Practical Lessons from the Oracle vs. SAP Damages Case

In early September 2011, a trial court ordered a new trial involving a jury verdict in which Oracle obtained a $1.3 billion verdict from SAP. By all accounts, Oracle’s verdict is (or actually, was) the largest ever awarded for copyright infringement.

The Court summarized copyright damages law as follows:

The Copyright Act allows recovery of either statutory damages or ‘actual damages suffered by [the copyright owner] as a result of the infringement’ plus ‘any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages’ …Actual damages are generally determined by the loss in the fair market value of the copyright measured by the profits lost due to the infringement of the value of the use of the copyrighted work to the infringer. …

The Ninth Circuit has endorsed a retroactive license fee as measure of the loss in fair market value of the copyright. In situations where the infringer could have bargained with the copyright owner to purchase the right to use the work, actual damages are what a willing buyer would have reasonably required to pay a willing seller for the plaintiff’s work.” [Citations omitted]

All parties acknowledged that SAP obtained limited success from its infringement. Consequently, disgorgement of the defendant’s profits is not a large number relative to the large amount that Oracle won from the jury.

There are important practical lessons from this case, whether you are an intellectual property lawyer or not. These lessons are summarized in this article.

Generally, capable damages experts who understand the need to remain credible could have prevented this verdict reversal.


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