A U.S. judge discarded Oracle's $1.3 billion jury verdict against SAP AG, paving the way for a possible new trial in the years-long dispute.

In a ruling released on Thursday, U.S. District Judge Phyllis Hamilton called the $1.3 billion copyright infringement verdict against SAP "grossly excessive."

Oracle had proven actual damages of only $272 million, the Judge said, who called for a new trial unless Oracle agreed to accept that amount.

"The court finds further that the award of hypothetical license damages totaling $1.3 billion was contrary to the weight of the evidence, and was grossly excessive. Given SAP's concession of liability, and request for a remittitur, the court GRANTS the motion for a new trial as to actual damages, conditioned on Oracle?s rejection of a remittitur to $272 million. Should Oracle reject the remittitur, the court will order a new trial as to actual damages in the form of lost profits/infringer?s profits only. The court DENIES Oracle's "conditional motion" for a new trial," a court's document reads.

Oracle filed suit against SAP in March 2007, alleging copyright infringement, violations of the Computer Fraud and Abuse Act, and various state-law claims. After more than three and a half years of heated litigation, the case was tried to a jury in November 2010. Prior to the trial, SAP conceded liability as to all claims that had not previously been dismissed. Thus, the only issue for decision by the jury was the amount of the damages. On November 23, 2011, the jury returned a verdict, awarding Oracle $1.3 billion in "hypothetical license" damages.

Oracle can either accept the $272 million figure, ask for a new trial, or appeal Hamilton's ruling. SAP could also appeal the $272 million figure.