Oracle rejects $272 mln damage award from SAP, wants new trial

Larry Ellison (photo: Oracle Corporate Communications)

Database giant Oracle has rejected a court-ordered award of $272 million in damages from rival database vendor SAP, saying it would rather face another trial. The choice stretches out a dispute between the two companies that stretches all the way back to 2007—and could potentially be worth over a billion dollars to Oracle, if it’s proven right.

Back in 2010, a jury awarded Oracle a stunning $1.3 billion in damages in its suit against SAP. The complaint stems from actions of now-closed SAP subsidiary TomorrowNow, which in 2007 logged into protected Oracle customer support services (using fraudulent credentials, in many cases) and downloaded sizable amounts of Oracle software and support documents. TomorrowNow then used to attempt to persuade potential Oracle customers to go with SAP solutions rather than Oracle.

SAP owned up to the malfeasance—and shut down TomorrowNow with a resounding slam—but claimed that any damages it owed Oracle over the matter should be calculated from losses incurred by Oracle over lost business and any profit SAP made as a result of its actions. Oracle disagreed, saying it was due damages equivalent to the software licenses SAP would have had to have bought to use the software it had stolen.

The initial ruling of $1.3 billion in damages came closest to Oracle’s interpretation of what it was due, and SAP immediately appealed the decision. In September, Judge Phyllis Hamilton in the U.S. District Court in Oakland scaled back the damage award to $272 million, characterizing the $1.3 billion award as “grossly excessive.” Judge Hamilton noted there was no way Oracle would have granted SAP licenses to its software in order to help it poach Oracle customers, making the $1.3 billion award largely speculative.

Oracle, however, believes the law is on its side, and they would rather move ahead with a new trial than accept the $272 million. Oracle isn’t risking that SAP will be found innocent of infringement in a second trial—SAP basically threw itself on the mercy of the court last time around—but it hopes for an interpretation of the law that would see it awarded the full $1.3 billion. And maybe then some, with interest.