At the halfway point of the tech trial of the year, we have solid clues as to what SAP will argue and what the jury will decide. Less certain is the lasting impact on the software industry.
With much of the Oracle-SAP trial drama spent, the insanity is giving way to mundanity: lawyers laying traps and expert witnesses parsing language to protect fat fees. The jurors must be wondering what sort of world we live in where companies tack on enormously profitable fees to patch, update and support products that take 30,000 engineers and billions of dollars to build. If Oracle and SAP were automakers, they'd require customers to buy the power train warranty to actually drive a purchased car.
When five weeks of trial proceedings end and three years of work winds down, 8 jurors will produce a single number, Oracle will be a little wealthier and a shamed SAP will manage to endure without missing a payroll. But the dark shadow of Oracle v. SAP will lurk indefinitely.
SAP's acquiescence is practically complete, having accepted both vicarious and contributory liability for the copyright infringement of its former TomorrowNow unit. It has also agreed to keep Bingham McCutchen LLP (Oracle's attorneys) swaddled in custom-tailored suits and country club dues for years with an agreement to pay Oracle's legal fees to the tune of $120 million. No word on whether that covers David Boies, for whom this is merely side work; he of DOJ v. Microsoft, California Proposition 8 and Bush v. Gore.
From here, SAP chips away at an artificial ceiling set by Oracle's damage expert, Paul Meyer: $1.66 billion. By accepting liability, it has avoided a public evisceration, as hard as Oracle has tried to deliver one anyway, and now SAP will cast itself as a victim of its own optimism and naiveté and demonstrate how it failed to meet its board's expectations for TomorrowNow. And because of this failure, it will hope the jury sees Oracle as the unreasonable victor intent on an excessive end-zone celebration. In German, Schadenfreude.
At the halfway point, what happens next is already becoming clear -- what SAP will argue, what the jury will decide and, most important, its lasting impact on the software industry.
The Difference Between $40 Million And $4 Billion
Oracle CEO Larry Ellison put the price tag at $4 billion. Perhaps he's looking for SAP to pay for a portion of the $11.1 billion PeopleSoft acquisition, the maintenance on "Rising Sun" (Ellison's yacht) and alimony to one of his first three wives. Oracle would like to base the damages on the "fair market value" for the licenses it hypothetically would have sold to SAP in January 2005, those hopeful days when SAP acquired TomorrowNow for a measly $10 million and began using the new company as the basis for its delusional Safe Passage program.
That program looked great on paper, but that paper is at the heart of SAP's undoing.
It turns out neither side would have actually undertaken such a negotiation. They've said as much, but it needs to be imagined nonetheless, according to Georgia Pacific v. United States Plywood (1970), a patent case that Oracle's team has successfully argued should be a basis for determining damages.
SAP only wants to imagine Ellison sleeping in a padded room with a dribble bib.
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