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SAP to pay Oracle £197m in copyright infringement dispute

SAP has agreed to fork over $306 million (£197 million) in damages to rival enterprise software company Oracle to settle copyright infringement charges.

Oracle, the world’s leading database software company, alleges that an SAP unit downloaded and copied its software to avoid paying licensing fees. The infringement allegedly originated in SAP’s TomorrowNow unit, which was shut down in 2008. The firm has not contested charges that it was liable for the infringement.

In 2010, a jury awarded Oracle a whopping $1.3 billion (£836 million) in the case. But after a federal judge threw out that sum and replaced it with a considerably smaller $272 million (£175 million) award, Oracle opted for a new trial, which was set to begin on 27 August.

“The conduct that led to this lawsuit and jury award is truly unprecedented,” Oracle attorney Geoff Howard told Bloomberg in an e-mail.

The proposed offer, which was filed in a federal court and is awaiting judicial approval, was reached in an effort "to save the time and expense of this new trial, and to expedite the resolution of the appeal.”

If finalised, the agreement will allow Oracle to request that the original jury award be restored. SAP will only have to pay the damages after all trials and appeals in the matter have been resolved. Should a subsequent trial or appeal result in a verdict that is less than the agreed-upon $306 million (£197 million) in compensation, SAP has said it will pay the difference.

Oracle has already received $120 million (£77 million) in legal expenses from SAP.

"SAP believes this case has gone on long enough," a company spokesperson said in an email.

"Although we believe that $306 million (£197 million) is more than the appropriate damages amount, we agreed to this in an effort to bring this case to a reasonable resolution," he added.