Bloomberg News

Oracle Free-Speech Appeal Delays HP Itanium Server Trial

April 08, 2013

A trial in Hewlett-Packard Co. (HPQ:US)’s dispute with Oracle Corp. over software support for servers running Intel Corp. (INTC:US)’s Itanium microprocessors will be delayed while Oracle appeals a ruling on a motion in the case.

The second phase of a trial was set to begin this week to determine whether Oracle breached the contract at issue, and if so, what amount Hewlett-Packard should be awarded in damages. That proceeding was put on hold after Oracle today challenged a decision by a state judge in San Jose, California, that it was late in filing a claim that Hewlett-Packard was violating its free-speech rights.

In the trial’s first phase, Superior Court Judge James Kleinberg agreed with Hewlett-Packard that Oracle made a commitment to develop software supporting servers that run on Itanium chips, under an agreement the companies reached over Mark Hurd’s transition from chief executive officer of Hewlett- Packard to co-president of Oracle.

“Oracle breached its contractual commitment to HP and ignored its repeated promises of support to our shared customers for the purpose of driving hardware sales from Itanium to Sun servers,” Palo Alto, California-based Hewlett-Packard said today in an e-mailed statement. “It is therefore not surprising that Oracle would make every attempt to postpone the trial and extend the uncertainty in the marketplace.”

Never Agreed

Oracle, based in Redwood City, California, acquired Sun Microsystems Inc. in 2010. The company argued in the first phase of the case that it never agreed to forfeit control over what software it can develop and what price it can charge. Oracle spokeswoman Deborah Hellinger declined to comment on the appeal.

In September, in response to Kleinberg’s ruling, Oracle said it would continue to develop software for computers that run on the Itanium microprocessors.

Oracle filed a motion to throw out the case based on free- speech claims and filed an immediate appeal when the trial court decided the motion was untimely. A state appeals court must now rule on that question before the trial can proceed.

Before the trial, Hewlett-Packard said it was seeking about $500 million in damages, according to a person familiar with the matter who didn’t want to be identified because the damages request is confidential.

The case is Hewlett-Packard Co. v. Oracle Corp. (ORCL:US), 11-cv- 203163, California Superior Court, Santa Clara County (San Jose).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editor responsible for this story: Peter Blumberg at pblumberg1@bloomberg.net


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