Oracle's potential damages in its corporate-theft lawsuit against SAP have been reduced by US$500 million following an order from Judge Phyllis Hamilton, SAP said on Tuesday.

"The ruling of the Court has an immediate and demonstrable impact on Oracle's damages presentation, reducing the total by $500 million from $2.2 billion down to $1.6 billion," SAP said in a brief statement to reporters.

"This is the second such reduction by the Court and we are confident that, when the jury hears our case presentation, the outcome of the case will reflect the actual damages the limited actions of TomorrowNow had upon Oracle," it said.

A spokeswoman for Oracle declined to comment.

Oracle sued SAP after it learned its TomorrowNow division had been downloading Oracle software illegally from a customer support website and using it to win over Oracle customers. SAP has accepted liability and the trial is about how much damages it must pay.

Hamilton issued a "minute order" on Monday saying Oracle can't claim damages for money it lost from "cross-sell" and "up-sell" opportunities -- in other words, additional software it might have been able to sell to customers that it lost to TomorrowNow because of the stolen software.

Oracle can still claim for profits it lost as a direct result of the theft, and it can still ask for its "hypothetical license" -- the money SAP would have had to pay if it licensed the software from Oracle legally. Oracle CEO Larry Ellison testified in court Monday that Oracle could have charged $4 billion for the license.

SAP says it should only be liable for the profits Oracle lost as a direct result of the theft, not for the hypothetical license. It claims Oracle lost very few customers because of TomorrowNow and that SAP should have to pay only tens of millions of dollars.

The trial, in its second week, is expected to conclude by the end of the month.