Oracle, SAP settle long-standing TomorrowNow lawsuit

SAP will pay Oracle about US$359 million in damages and interest to settle the case

SAP and Oracle have settled a long-standing copyright-infringement lawsuit, with the German company agreeing to pay about US$359 million in damages and interest to Oracle instead of the $1.3 billion awarded in 2010.

Oracle was sued by SAP in 2007 on allegations that its now-defunct subsidiary, TomorrowNow, had illegally downloaded Oracle's software while providing software support services to Oracle customers.

SAP eventually accepted liability for the wrongdoing by TomorrowNow, which led to a trial on damages that resulted in the $1.3 billion award. That decision by a jury in 2010 was overruled by U.S. District Judge Phyllis Hamilton who found that the jury had overreached, and gave Oracle the choice of accepting a smaller award of $272 million or seeking a new trial. An appeals court revised the damages figure to $356.7 million.

"We are thrilled about this landmark recovery and extremely gratified that our efforts to protect innovation and our shareholder's interests are duly rewarded," said Dorian Daley, Oracle's general counsel in an emailed statement. "This sends a strong message to those who would prefer to cheat than compete fairly and legally."

Under the settlement proposed to the court, Oracle will receive $356.7 million in damages and $2.5 million in post-judgment interest, according to a filing Thursday in the U.S. District Court for the Northern District of California, Oakland division. Oracle also gets to keep the $120 million already paid to it by SAP towards lawyers' fees and other costs incurred to prosecute the case.

SAP said it was pleased about the settlement by which Oracle accepted the $356.7 million damages award rather than seek a new trial or appeal. "We are also pleased that, overall, the Courts hearing this case ultimately accepted SAP's arguments to limit Oracle's excessive damages claims and that Oracle has finally chosen to end this matter."

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