High Court Denies SAP Petition Challenging Appellate Review During PTAB Proceeding

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The Supreme Court on Jan. 21 denied software giant SAP America Inc.'s petition for writ of certiorari in SAP Am., Inc. v. Versata Software, Inc. ( U.S., No. 13-716, review denied 1/21/14), appealing the ruling by the U.S. Court of Appeals for the Federal Circuit affirming a jury's award of $345 million for infringing Versata Software Inc.'s product pricing patent. Versata Software Inc. v. SAP Am., Inc., 717 F.3d 1255, 2013 BL 115505, 106 U.S.P.Q.2d 1649 (Fed. Cir. 2013) (85 PTD, 5/2/13).

The patent at issue in the case was also the subject of a “covered business method” challenge by SAP at the Patent Trial and Appeal Board. In its first decision on an America Invents Act-enabled post-grant opposition, the PTAB found Versata's business method patent claims ineligible for patenting under 35 U.S.C. §101. SAP Am. Inc. v. Versata Dev. Grp. Inc., No. CBM2012-00001, 107 U.S.P.Q.2d 1097 (P.T.A.B. June 11, 2013) (114 PTD, 6/13/13).

According to SAP's cert petition, “the court of appeals denied a stay of the infringement action without explanation.”

Thus, one of the three questions presented in the petition was:

Whether a patent infringement action should be stayed where the Patent Trial and Appeal Board has declared invalid all patent claims at issue in the infringement action and the defendant, which sought such review at the first opportunity, might otherwise be compelled to pay an enormous damages judgment and be subjected to a permanent injunction on the basis of the invalid claims.  


Versata took only six days to file its opposition brief, saying, “Even a successful defense before the [Patent and Trademark Office] cannot override a final court decision.”

The case also involved an unusual situation in which a defendant succeeded in getting a second damages trial, but the second jury increased the award by more than $200 million. Nevertheless, the appeals court affirmed the award. It reviewed the arguments made by Versata Software Inc.'s damages expert favorably for the most part, giving a tutorial of sorts on proper economic analysis for patent infringement damages.

SAP had also presented two other questions on the merits of the infringement and damages rulings against it:

• Whether a computer software manufacturer may be liable for direct infringement of a patent drawn to computer instructions where the software, as shipped, does not contain sufficient instructions to perform the claimed operations.  


• Whether flaws in an expert's methodology may be raised as part of a challenge to the sufficiency of the evidence or only to the testimony's admissibility.  


Douglas Hallward-Driemeier of Ropes & Gray LLP, Washington, D.C., represented SAP. Jeffrey A. Lamken of MoloLamken LLP, Washington, D.C., represented Versata.

SAP's cert petition is available at http://pub.bna.com/ptcj/130716petition.pdf.

Versata's opposition is available at http://pub.bna.com/ptcj/130716response.pdf


To contact the reporter on this story: Tony Dutra in Washington at adutra@bna.com

To contact the editor responsible for this story: Naresh Sritharan at nsritharan@bna.com

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