HP, Oracle Continue Sparring Over Intel Itanium Case

 
 
By Jeffrey Burt  |  Posted 2012-05-15
 
 
 

Hewlett-Packard and Oracle are trading barbs over the latest step on the way to trial in their dispute over Intel€™s Itanium chip platform, with HP officials applauding a judge€™s decision to toss Oracle€™s request to throw out HP€™s case.

Santa Clara County Court Judge James Kleinberg in a court document May 14 outlined his reasons for refusing Oracle€™s summary judgment request, essentially saying that HP€™s position€”that an agreement laid out between the two companies in the 2010 settlement of a previous court obligated Oracle to continue supporting Itanium in its software development plans€”was reasonable enough to be considered at trial.

Kleinberg€™s order came two weeks after he refused requests by both companies to throw out key parts of the case, saying there was enough merit to all of them to let them go to trial.

At issue is the decision by Oracle executives last year to end software support of the Itanium platform, saying that Intel had plans to stop developing the high-end chip in favor of its much more popular Xeon processors. HP railed against the decision, calling it the latest in a series of moves to harm HP Itanium customers. HP estimates there are about 140,000 joint customers running Oracle software on HP€™s Itanium-based Integrity and NonStop servers.

The legal dispute is the most recent example of the deteriorating relationship between the one-time close partners that started with Oracle€™s purchase of Sun Microsystems and its hardware business, bringing it into direct competition with HP. The acrimony was further heightened when Oracle in 2010 hired ex-HP CEO Mark Hurd as president. HP sued, and officials have argued that in the settlement of that case, Oracle had agreed to continue supporting technologies that benefitted joint customers.

Oracle officials have argued that the language in the settlement doesn€™t rise to the level of an official agreement.

In his May 14 order, Kleinberg said that such interpretation should be decided in court, arguing that €œit is not unreasonable to interpret the Reaffirmation Provision as imposing a prospective obligation on Oracle to continue to offer products for HP€™s platforms; the plain language is readily susceptible to that interpretation. If the prior, existing obligation before [Mark] Hurd€™s hiring involved a clear and consistent practice in which Oracle offered its product suite on all HP platforms without written porting agreements or payments, then the Court sees no inherent contradiction in €˜reaffirming€™ that this arrangement will continue going forward.€

HP officials praised the decision, saying they were €œpleased that the Court ruled that the language in the HP/Oracle agreement can be interpreted to require Oracle to continue porting its software products to the HP Integrity platform, as Oracle did for years before the agreement. As the ruling states, Oracle€™s interpretation would make the agreement €˜illusory€™ and €˜should be rejected.€™ We look forward to trial, where the details of Oracle€™s deliberate, anti-customer business strategy to drive hardware sales from Itanium to inferior Sun servers will be revealed.€

In an email to the AllThingsD news site, Oracle attorney Dan Wall saw the decision in a different light.

€œHP cannot be happy with this decision,€ Wall wrote. €œThe Court did not accept HP€™s interpretation of the Hurd settlement agreement; in fact, it rejected out-of-hand the most recent version of HP€™s argument, which equated the contract with terms HP proposed, but Oracle rejected. HP€™s lawsuit, like Itanium itself, is living on borrowed time and will never succeed.€

Oracle executives have argued that Intel engineers informed them of Itanium€™s imminent demise, a statement that Intel officials€”including President and CEO Paul Otellini€”have denied, saying they have a product road map that stretches toward the end of the decade. Oracle has accused HP of false advertising for not telling Oracle or its customers that HP was paying Intel $88 million a year to continue development of Itanium.

In a court hearing earlier this month, Wall reportedly told Kleinberg that there was no chance of the two sides reaching a settlement in the case, where HP is looking for $4 billion in damages. The case is expected to go to trial late this month or in June.

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