Hypothetical License Analysis Questioned in Oracle v. SAP

In a massive filing this week, European business-software giant SAP AG is looking to have a new trial on damages. The liability phase was concluded last fall, and the jury’s award of $1.3 billion to Oracle Corp. plus $14 million in pre-judgment interest is the only point of contention left.

Coming on the heels of the recent high-profile reviews of IP infringement damages analyses sparked by the Uniloc v. Microsoft and the Versata v. SAP cases, this latest motion asks the Court to question the proper application of the Georgia Pacific factors, which arose in the context of Patent Law, to determine a reasonable royalty to determine the proper remedy for the Plaintiff in this copyright infringement case, and offering the alternative of the disgorgement of defendants’ profits, among other case-specific issues.

According to the motions, damages should be reduced to a level commensurate with Plaintiff’s own expert’s determination of Oracle’s Lost Profits, which are less than $300 million. In a way, part of the argument is that, in analyzing the “hypothetical license” scenario, Oracle’s expert improperly included in the royalty the reimbursement of Oracle’s overall R&D investments and disregarded evidence of the actual extent of the use made of the infringing information and the actual number of customers SAP acquired.

We shall continue to monitor the changing damages landscape, not only from the perspective of legislative reform, but also from the increasingly acute scrutiny of patent infringement damages expert reports.

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