July 9, 2015 / 7:50 PM / 2 years ago

U.S. court invalidates Versata patent in $391 million case

Pens with the logos of SAP are pictured before the company's annual general meeting in Mannheim, Germany, May 20, 2015. REUTERS/Kai Pfaffenbach

NEW YORK (Reuters) - A U.S. appeals court on Thursday upheld the cancellation of a software patent owned by Versata Inc that previously led to a $345 million jury verdict against its German rival SAP SE.

The U.S. Court of Appeals for the Federal Circuit, the top patent court in the United States, agreed with the U.S. Patent and Trademark Office that the Versata patent was too basic to deserve legal protection.

Versata’s patent, which covers software that can customize the pricing of products by order or customer, is “conventional, routine and well-known,” the three-judge Federal Circuit panel said.

Versata, which sells enterprise software to companies such as utilities and telecom providers, said its products had been copied illegally in SAP applications and sued SAP for infringement in 2007.

In 2011, a federal jury in the Eastern District of Texas found in Versata’s favor, ordering SAP to pay the hefty damages award. In 2013, the Federal Circuit affirmed the award, which by then reached $391 million, including interest.

In January, 2014, the U.S. Supreme Court refused to take up the case. Both companies then settled the infringement litigation in October, according to court documents. Financial terms were not disclosed.

SAP’s lawyer Erika Arner said the company was pleased with the outcome, but declined to comment on how it would affect the settlement.

A representative for Versata could not immediately be reached.

While the appeals were proceeding, SAP separately challenged the validity of the patent at the federal patent agency. In June 2013, the agency ruled the patent was invalid. Versata, based in Austin, Texas, appealed. On Thursday, the Federal Circuit upheld that ruling.

The case is Versata Development Group, Inc v. SAP America, Inc et al, in the U.S. Court of Appeals for the Federal Circuit, No. 14-1194.

Reporting by Andrew Chung; Editing by Alexia Garamfalvi and Lisa Shumaker

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