Quick recap:  November 2010, Oracle sued SAP for their illegal use and distribution of Oracle’s software.  The court favored Oracle in a ruling that ordered SAP to pay $1.3 billion to Oracle for damages.  SAP acknowledged their wrongdoing but stated that the amount was too much.  July 2011, SAP filed for a re-trial to lower the amount to be paid for damages brought about by their actions from $1.3 billion to somewhere between $28 million and $408.7 million.

Present:  September 2011, the court ruled in favor of SAP stating that the previous award was “grossly excessive.”  U.S. District Judge Phyllis Hamilton in Oakland, California granted SAP to throw out the previous award, reduced the amount to be paid to Oracle to $272 million and if Oracle rejects the decision, SAP will be granted a new trial for damages.

“The verdict grossly exceeded the actual harm to Oracle,” Hamilton said in the ruling. The jury verdict “was contrary to the weight of the evidence, and was grossly excessive.”

According to Hamilton, during the trial, instead of presenting evidences regarding SAP’s use of their copyrighted software as well as verifiable amount of customer loss, Oracle only presented the purported value of the intellectual property as a whole, as well as self-serving testimony from its executives regarding the price they claim they would have demanded in an admittedly fictional negotiation and Oracle urged the jury to disregard evidence of Oracle’s actual customer losses resulting from infringement.

Both SAP and Oracle issued statements after the verdict.

SAP: “We are very gratified with the Court’s decision. We believed the jury’s verdict was wrong and are pleased at the significant reduction in damages. We hope the Court’s action will help drive this matter to a final resolution. We are hopeful that this ruling will move the case toward an appropriate final resolution.”

Oracle: “There was voluminous evidence regarding the massive scope of the theft, clear involvement of SAP management in the misconduct and the tremendous value of the IP stolen. We believe the jury got it right and we intend to pursue the full measure of damages that we believe are owed to Oracle.”

The significance of this ruling is not so much on how much SAP will financially gain from this, but more on how much they will be saving because of the reduced award amount.

The reduction doesn’t represent a “major change” for SAP. “It’s not money that the company gets back, but money it doesn’t have to pay.” After taxes, SAP will have “saved” about EUR460 million. “This corresponds to about 10% of cash balance that simply won’t get lost now. It’s not that SAP will now have extra cash at hand,” Thomas Becker of Commerzbank pointed out.

Oracle is clearly not satisfied with the ruling and based on their statement this isn’t the final round of the SAP vs. Oracle bout.