Reuters: SAP AG must pay Oracle Corp $1.3 billion for software theft in a jury verdict that could be the largest-ever for copyright infringement.

The decision, by a US district court jury in Oakland California, drew a gasp from the courtroom and prompted hugs and handshakes among Oracle's legal team, which has pursued the case for years.

The damages dwarfed SAP's own estimate of the damages. Oracle's shares rose 1.5 per cent in after-hours trade, while SAP's U.S.-listed stock slid 1.4 percent.

Europe's top software maker, which said it was disappointed by the verdict, could now try to get the dollar amount knocked down by the trial judge, or pursue an appeal.

"We are, of course, disappointed by this verdict and will pursue all available options, including post-trial motions and appeal if necessary," SAP said in a statement in response to the verdict.

SAP has acknowledged that its TomorrowNow subsidiary had wrongfully downloaded millions of Oracle's files. With the admission of liability, the issue before the jury was how much was owed in damages. SAP said no more $40 million, while Oracle sought at least $1.65 billion.

Attorneys for the top U.S. software company called the verdict the largest ever for a copyright infringement case.

While SAP could appeal, Oracle attorney David Boies said, that would raise the possibility of a retrial. "If I were SAP, and I'm not, but if I were SAP, I'm not sure I would want to have another trial," Boies said.

The three-week courtroom drama, which captivated Silicon Valley, featured testimony from such top executives as Oracle Chief Executive Larry Ellison -- whom SAP's lawyers accused of plucking damages numbers "out of the air" -- and President Safra Catz.

SAP co-CEO Bill McDermott also took the stand and apologized to Oracle for the events surrounding TomorrowNow.

"Home run!" Eric Goldman, an associate professor at the Santa Clara University School of Law, wrote in an email. He expected SAP to appeal what he called one of the 10 or 20 largest jury verdicts in U.S. legal history.

"I would expect there to be lots more shenanigans. but now SAP is truly on the run. They have to climb an even steeper mountain."

NO APOTHEKER

Testimony in the trial wrapped up last week without a hoped-for appearance by former SAP chief and current Hewlett-Packard CEO Leo Apotheker.

During the trial, Oracle linked Apotheker to the operations of TomorrowNow. But it did not appear to produce evidence to prove he knew of the theft.

"For more than three years, SAP stole thousands of copies of Oracle software and then resold that software and related services to Oracle's own customers," Catz said in a statement.

"The trial made it clear that SAP's most senior executives were aware of the illegal activity from the very beginning."

Ellison has publicly charged Apotheker with overseeing an "industrial espionage scheme" to steal Oracle software. But both SAP and HP characterized the Apotheker issue as a sideshow and said Oracle offered no proof to back up its allegations.

Oracle's arguments about the importance of protecting intellectual property appeared to carry weight with the jury. Juror Joe Bangay, who works as an auto body technician, said the group did not focus on the star CEOs during their deliberations.

"Their information was helpful, but basically I was figuring on the property that was stolen," said Bangay, 57.

The U.S. government is also conducting a criminal investigation into the events surrounding TomorrowNow but has not disclosed details. SAP said it has been cooperating with Department of Justice investigators.

"They didn't split the baby did they? It's a big number and they decided fast," said Patrick Walravens at JMP Securities. "If you step back, I think it would've been difficult for any jury to deal with the fact that one company broke into another company's computer systems and just took so much stuff."

"The jury had a choice of either using the fair market value of the license, or using a loss-profit calculation, and the fair market valuation tended to lead you to larger numbers, so that's obviously the direction they decided to go."

But Chris Scott Graham, a partner with the Dechert law firm, said U.S. District Judge Phyllis Hamilton could now cut the size of the award.

"The function of the judge is to look at it from a more clinical standpoint to see if there is error... Sometimes jurors do get caught up in the rhetoric," Graham said. "There is a risk to Oracle that the judge could say 'I do not see enough legal evidence to support that award.'"

The case in U.S. District Court, Northern District of California is Oracle USA, Inc., et al. v. SAP AG, et al, 07-1658.