Jury Slams Business Objects For $25 Million In Informatica Patent Suit

The California jury ruled that Business Objects infringed Informatica's patents by selling its Data Integrator software, based on the ActaWorks technology it acquired in August 2002. Days after the acquisition was announced, Informatica filed a lawsuit alleging patent infringement against ActaWorks' maker, Acta Technology. The suit, which Business Objects inherited when it purchased Acta, went to trial last month in U.S District Court for the Northern District of California.

"Today, a jury unanimously determined that the patents are valid and that Business Objects' infringement on Informatica's patents was done willfully," Informatica said in a written statement. Informatica is headquartered in Redwood City, Calif.

Business Objects, based in Paris and San Jose, Calif., plans to appeal Monday's decision, and emphasized that the legal process is still ongoing.

"While we are disappointed with the jury's decision, the case is not over," Brian Stine, acting general counsel of Business Objects, said in a written statement. "The trial court must still determine whether Informatica engaged in inequitable conduct in failing to disclose prior art regarding these patents to the US Patent and Trademark Office. We remain confident that we will prevail."

Informatica's patents relate to methods of transforming data in a data-warehousing application, the core technology powering ETL (extract, transform, load) software. The presiding judge, Elizabeth Laporte, ruled last week that Informatica had legally proved that Business Objects infringed Informatica's patents in certain instances, according to court documents.

However, Business Objects is seeking to have the patents invalidated by showing prior art preceding Informatica's 1997 patent applications. The court will consider that issue this month, Stine said in an interview. Unearthing prior art is a common method for invalidating patents and derailing lawsuits.

The case will have broad ramifications for ETL software makers, which could face similar claims from Informatica if its patents stand. A handful of solution providers have been dissecting the case in blogs, Groklaw-style. Australian consultant Vincent McBurney is analyzing the twists and turns in what he's dubbed "the ETL trial of the century," such as Business Objects subpoena of IBM to provide prior-art evidence.

For Business Objects, the outcome could be expensive. The jury's finding that Business Objects' infringement was willful allows the judge to grant up to three times the $25 million sum determined by the jury for unpaid royalties. Business Objects had net income of $75.4 million last year, on revenue of $1.3 billion.

Informatica said it will next ask the court for a permanent injunction blocking Business Objects from shipping infringing technology. Business Objects countered that it's prepared to "quickly replace the code in our shipping products" if necessary.