The $1.3 billion fine levied against SAP, after a former subsidiary was convicted of stealing intellectual property from rival Oracle, was been rejected in a US court a "grossly excessive".

The record fine was set in November last year, after SAP admitted its TomorrowNow subsidiary – which it has since sold – had illegally downloaded Oracle software and and supporting documents.

Following an appeal from SAP, however, US district judge Phyllis Hamilton ruled that the fine was disproportionate to the damage the Oracle actually suffered, and criticised Oracle’s methods for calculating that damage.

"Rather than providing evidence of SAP’s actual use of the copyrighted works, and objectively verifiable number of customers lost as a result, Oracle presented evidence of the purported value of the intellectual property as a whole, elicited self-serving testimony from its executives regarding the price they claim they would have demanded in an admittedly fictional negotiation, and proffered the speculative opinion of its damages expert, which was based on little more than guesses about the parties’ expectations," she ruled.

Hamilton recommended that the damages be cut to just $272 million. If Oracle rejects this, SAP has the right to a retrial.

The fine cast a shadow over SAP’s otherwise strong recent financial performance. At $1.3 billion, it was roughly equivalent to all the profit the company has made so far this year.

Last month, an analyst from investment bank Matrix Group calculated that SAP grew application sales faster than Oracle in the most recent financial quarter, for the first time in nearly three years. "SAP is getting its act back together," said Matrix’s co-head of research Rajeev Bahl.