Oracle 2010 Annual Report Download - page 136

Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2011
Based on information obtained during discovery, Oracle amended its complaint several times. Oracle filed its operative complaint, Oracle’s Fourth Amended
Complaint, on August 18, 2009. The SAP Defendants filed an Answer on August 26, 2009.
On August 26, 2009, the SAP Defendants filed an early motion for summary judgment directed to Oracle’s damages theory. After full briefing, the motion was
heard on October 28, 2009. By order dated January 28, 2010, SAP’s motion for partial summary judgment was denied.
On March 3, 2010, the SAP Defendants and Oracle each filed a motion for partial summary judgment. After receiving briefing and hearing oral argument, the
court issued an order on August 17, 2010, granting in part and denying in part each of these motions. Regarding Oracle’s motion, the court granted partial
summary judgment regarding certain copyright infringement, Federal Computer Fraud and Abuse Act, and California Computer Data Access and Fraud Act
claims against TomorrowNow. The court also granted partial summary judgment regarding certain vicarious copyright infringement claims against SAP AG.
Regarding the SAP Defendants’ motion, the court found that Oracle EMEA Ltd. could not pursue claims in California. The court further held that Oracle could
not recover, as a measure of damages, “saved development costs” (that is, the amount the SAP Defendants would have had to pay to independently develop the
software at issue).
On September 13, 2010, the court approved a stipulation by the parties. Pursuant to the stipulation, TomorrowNow stipulated to all liability on all claims asserted
against it in this action, and preserved no defenses as to that liability. TomorrowNow retained defenses as to damages. Under the stipulation, SAP AG and SAP
America, Inc. stipulated to vicarious liability on the copyright claims against TomorrowNow. SAP AG and SAP America, Inc. retained all defenses related to
damages.
Trial commenced November 1, 2010. On November 2, 2010, the court approved a stipulation by the parties, pursuant to which SAP AG and SAP America, Inc.
stipulated to liability for contributory infringement of 120 of Oracle’s copyrights. The trial proceeded to determine the amount of damages the SAP Defendants
should pay to Oracle. Following trial, the jury awarded Oracle the sum of $1.3 billion. The court entered judgment for that amount and for pre-judgment interest
on February 3, 2011. The amount has not been received and has not been recorded as a benefit to our results of operations. On February 23, 2011, the SAP
Defendants filed a motion for judgment as a matter of law and for new trial, arguing, among other things, that the jury should not have considered the fair market
value measure of damages and that Oracle’s evidence was insufficient. Oracle filed a conditional motion for new trial on the same day, arguing that if the court
chose to grant the SAP Defendants’ motion for new trial, certain erroneous trial rulings should also be remedied. The motions are currently set to be heard on
July 13, 2011.
On June 9, 2011, the court entered a stipulated order, requiring SAP to post an appeal bond in the amount of approximately $1.3 billion by June 23, 2011. SAP
posted a bond in this amount, and in a June 22, 2011, order, the court approved the bond.
Derivative Litigation and Related Action
On August 2, 2010, a stockholder derivative lawsuit was filed in the United States District Court for the Northern District of California. On August 19, 2010, a
similar stockholder derivative lawsuit was filed in the Superior Court of the State of California, County of San Mateo. The derivative suits were brought by
alleged stockholders of Oracle, purportedly on our behalf, against some of our current officers and directors. Citing the claims in a qui tam action (discussed
below), plaintiffs allege that Oracle improperly overcharged the United States government by failing to provide discounts required under its contract with the
General Services Administration (GSA), and that Oracle made false statements to the United States government. Plaintiffs alleged that the officer and director
defendants are responsible for this alleged conduct and have exposed Oracle to reputational damage, potential monetary damages, and costs relating to the
investigation, defense, and remediation of the underlying claims. Plaintiffs bring claims for breach of fiduciary duty, abuse of control, and unjust enrichment. The
plaintiffs seek compensatory and other damages, restitution, disgorgement of alleged illicit proceeds, punitive damages and
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Source: ORACLE CORP, 10-K, June 28, 2011 Powered by Morningstar® Document Research℠