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Last updated at 15:08 GMT, Monday, 17 January 2011

Computer company awarded compensation

Summary

24 November 2010

The German computer software company, SAP, has been fined $1.3bn for stealing trade secrets from another company. Lawyers for Oracle, the other company involved, said the fine is the largest ever awarded in a corporate copyright abuse case.

Reporter:
Mark Gregory

Oracle CEO, Larry Ellison

Oracle Chief Executive, Larry Ellison

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The judgement is being seen as a severe blow to the reputation of the world's largest provider of software for business computer systems. SAP has always accepted that one of its subsidiary companies,TomorrowNow, which is now defunct, downloaded copyrighted Oracle software over the internet and used it in its own systems to lure customers away from Oracle.

SAP argued the financial consequences were small and it should pay no more than $40 million in damages. But the jury appears to have accepted Oracle's argument that the scale of the damages should reflect what it would have cost SAP to buy a license to use the stolen software at the outset, a far larger amount.

The penalty is certainly one of the biggest ever awarded in a corporate copyright case. Oracle's lawyers say it is the largest. Top executives from both firms gave evidence in the three-week trial, which has captivated the attention of California's Silicon Valley, a global centre for high technology industry.

SAP, Oracle and another company, Hewlett Packard, are involved in a bitter three-way tussle for control of the multi-billion dollar market for corporate computer systems. SAP's longstanding dominance is under threat by the other two. SAP says it's likely to appeal against the award. If nothing else, the case has brought home the potential financial risks firms face if they take others' trade secrets.

Mark Gregory, BBC News

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Vocabulary

subsidiary companies

smaller businesses in the same group of companies

defunct

not operating or in business any more

copyrighted

something created or made and owned by a person or company. It cannot be used by somebody else without permission

damages

compensation

outset

beginning

corporate copyright case

legal disagreement where companies argue about who is entitled to use something that is copyrighted

captivated the attention

attracted and held the attention

tussle

fight or competition

under threat

at risk or in danger

trade secrets

ideas that are private and are very important for the success of a business

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