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ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2012
18. LEGAL PROCEEDINGS
SAP Intellectual Property Litigation
On March 22, 2007, Oracle Corporation, Oracle USA, Inc. and Oracle International Corporation (collectively,
Oracle) filed a complaint in the United States District Court for the Northern District of California against SAP
AG, its wholly-owned subsidiary, SAP America, Inc., and its wholly-owned subsidiary, TomorrowNow, Inc.,
(the SAP Subsidiary, and collectively, the SAP Defendants) alleging that SAP unlawfully accessed Oracle’s
Customer Connection support website and improperly took and used Oracle’s intellectual property, including
software code and knowledge management solutions. The claims alleged in the final operative complaint,
Oracle’s Fourth Amended Complaint, filed on August 18, 2009, include infringement of the federal Copyright
Act, breach of contract, violations of the Federal Computer Fraud and Abuse Act and the California Computer
Data Access and Fraud Act, civil conspiracy, trespass, violation of the California Unfair Business Practices Act
and intentional and negligent interference with prospective economic advantage. The SAP Defendants filed an
Answer on August 26, 2009.
On September 13, 2010, the court approved a stipulation by the parties whereby the SAP Subsidiary stipulated to
all liability on all claims and SAP AG and SAP America, Inc. stipulated to vicarious liability on the copyright
claims against the SAP Subsidiary, and the SAP Defendants retained all defenses related to damages.
Trial commenced on 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 its own contributory infringement of
120 of Oracle’s copyrights. Following trial on the sole issue of the amount of damages the SAP Defendants
should pay to Oracle for the admitted infringement, the jury awarded Oracle the sum of $1.3 billion. 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, and
on September 1, 2011, the court granted the SAP Defendants’ motion. The court vacated the $1.3 billion award
and held that the maximum amount of damages sustainable by the proof presented at trial is $272 million. The
court further held that Oracle may accept a remittitur of $272 million or, alternatively, the court will order a new
trial as to the amount of actual damages in the form of lost profits and infringer’s profits.
On September 23, 2011, Oracle filed a motion for certification of the order for immediate appeal, which the court
denied on January 6, 2012. On February 6, 2012, Oracle rejected the remittitur and requested a new trial. The
new trial, which will be to determine the amount of damages, is currently scheduled to commence on August 27,
2012, or as soon thereafter as the court is available.
On September 14, 2011, the SAP Subsidiary pled guilty to criminal copyright infringement and unauthorized
access to a protected computer with intent to defraud. Under a plea agreement reached with the U.S. Attorney’s
office, the SAP Subsidiary is required to pay a fine of $20 million to the United States, to pay restitution to
Oracle in an amount to be determined through the pending civil action and to remain on probation for a term of
three years.
Derivative Litigations 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 and one officer and
director who has since left the company. Plaintiffs allege that the officer and director defendants are responsible
for certain alleged conduct in a qui tam action that had been filed against Oracle in the United States District
Court for the Eastern District of Virginia. On July 29, 2010, the United States government filed a Complaint in
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