That's a Big One, Oracle

The long-running legal battle between Oracle (Nasdaq: ORCL  ) and software rival SAP (NYSE: SAP  ) just took a nasty turn -- from SAP's perspective, that is.

Oracle sued SAP in 2007 over ill-gotten gains from downloading a lot of Oracle software and then selling support to SAP customers based on those downloads. Oracle's CEO claimed that the stolen software was worth $4 billion in license fees and wanted $2.3 billion in damages for this bad behavior, to which SAP countered by admitting guilt but limiting the damage done to Oracle quite severely -- $40 million should cover it, the company reckoned.

Well, the verdict is in, and it pretty much splits the difference between the two extremes: SAP has been ordered to pay up $1.3 billion to Oracle. The German transgressor had set aside just $160 million to pay for this case. Ouch.

Naturally, SAP has vowed to fight on to reduce the price tag a bit. This is not the end of the Oracle-SAP litigation saga, and one can only hope that the case doesn't drag on for another three years. SAP can clearly afford an outcome of this magnitude, as the company produced about $4 billion of operating cash flows in 2009 with minimal capital expenses. But hot dog, it would hurt.

On the other hand, other infamous multiyear cases such as TiVo (Nasdaq: TIVO  ) versus DISH Network (Nasdaq: DISH  ) or Viacom (NYSE: VIA  ) versus Google's (Nasdaq: GOOG  ) YouTube have dragged on as one side accuses the other of something the other doesn't think is wrong. This one's different. The length of the rehearings, appeals, and other legal tactics should be limited by the fact that SAP has admitted its guilt and we're only talking about the size of the damages.

So we have a ballpark figure, and the end of this case shouldn't be too far off. SAP's stock fell by a measly 1% on the news while Oracle climbed by 2% on a generally upbeat market day. Follow the outcome by adding SAP to your Foolish Watchlist right now.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Google is a Motley Fool Inside Value selection. Google is a Motley Fool Rule Breakers recommendation. The Fool owns shares of Google and Oracle. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.


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