SAP has been ordered to pay $1.3 billion to Oracle – the largest fine ever levied for a copyright infringement case.
According to Bloomberg, in 2002, the Recording Industry Association of America was awarded $136 million in a case that involved copying and distributing 1,500 songs by artists including Elvis Presley, Madonna and James Brown. Bloomberg also reports the Oracle verdict is the largest jury award this year and the 23rd largest of all time.
The Oracle case has nothing to do with music. Instead, this case is about SAP stealing intellectual property to provide low cost support for Oracle customers. In turn, the hope was was to lure these Oracle customers over to SAP.
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In the case, Oracle sued SAP for illegal downloads and copying thousands of copies of Oracle’s software. The case centered around SAP’s TomorrowNow unit, which the German software giant acquired in 2005 and closed in 2008.
The jury ruled that the intent was to avoid paying licensing fees for the Oracle software.
SAP has earlier admitted its guilt but claimed it only should pay $40 million.
So why such a large fine? It appears that it was the scale of the operation that convinced the jury to award such a sum of money.
It may also be due to the absence of Leo Apotheker, the former SAP CEO, who is now CEO of Hewlett-Packard. Apotheker avoided getting served by Oracle who wanted him to testify about what he knew of the downloads. His absence could not have been looked on sympathetically by the jury.
Or maybe the jury liked what they heard from Oracle Co-President Safra Catz in her testimony. She said SAP should pay $1.6 billion in damages. She thought the SAP offer of $40 million did not all take into account the magnitude of the theft.
According to All Things D, Catz testified:
“You know if Warner Brothers had a little subsidiary that copied Disney’s entire library and started selling it for $2 a copy, and they got caught and then offered to give Disney back half of what they made, is Disney’s library only worth $50?,” she asked. “I mean, really. It’s valuable. The fact that it was copied doesn’t change that it’s valuable.”
The defense scoffed at her “colorful analogy,” but that may have sealed it for the jury. Catz put Oracle’s position out there in terms a jury could understand.
That may have been just enough for the jury to come back with such a historic verdict.
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