SAP loses bid to overturn $345 million patent judgment

The long-running dispute centers on pricing software

An appeals court has rejected SAP's attempt to overturn a US$345 million judgment awarded to Versata Software, which had brought a patent-infringement case against the software maker.

"Sufficient evidence supports the jury's verdict," Chief Judge Randall Rader wrote in the decision, which was released Wednesday.

In the 1990s, Versata developed and sold software that companies use to determine the prices of their offerings based on customer size, geographic location and other factors, the decision states. Called Pricer, the software was used by SAP customers as a "bolt-on" to their core ERP (enterprise resource planning) system.

SAP subsequently released its own pricing software and bundled it into "its full enterprise software to discourage the use of bolt-on products like Pricer," the decision states. Pricer sales took a tumble "as SAP's bundled software took hold," it adds.

Versata sued SAP in 2007, alleging its pricing software infringed a number of its patents.

Initially, Versata won a $139 million verdict in August 2009, but a judge later set that award aside and ordered a new trial to determine damages.

Before the second trial, SAP applied a software patch to its pricing software that was meant to eliminate "any basis for future infringement" on Versata's patents, according to the appeals court's decision.

But the second trial's jury concluded SAP's software still infringed Versata's intellectual property, even with the patch, and it awarded Versata $345 million in May 2011.

A permanent judgment was also applied to SAP, barring it from continuing to sell the pricing functionality.

In its appeal, SAP argued that the injunction was too broad because it also prohibited SAP from selling additional seats and maintenance services to existing customers.

The appeals court agreed with SAP on this point and asked the trial court to modify the wording of the injunction. "SAP should be able to provide maintenance or additional seats for prior customers of its infringing products, so long as the maintenance or the additional seat does not involve, or allow access to, the enjoined capability," the decision states.

"SAP's attorneys are currently reviewing the court's ruling," SAP spokesman Andy Kendzie said via email. "We are pleased the court found the injunction was overbroad and remanded it to the lower court for modification. Until we have had a chance to review this ruling in detail, we will not comment further."

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

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