Supreme Court Snubs SAP Appeal of $391 Million Versata Win

, The Litigation Daily


U.S. Supreme Court building
U.S. Supreme Court building

The U.S. Supreme Court declined Tuesday to hear software maker SAP AG's appeal of a $391 million patent infringement judgment in a long-running dispute with Versata Software. According to Versata's lawyers at McKool Smith, the decision means SAP has just 15 days to pay up. SAP, however, may not see things that way.

"It feels good. It's been a long, long road," McKool Smith's Scott Cole said of Tuesday's decision. Cole represented Versata through two trials and opposed SAP's Supreme Court cert petition alongside Jeffery Lamken of MoloLamken.

Indeed, the case has quite the backstory. McKool Smith originally filed the suit for Versata in 2007 in U.S. district court in Marshall, Texas, claiming that SAP willfully ripped off its patent for software that customizes pricing based on things such as purchase history and order size.

A jury awarded Versata $139 million in reasonable royalties at trial in 2009, handing a big loss to SAP and its then-counsel at Howrey. But a magistrate judge vacated the verdict and ordered a new trial after a string of decisions by the U.S. Court of Appeals for the Federal Circuit reining in patent damages.

In May 2011, Cole and his McKool Smith colleagues won a $345 million verdict in the reboot trial, this time against defense counsel at Fish & Richardson. That award, which ballooned to $391 million with interest tacked on, was upheld at the Federal Circuit in May. We named Cole and McKool Smith name partner Mike McKool, who handled arguments at the Federal Circuit, our Litigators of the Week for the Federal Circuit victory. (J. Michael Jakes of Finnegan, Henderson, Farabow, Garrett & Dunner argued that appeal for SAP.)

SAP was represented in its Supreme Court bid by Ropes & Gray's Douglas Hallward-Driemeier along with Finnegan Henderson and Fish & Richardson. Through an SAP spokesman, Hallward-Driemeier passed along the following statement: "SAP is disappointed that the Court did not take up the issues presented in our petition at this time, but the denial of certiorari was not entirely unexpected in light of the fact that the case is still in an interlocutory posture, and the litigation will now move forward again on remand to the district court."

Hallward-Driemeier also pointed out that the patent claims at issue were declared invalid last year by the U.S. Patent and Trademark Office. That decision—the first of its kind under the America Invents Act—has been appealed to the Federal Circuit.

Just where does all this leave the $391 million Versata won at trial? Cole told us that the infringement case is now closed, and he noted that SAP had already stipulated that it "will pay within fifteen (15) days of the completion of all appeal and remand proceedings (including any proceedings before the Supreme Court of the United States)." But SAP counsel Hallward-Driemeier said in his statement that "the lower courts will need to resolve the impact of that [invalidity] determination on Versata's infringement litigation."

Bottom line? Even after Tuesday's ruling the fight is likely to continue.

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