Versata Software, Inc. v. Sap America, Inc.
717 F.3d 1255
Fed. Cir.2013Background
- This case concerns Versata’s infringement suit against SAP over the ’400 and ’350 Patents relating to hierarchical pricing.
- Versata alleged SAP’s ERP/CRM products infringed the asserted claims; the jury found infringement of the ’350 Patent and some findings on the ’400 Patent, with a damages award.
- The trial court granted JMOL of noninfringement for the ’400 Patent, denied JMOL for the ’350 Patent, and entered (and later remanded with modification) a permanent injunction.
- A second trial addressed damages, including lost profits and reasonable royalties, after SAP modified its products with a patch to avoid infringement.
- The court ultimately affirmed infringement and damages, vacated the permanent injunction to the extent overbroad, and remanded for modification consistent with the opinion.
- Key issues on appeal include JMOL challenges on infringement, lost profits/royalties analyses, and injunction scope.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| JMOL on infringement of the ’350 Patent | Versata: SAP infringes without modification; expert showed source code evidence. | SAP: instructions required by claims not met by shipped software; denormalized numbers issue. | Infringement supported; denial of JMOL affirmed. |
| Lost profits under Panduit | Versata showed demand and lost SAP sales; strong evidence of causation. | SAP challenged methodology under Panduit and Daubert; insufficient proof. | Lost profits award affirmed based on Panduit factors and substantial evidence. |
| Reasonable royalties | Versata argues expert testimony limited; royalty should reflect proper baseline. | SAP offered Khimetrics-based comparable; proposed per-sale royalty. | Royalty award upheld; not error to base on comparables and hypothetical negotiation. |
| Permanent injunction overbreadth | Injunction improperly covers maintenance/additional seats. | Injunction appropriately enjoins infringing capability. | Partial vacatur: modify injunction to avoid restricting maintenance/adds that do not access the enjoined capability. |
| JMOL/noninfringement of the ’400 Patent (Versata cross-appeal) | Versata argued SAP infringement; trial court erred in JMOL. | SAP: no infringement under claim scope. | Affirmed denial of JMOL on the ’400 Patent; no reversible error identified. |
Key Cases Cited
- Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538 (Fed. Cir. 1995) (causation and evidentiary standard for lost profits/injunction)
- Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152 (6th Cir. 1978) (four-factor test for lost profits damages)
- Crystal Semiconductor Corp. v. TriTech Microelectronics Int’l, Inc., 246 F.3d 1336 (Fed. Cir. 2001) (various bases for proving lost profits under Panduit framework)
- DePuy Spine Inc. v. Medtronic Sofamor Danek, Inc., 567 F.3d 1314 (Fed. Cir. 2009) ( Panduit factors and demand focus in damages analysis)
- Finjan, Inc. v. Secure Computing Corp., 626 F.3d 1197 (Fed. Cir. 2010) (extent of run-time operation and activation of functions in infringement analysis)
- LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51 (Fed. Cir. 2012) (entire market value rule limitations in royalty calculations)