SAP agrees to pay Oracle $306 million in damages

Logo of German company SAP is pictured at the CeBit computer fair in Hanover, March, 6, 2012. The biggest fair of its kind will run to March 10, 2012.

(Reuters) - Business software maker SAP agreed to pay rival Oracle Corp $306 million in damages over copyright infringement allegations against a SAP unit, avoiding a new trial.

The proposed agreement requires court approval, and would clear the way for Oracle to ask the 9th U.S. Circuit Court of Appeals to restore a $1.3 billion jury award in this case, according to a joint filing with a federal court in Oakland, California on Thursday.

The companies agreed to the $306 million "to save the time and expense of this new trial, and to expedite the resolution of the appeal," lawyers for Oracle and SAP said in the filing.

A Northern California jury determined in 2010 that Oracle should be paid $1.3 billion over accusations SAP subsidiary TomorrowNow wrongfully downloaded millions of Oracle files.

However, U.S. District Judge Phyllis Hamilton last year discarded the jury verdict and said Oracle could accept a $272 million award, or opt for a new trial against SAP.

The proposed agreement also confirms that Oracle should recover $120 million for legal bills, a sum that has already been paid.

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

"Although we believe that $306 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.

The case is Oracle USA Inc et al v. SAP AG et al, U.S. District Court, Northern District of California, No. 07-01658

(Reporting By Nicola Leske and Jonathan Stempel; editing by Carol Bishopric)