Oracle Handed Setback in HP Itanium Case

IDG News Service — A court in California rejected Oracle's bid to use a fraud claim to undo an agreement to support the Itanium processor, that it is said to have made with Hewlett-Packard.

"The alleged fraud did not prevent Oracle from participating in the negotiations or deprive Oracle of the opportunity to negotiate," Judge James P. Kleinberg of the Superior Court of California, Santa Clara County said in a 21-page ruling on Monday.

The Judge was referring to HP's settlement agreement in 2010 with Mark Hurd, former CEO of HP, who later joined Oracle as president. Although Oracle was not a party to the previous litigation by HP against Hurd, its participation in the Hurd litigation settlement negotiations was extensive, he added.

Judge Kleinberg also ordered unsealed certain sensitive documents that HP and Oracle had separately filed to the court under seal.

Oracle announced in March last year its decision not to support servers running Intel's Itanium processors on new versions of its products including its database, claiming that the processors were nearing end-of-life.

HP, which uses the chip in its high-end servers, sued Oracle in June before the Santa Clara county court.

Oracle claimed that HP had deliberately not disclosed at the time of the Hurd settlement that it was about to hire Leo Apotheker, former CEO of rival SAP, and Ray Lane, Oracle's former president and chief operating officer, both well-known Oracle adversaries.

Oracle also alleged that HP had fraudulently induced it to enter into the agreement, as it withheld information that it was secretly paying Intel US$88 million a year to artificially continue the Itanium chip's life span and represent to its public its long term commitment, when Intel otherwise would have ceased development of the processor.

Oracle claimed that HP knew that if Oracle had known about the secret arrangement with Intel, it would not have agreed to software development around the platform.

The Judge's ruling also refers to the claim that the Hurd settlement included an agreement from Oracle not to launch a hostile takeover bid on HP for 18 months after the settlement agreement.

HP did not specifically comment on these two claims on Monday. It said in a statement after the ruling that it is "pleased" that the court rejected Oracle's attempt to use a fraud claim to undo its contract with HP. "We look forward to seeing the facts made public that demonstrate how Oracle's March, 2011 announcement to no longer develop software for Itanium servers was part of a calculated business strategy to drive hardware sales from Itanium to inferior Sun servers."

Oracle acquired Sun Microsystems in 2010.

Oracle said it was "delighted" with the court ruling which has rejected HP's attempt to hide the truth about Itanium's certain end of life from its customers, partners and own employees. "We look forward to seeing all of the facts made public that demonstrate how HP has known for years that Itanium is end of life," it added in an apparent reference to the Judge's decision not to seal certain documents.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com