A US judge has thrown out an earlier ruling by a federal court for German enterprise software maker SAP to pay US rival Oracle $1.3bn in damages for copyright infringement.
US District Judge Phyllis Hamilton in Oakland, California, called said the award was grossly excessive and granted SAP's motion to throw out the verdict, according to US reports.
The maximum in damages based on evidence should be $272m, she said, adding that SAP should get a new trial for damages if Oracle rejects her decision to reduce the amount.
Although less than Oracle's claim of $2.3bn and chief executive Larry Ellison's claim of $4bn, the award was hailed as a major victory for the US company.
The $1.3bn award was the largest ever for copyright infringement when it was made in November last year after an 11-day trial.
Oracle filed the suit in 2007, claiming SAP's now-defunct TomorrowNow support services subsidiary illegally copied the software code from Oracle systems SAP needed to support customers, without buying licences to access it.
E-mails shown in court suggested SAP executives ignored warnings of copyright infringement.
SAP acknowledged that TomorrowNow made "inappropriate" downloads of Oracle materials in 2007. But SAP said Oracle exaggerated the impact on its business.
After the ruling in November, SAP said it was disappointed and would pursue all available options to have it overturned.
Oracle has responded similarly to the latest ruling, issuing a statement that the company intends to pursue the full measure of damages owed to Oracle.
Jurors based the $1.3bn award on the value of a hypothetical license that SAP would have needed to use Oracle's software. But SAP argued that the award should have been based on profit that Oracle lost and SAP gained as a result of the infringement.
At the time, SAP estimated that amount to be $28m to $408.7m. Judge Phyllis Hamilton's award of $272m fell well within this range.
Responding to Judge Hamiliton's ruling, SAP spokesman Jim Dever said: "We believe the jury's verdict was wrong and are pleased at the significant reduction in damages."
Oracle has until 30 September to consider whether to accept the latest ruling.