Business software giant SAS, which last fall won a $79 million jury verdict against a British startup it accused of illegally reverse-engineering its software, has failed to block the much smaller competitor from continuing to sell its product in the United States.
Senior U.S. District Judge David A. Faber in New Bern recently denied SAS’s request for a permanent injunction that would have barred World Programming from selling its World Programming System, or WPS, software to U.S. business customers.
SAS, which is headquartered in Cary, unsuccessfully argued that the injunction was justified because the damages it was awarded by the jury did not include future losses stemming from the loss of customers to World Programming. World Programming countered that the jury’s verdict did encompass lost profits going forward and that SAS would in effect be compensated twice over if it obtained an injunction.
The judge also noted that SAS previously failed to prevail in its claim that World Programming infringed on its copyright, undercutting its arguments in favor of an injunction.
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John Boswell, SAS’s chief legal officer, called the judge’s ruling “extremely frustrating.”
“If you look at the case, basically what he found in his decision was that, but for misusing our software, they could not have built their product,” Boswell said. “It seems to me the legal result of that ... would be to say, okay, you can’t sell it anymore in the U.S. because it’s the fruit of the poisonous tree.”
Boswell added that SAS plans to appeal the ruling to the Fourth U.S. Circuit Court of Appeals.
Last fall a jury found that World Programming committed fraud and also violated the state’s Unfair and Deceptive Trade Practices Act. SAS had alleged that World Programming committed “fraudulent inducement” by deceitfully licensing a copy of SAS Learning Edition software and then using it to create a product that “precisely mimicked” SAS System software that performs tasks such as data management and statistical analysis.
In separate court orders issued on June 17 along with the injunction ruling, Faber rejected World Programming’s requests to overturn the jury’s damages award or order a new trial.
The judge also approved SAS’s motion for treble damages, which boosted the jury’s $26 million-plus award to $79 million.
“We’re happy with the result, with the one exception of the injunction,” Boswell said.
World Programming hailed the judge’s decision to allow it to continue to market its software in the U.S.
“We like to compete with SAS Institute and other analytics software providers on a level playing field and customers are free to choose which software meets their needs best,” CEO Oliver Robinson said in a statement.
World Programming also touted that courts “have consistently found that WPS software does not infringe any SAS Institute copyright.”
Boswell said that SAS also intends to ask the 4th Circuit to address the copyright issue.
“We think that when they take our software ... and they write identical software, it couldn’t be any clearer of a copyright violation,” he said.
SAS has more than 14,000 employees worldwide, including about 6,000 in Cary, and generated $3.16 billion in revenue last year. World Programming, which has about 75 employees, doesn’t disclose its revenue.
SAS told the court that the jury award was an inadequate remedy because it may have trouble collecting the money given “WPL’s lacks of assets in the United States, coupled with its status as a ‘start-up business.’ ”
Boswell said SAS will seek to recover the money owed it in British courts and also is considering seeking a U.S. court order to attach fees that U.S. customers owe World Programming. And, if the appeals court ultimately rejects SAS’s request for a permanent injunction, he added, SAS’s plan B would be to sue World Programming again for lost sales incurred since the jury trial.