(CN) - Oracle failed on Friday to have the 9th Circuit reinstate $1 billion of a $1.3 billion jury award, the largest judgment ever in a copyright case.
The case stems from a complaint Oracle brought
against German company SAP in 2007. In 2010 a jury decided that SAP's American unit had made thousands of illegal downloads and copies of Oracle software to duck licensing fees and steal customers.
U.S. District Judge Phyllis Hamilton struck down
the award the next year, however, saying that the jury had been "invited ... to engage in guesswork." She said Oracle must accept $272 million or she would order a new trial for damages.
A three-judge panel with the 9th Circuit found Friday that SAP should be forced to pay $356 million for profits that Oracle lost and SAP gained when SAP poached Oracle's customers.
Though they found no need to award Oracle nearly $1 billion in hypothetical-license damages, the appellate judges did fault Hamilton for ruling that hypothetical-licensing damages could never be awarded if a company, like Oracle, had never been willing to license a copyright.
A copyright holder seeking hypothetical-license damages need not show that it would have actually ever granted a license to a copyright infringer, according to ruling.
Jude William Fletcher, the author of Friday's opinion, said as much at the appellate hearing
in May, telling Oracle attorney Kathleen Sullivan: "That doesn't necessarily win the case for you, but I agree with you on that point."
"Given that the evidence presented at trial failed to provide 'the range of the reasonable market value' for the hypothetical license in question, we hold that the jury awarded damages using an 'undue' amount of speculation," Fletcher wrote.
Sullivan had focused her oral arguments on SAP's internal projections, which showed its managers expected that poaching Oracle customers would bring in $897 million in new revenues over a three-year period.
The 9th Circuit limited Oracle to two choices: accept a $356.7 million check from SAP for the infringement, or go to trial again. If Oracle chooses to go to trial, it is barred from pursuing hypothetical-license damages for the infringement.
The $356 million remittitur represents Oracle's lost profits in addition to profits that SAP gained from the infringement, but does not contain any hypothetical-license damages.
Hamilton had calculated the remittitur at $272 million, but the 9th Circuit raised that figure $356 million, the maximum amount sustainable by proof.
Judges Susan Graber and Richard Paez concurred with Fletcher.
SAP's attorney at the May hearing was Greg Lanier of Jones Day in Palo Alto. Sullivan is a partner with Quinn Emanuel Urquhart & Sullivan in New York.