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SAP loses appeal in long-running $345m patent case

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A US federal court has rejected German software maker SAP's bid to overturn a $345m judgment against it, in a move that could finally end a patent-infringement lawsuit that has already dragged on for nearly six years.

Versata, a maker of business rules engine software, first brought suit against SAP in 2007 over allegations that the German firm had developed a software module that was deliberately designed to reproduce Versata's patented technology.

The module in question was a rules engine that helped companies price their products and services based on a variety of factors, such as customer type, customer size, and geography. Previously, Versata had marketed just such an engine as an add-on for SAP, called Pricer.

In its lawsuit, Versata alleged that SAP had developed a work-alike product specifically to discourage customers from using third-party add-ons such as Pricer – and that it had done so by infringing on Versata's patents.

In 2009, a jury for the Federal District Court in the Eastern District of Texas sided with Versata, awarding the company $139m in damages (which was actually $39m more than it had asked for).

But it didn't end there. SAP successfully petitioned the court to toss out that judgment and hold a second trial to determine a new figure for damages, based on a change in governing law.

Unfortunately for SAP, however, that second jury looked even less favorably on the matter. This time, Versata was awarded $260m in damages for lost profits, plus another $85m in royalty payments for the patents that SAP's software infringed.

What's more, the court in the second trial granted Versata a permanent injunction against SAP, banning the German company from selling its infringing software, and even forbidding it from collecting maintenance fees from existing customers.

Naturally, SAP appealed the ruling, which brings us to today.

On Wednesday, Chief Judge Randall Rader of the Federal Circuit Appeals Court issued a judgment upholding the jury's infringement verdict in the second trial and affirming its damages award.

There was some good news for SAP, however; Rader lifted the permanent injunction preventing SAP from selling its version of the pricing engine, on the grounds that the wording of the order was overly broad. That matter will now go to a lower court to determine whether a narrower injunction should be applied.

As to damages, on the other hand, it looks like SAP is out of luck and will soon have to reach into its pockets.

"This court has considered the remainder of SAP's arguments and finds no reversible error," Judge Rader's ruling states.

When asked for comment, SAP wouldn't say much, beyond that it was reviewing the court's ruling.

"We are pleased the court found the injunction was overbroad and remanded it to the lower court for modification," SAP spokesman Andy Kendzie said in a statement. "Until we have had a chance to review this ruling in detail, we will not comment further." ®

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