* Payment to help cover legal expenses in copyright trial
* Oracle promises not to seek punitive damages from SAP
* Compensatory damages remain to be set
* SAP has already admitted wrongdoing in the case
(Adds Apotheker refusing subpoena, comment from attorney)
By Jim Finkle and Dan Levine
SAN FRANCISCO, Nov 3 Germany's SAP AG has
agreed to pay $120 million to Oracle Corp in return for a
promise by the U.S. company not to seek punitive damages in its
suit against SAP for software theft, according to sources
familiar with the agreement.
The legal drama in the case, which has captivated Silicon
Valley, further heightened when Hewlett-Packard Co (HPQ.N)
refused a subpoena for Leo Apotheker, its new chief executive
and a former CEO of SAP, to testify in the case.
The sources spoke on condition of anonymity because the
judge in the case has ordered both sides to keep the matter
SAP (SAPG.DE), which reported profit just shy of $1 billion
in its most recent quarter, has admitted fault in the three and
one-half year case, accepted liability and shut down its
TomorrowNow subsidiary, which improperly downloaded millions of
files from Oracle's ORCL.O customer service website.
The two companies are still fighting over the compensatory
damages that SAP will have to pay, anywhere from tens of
millions to billions of dollars. The trial began this week.
Compensatory damages are awarded for specific losses, while
punitive damages punish a defendant for wrongdoing.
The agreement needs final approval by U.S. District Judge
Phyllis Hamilton in Oakland, California, according to the
Dechert partner Chris Scott Graham said $120 million is a
big amount for legal fees, but he noted that a junior lawyer at
a big firm working full time can bill $1 million a year.
"It's an unfortunate truth about really big cases. They
tend to add up really fast," said Graham, who is not involved
in the case.
By taking punitive damages off the table, SAP could further
narrow the range of evidence presented to the jury, Graham
said. Regardless, Oracle might have been able to seek
attorneys' fees at the close of trial because SAP already
admitted liability in the case, he said.
"Might as well make an offer up front and try to reduce the
claims," he said.
WHERE IN THE WORLD IS LEO APOTHEKER?
Meanwhile, Oracle said that HP refused to accept a subpoena
requiring Apotheker to testify in the high-stakes trial.
"Mr. Apotheker started work for HP on Monday, but it now
appears that the HP board of directors has decided to keep him
away from HP's headquarters and outside the court's
jurisdiction," said Oracle spokeswoman Deborah Hellinger.
She said that Oracle would continue to attempt to serve
If he visits HP's headquarters in Palo Alto, California,
that would be close enough to the federal courthouse in Oakland
for Oracle to summon him to appear in court.
Hewlett-Packard spokeswoman Mylene Mangalindan said in a
statement that Oracle did not become interested in getting
Apotheker to testify live in court until after he was named CEO
of HP on Sept. 30. He was previously deposed in October 2008.
"Given Leo's limited knowledge and role in the matter,
Oracle's last-minute effort to require him to appear live at
trial is no more than an effort to harass him and interfere
with his duties and responsibilities as HP's CEO," she said.
Oracle said it planned to call two witnesses on Thursday --
former Oracle President Charles Phillips and SAP executive John
(Additional reporting by Gabriel Madway; Editing by Robert
MacMillan and Steve Orlofsky)