Oracle wins courtroom clash with SAP

Oracle Corp's courtroom clash with archenemy SAP AG has paid off handsomely.

A jury on Tuesday ordered SAP to pay US$1.3 billion - more than half of its total profit last year - for a subsidiary's skullduggery in stealing a stockpile of software and customer-support documents from password-protected Oracle websites.

The German software company was caught off guard by the size of the verdict. It had only set aside US$160 million for anticipated damages, and already paid US$120 million of that to Oracle's lawyers.

The penalty is one of the largest on record for software piracy, and has the potential to reshape the business software landscape because of the extent of the damage to the pocketbook and reputation of one of its biggest players.

The verdict came after less than a full day of jury deliberations, and followed a three-week trial that turned into a Silicon Valley sideshow.

Stoking the drama were colourful public provocations by Oracle's outspoken CEO Larry Ellison, the looming possibility of a crushing verdict against a company that makes ubiquitous business software, and the spectre of Silicon Valley's most elusive new celebrity, Hewlett-Packard Co CEO Leo Apotheker.

In the end, Oracle turned the trial into a double feature: a grinding attack on SAP, whose dominance in business applications is under assault from Oracle, and HP, another technology industry heavyweight with which Oracle shares a decades-long partnership that is now coursing with bad blood.

"For more than three years, SAP stole thousands of copies of Oracle software and then resold that software and related services to Oracle's own customers," Oracle co-president Safra Catz said after the verdict.

"Right before the trial began, SAP admitted its guilt and liability. Then the trial made it clear that SAP's most senior executives were aware of the illegal activity from the very beginning."

Representatives of SAP, which is based in Walldorf, Germany, expressed disappointment and said the company will "pursue all available options, including post-trial motions and appeal if necessary."

If the size of the punishment is ultimately allowed to stand, SAP's takeover in 2005 of a small software-support firm called TomorrowNow, which dragged the company into this mess, will end up costing SAP significantly more than the US$10 million it paid for the acquisition.

- AP