$1.33 billion damages award for copyright infringement fails for lack of “real world” comparables


In a high-profile, infringement litigation, a jury awarded the plaintiff (Oracle USA) $1.3 billion in damages against the defendant SAP, the world’s largest business application software manufacturer. Not only was the jury award the largest ever for copyright infringement, but its magnitude nearly exceeded the defendant’s 4Q2010 net income.

On appeal SAP claimed the award was “grossly excessive” and based on “fictitious” evidence. In particular, since Oracle admitted that it never would have licensed the software in the “real world” and no comparable licenses existed, its expert simply “invented” the price of a hypothetical license, the defendant argued, relying on factors such as the amount that Oracle executives claimed they would have charged for a license (unsupported by any benchmark deals), and the value of the infringed technology as a whole, including the costs of acquisition and development.

The U.S. District Court agreed, finding the plaintiff’s expert “confused the jury” by presenting “fictitious and speculative negotiating factors” that he purportedly derived from Georgia-Pacific but which actually came from the “self-serving” testimony by Oracle executives. Look for the complete digest of and court opinion in Oracle USA, Inc. v. SAP AG, 2011 WL 3862074 (N.D. Cal.)(Sept. 1, 2011), at BVLaw.

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