On November 23, 2010 a jury in the US District Court Northern District of California awarded $1.3 billion in damages for software copyright infringement. The awarded damages are said to be the largest in copyright infringement cases ever.

Oracle and SAP are both companies that develop and sell business application software. SAP originally started in Germany and expanded its business all over the world. One of SAP’s U.S. based unit, TomorrowNow, downloaded Oracle’s software and customer manuals and then used this information to offer technical support to Oracle’s customers. By doing so SAP infringed on 120 copyrights owned by Oracle. When Oracle sued SAP for the copyright infringement, SAP did not contest the claim and admitted liability. During the trial it became clear that SAP executives were made aware of the fact that TomorrowNow’s actions constituted an infringement of Oracle’s copyrights on the software. Because SAP admitted liability, the jury's decision would focus on determining the amount of damages SAP would have to pay to Oracle. According to Bloomberg the jury did not base its verdict on the lost profits of Oracle. Instead the jury looked at the fair market value of the license that SAP would have had to pay to Oracle for using the software. Both parties argued during trial what the fair market value for the license ought to be. Oracle argued that $ 2 billion would have been a fair price for the software license while SAP set the price substantially lower, at $ 41 million. The jury eventually determined that $ 1.3 billion was a fair price by taking in to consideration “the scope, duration and timing” of the infringement by TommorowNow.

The amount awarded has been called “pretty dramatic” by Robert P. Merges, a technology law professor at Berkley. In the New York Times he explained that the Oracle v. SAP case is a warning to be more careful about copyright infringement. In a statement given by SAP after the verdict, SAP apologized for the actions of TommorowNow and it announced that is considering a possible appeal. If the verdict is being upheld, it will be among one of the largest amounts awarded in damages in an intellectual property case according to the Wall Street Journal.

The amount of the damages awarded can be found in the case of Oracle Corp v. SAP AG, 07-01658, US District Court Northern District of California (Oakland).

Sources:

http://www.cand.uscourts.gov/CAND/Judges.nsf/b75c9d2875ba29bf88256d480060b70f/e2d2869a39a60704882577e50002cd0a/$FILE/oracle-v-sapag.pdf

http://www.oracle.com/us/corporate/press/189813

http://www.sap.com/usa/about/newsroom/press-releases/press.epx?pressid=14432

http://online.wsj.com/article/SB10001424052748704369304575633150256505376.html?mod=WSJ_Tech_LEADTop

http://www.bloomberg.com/news/2010-11-23/sap-must-pay-oracle-1-3-billion-over-unit-s-downloads.html

http://www.nytimes.com/2010/11/24/business/24oracle.html?_r=1&hp