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Oracle and SAP say last-minute deal unlikely
- — 14 July, 2011 07:01
The judge overseeing Oracle's corporate-theft lawsuit against SAP will now consider SAP's request for a retrial, after the companies said they are unlikely to reach a mediated settlement in their dispute.
A jury last year ordered SAP to pay Oracle US$1.3 billion in damages after SAP's TomorrowNow subsidiary was caught downloading software and support materials illegally from an Oracle website.
Lawyers for the two sides were back in court Wednesday to argue SAP's motions for a retrial and a reduction in the damages against it. SAP says the damages were out of proportion to the evidence and "a miscarriage of justice."
"It's going to take me some time to determine what I'm going to do," Judge Phyllis Hamilton told the lawyers after two hours of arguments at the U.S. District Court in Oakland, California. In the meantime, she asked if the two sides could settle their differences with a court-appointed mediator.
"My own sense is that it's not likely to be productive in the absence of a ruling one way or the other," said Gregory Lanier, an attorney acting for SAP.
Geoffrey Howard, representing Oracle, said there had been no discussions between the companies since the verdict last November. "I don't think either of us would be particularly optimistic about it," he said.
Howard said the likelihood of a settlement was hurt by comments made by SAP CEO Bill McDermott and co-founder Hasso Plattner at a recent shareholder meeting.
At trial, SAP accepted liability for TomorrowNow's actions and the jury had only to decide the damages.
"Mr. McDermott and Mr. Plattner got up in front of SAP's shareholders and denied any liability and said it was simply a tactic they employed on the advice of their lawyers," Howard said. "So there are some things that are going to complicate any discussion that we would have."
Lanier said he was at the SAP shareholder meeting and "that's not what they said."
Hamilton said she would let them know if she planned to appoint a mediator.
The jury award against SAP was based on a so-called "hypothetical license," or the amount SAP would have paid if it had licensed the stolen software from Oracle legally. Much of Wednesday's argument was about whether that was the correct methodology to apply.
Lanier, for SAP, said a hypothetical license only applies when the two parties would willingly have entered negotiations. In this case, he said, Oracle's own executives testified that they would never have considered licensing the software to SAP.
SAP says the damages should instead be based on the profits Oracle lost from theft, and the profits gained by SAP.
Howard rejected that argument. No courts have ruled that a hypothetical license depends on the willingness of the two sides to negotiate, he said.
SAP also says the damages were arrived at through "speculation." It criticized Oracle's closing arguments, from David Boies, who told the jury the damages should fall somewhere between $1.6 billion and $3 billion.
"That's a pretty broad range," Lanier said. "To tell the jury 'it's somewhere in there' is to invite speculation."
"That just isn't true," said Howard. "In case after case, experts present ranges to the jury. Oracle or any other plaintiff isn't even required to calculate a number, only to give the jury the data it needs to reach a verdict."
Hamilton could take days or weeks to rule on SAP's motions for a new trial and reduced damages. Depending on the outcome, SAP has said it intends to file a full appeal in the case.