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Oracle Corp. headquarters, Redwood City, Calif. - REUTERS Robert Galbraith

SAP attacks $1.3 billion Oracle verdict at hearing

7/13/2011 COMMENTS (0)

OAKLAND, Calif., July 13 (Reuters) - SAP AG asked a U.S. court to dislodge a $1.3 billion verdict it was ordered to pay to Oracle Corp, but the judge appeared just as interested in whether the two software giants could settle the case.

The companies have not had any settlement talks since last November's verdict, Oracle attorney Geoffrey Howard told U.S. District Judge Phyllis Hamilton at a hearing on Wednesday. A jury awarded Oracle $1.3 billion last November over accusations that SAP subsidiary TomorrowNow wrongfully downloaded millions of Oracle's files.

"There have been no discussions since the verdict," Howard said. "We're always willing to listen."

Complicating any potential settlement talks are SAP's requests that the judge slash the award, or throw the verdict out entirely and order a new trial. Oracle argues the verdict was proper.

Another dynamic is a criminal investigation by U.S. prosecutors into the events surrounding TomorrowNow. No charges have been filed.

Hamilton said she had not yet decided how she would rule on SAP's requests to disturb the verdict. However, she asked attorneys for the two companies whether there was any possibility of a settlement that would resolve the case.

"Hope springs eternal," responded SAP attorney Tharan "Greg" Lanier, adding that SAP would be open to a mediation session.

Spokespeople from Oracle and SAP declined further comment.

Hamilton said it would take "some time" for her to fashion a ruling on SAP's requests. If she accepts any of SAP's arguments against the verdict, it will "complicate this in a big way," Hamilton said.

Last year's three-week trial, which captivated Silicon Valley, featured testimony from such top executives as Oracle Chief Executive Larry Ellison -- whom SAP's lawyers accused of plucking damages numbers "out of the air" -- and Oracle President Safra Catz.

SAP co-CEO Bill McDermott also took the stand and apologized to Oracle for the events surrounding TomorrowNow.

At the hearing in an Oakland, California court, Howard said any potential discussion is also impacted by events after the verdict. According to Howard, McDermott denied liability for copyright infringement at a shareholder meeting, even though SAP admitted liability at trial.

In response, Lanier said he was at the shareholder meeting, and McDermott did not say that.

SAP acknowledged wrongdoing at trial but argued it should pay no more than $40 million. In its request to slash the award, SAP asked Hamilton to use a damages methodology that would put the figure at $28 million to $408.7 million.

Lanier argued at the hearing that Oracle had not proved a causal connection between the copyright infringement and the damages it sought.

"No reasonable jury could have come to this verdict without speculation," Lanier said.

But Howard said Hamilton should not overturn the award.

"There is no basis on which to second-guess the jury," Howard said.

The case in U.S. District Court, Northern District of California is Oracle USA, Inc., et al. v. SAP AG, et al, 07-1658.

For SAP: Robert Mittelstaedt, Jason McDonell and Elaine Wallace, Tharan Lanier, Scott Cowan and Joshua Fuchs of Jones Day.

For Oracle: Donn Pickett, Geoffrey Howard, Holly House, Zachary Alinder and Bree Hann of Bingham McCutchen; Steven Holtzman and Fred Norton of Boies Schiller & Flexner. Dorian Daley and Jennifer Gloss of Oracle.

(Reporting by Dan Levine)


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