly adds up to >$100K/year even for a smallish customer.
Should those maintenance fees be that high? No, they should not. Especially not for the service we get from Oracle on them.
But TomorrowNow, the infringing company, which was bought by SAP, was definitely scamming. Personally, I see a lot more validity in a large award here than the crappy 6.2 B$ Oracle-Google Java stuff or the equally dimwitted Apple-Samsung tablet invention claims.
* BTW, if you savor irony, this model is exactly the Unbreakable Linux leech of Red Hat. Minus the fact that Linux is Open Sourced.