SAS wins jury verdict that triggers $79M award

Business software company SAS has won a jury verdict that will ultimately entitle it to collect more than $79 million in damages from a competitor it accused of wrongfully reverse-engineering its software to create a “knock-off” product.

Following a three-week civil trial, a federal jury in New Bern on Friday decided that a British Company, World Programming, committed fraud and breach of contract and awarded SAS $26.4 million in actual damages. Moreover, the jury found that World Programming violated the state’s Unfair and Deceptive Trade Practices Act, which mandates that the damages be trebled to more than $79 million.

“Basically, we’ve been vindicated that what we said all along is true – that they couldn’t have built their software without our software, and they weren’t allowed to have our software for that purpose,” said John Boswell, SAS’s chief legal counsel.

The jury also awarded SAS $3 million in punitive damages, but those damages will in effect be superseded by the treble damages, said Raleigh attorney Pressly Millen of Womble Carlyle Sandridge & Rice, the lead attorney in the case.

With the verdict in hand, Boswell said, SAS now intends to seek a permanent injunction barring World Programing from selling its World Programming System software in the United States.

World Programming officials could not immediately be reached for comment.

Millen said that, based on testimony at trial, privately held World Programming has about 60 employees.

Asked whether World Programming has the wherewithal to pay the judgment, Millen replied: “I don’t know.”

Boswell said the primary goal of the legal action was to stop World Programming from continuing “to steal our customers,” which will be achieved if SAS obtains an injunction.

That said, Boswell added, “we certainly did suffer these damages” and will try to collect them.

“I don’t know what assets they have, or what insurance they have,” he said. “So I don’t know if they can pay it or not.”

SAS alleged at trial that World Programming committed “fraudulent inducement” by licensing a copy of SAS Learning Edition software without ever intending to comply with the terms of the license, which prohibits a company from using it for its own commercial purposes, Millen said. SAS Learning Edition, which is no longer available, was used by university students to learn how to program in SAS language.

That software was “indispensable” to World Programming’s efforts to create a product that “precisely mimicked” SAS System software that is used to perform tasks such as data management and statistical analysis, SAS contended.

SAS also alleged that a World Programming vice president obtained a copy of SAS Learning Edition software by misrepresenting the company as being in the financial services business rather than a SAS competitor.

World Programming has been marketing its World Programming System software to “long-standing SAS customers” and touted that its software emulated SAS’s software, according to SAS’s lawsuit.

SAS filed lawsuits against World Programming in both federal court and in the United Kingdom. The company failed to win the relief it sought in the U.K. lawsuit.

“Even the court in England found that they breached the contract,” Boswell said. “But in England, because of a unique European software law, they were allowed to get away with breaching the contract.”

SAS’s federal lawsuit, which was originally filed in January 2009, was dismissed by Judge Louise Flanagan, in part in deference to the U.K. litigation. But the Fourth Circuit Court of Appeals reversed that decision in 2012.

This story was originally published October 14, 2015 at 3:32 PM with the headline "SAS wins jury verdict that triggers $79M award."