Hewlett-Packard wins ruling against Oracle in server battle
A judge ruled that Oracle violated a contract by not continuing to provide new software for an HP computer server.
San Jose Mercury News
SAN JOSE, Calif. — In a legal tussle industry observers had billed as a battle between two tech titans, Hewlett-Packard won a major victory Wednesday when a judge ruled that Oracle violated a contract by not continuing to provide new software for an HP computer server.
The decision after several weeks of trial testimony before Santa Clara County Superior Court Judge James Kleinberg paves the way for a second trial to determine if Oracle should pay damages, as HP has alleged.
It is the second major recent legal defeat for Oracle against another Silicon Valley corporation. On May 31, a federal judge rejected its claim that Google had improperly used key elements of Oracle's software.
Oracle spokeswoman Deborah Hellinger said the company plans to appeal.
The trial before Kleinberg revolved around a settlement Oracle and HP negotiated after Oracle hired Mark Hurd as co-president in 2010, a month after he resigned as HP's chief executive after unproved harassment allegations stemming from his relationship with a contractor.
Fearing Hurd might give proprietary information to Oracle, HP filed suit, and the two companies worked out a settlement.
Oracle characterized the settlement as merely a general pledge of mutual cooperation, but HP claimed it was a contract requiring Oracle to keep making new versions of software for HP servers that use Intel's Itanium microprocessors.
When Oracle announced in March it would stop updating its software for the Itanium system, HP sued, claiming it could lose $4 billion in server sales through 2020 because of that decision.
Oracle, which countersued HP, argued that the server had a limited future because it believed Intel planned to discontinue the Itanium processor. Moreover, Oracle maintained it wouldn't have agreed to the settlement had it known HP would name Leo Apotheker as Hurd's replacement and former Oracle President Ray Lane as chairman.
Apotheker, whom Meg Whitman replaced at HP last year, had headed Oracle's software rival SAP, which Oracle CEO Larry Ellison had accused of scheming to misappropriate Oracle's software.
A jury ordered SAP to pay $1.3 billion in damages in 2010, but a judge reduced that amount, and a new trial in the dispute is scheduled for later this month.
In addition, Oracle has claimed in a court filing that Lane "had a well-documented animosity" toward Ellison, "traced to his firing from Oracle in 2000," although Lane said he resigned after a falling-out with Ellison.
Tensions between Oracle and HP have grown as they have become direct competitors in some areas.
In the past, HP mostly made computer hardware, while Oracle primarily produced software. But HP is now heavily pushing its software, and Oracle got into the hardware business with its 2010 purchase of Sun Microsystems.