HP, Oracle Dispute Over Itanium Headed to Court

An Oracle lawyer in a court hearing reportedly claims a settlement between the two companies in the bitter case "isn’t going to happen."

Oracle executives, already wrapping up their high-profile court case with Google over the use of Java, most likely will soon find themselves back in the courtroom wrangling with former longtime partner Hewlett-Packard over Intel€™s Itanium platform.

The judge presiding over the bitter dispute has rejected efforts by both companies to throw out key parts of the case, and an Oracle lawyer reportedly said in court May 2 that there was no possibility of settling with HP, which apparently is seeking $4 billion in damages as a result of Oracle€™s decision last year to no longer develop software for Itanium-based servers. HP officials have blamed some of the revenue loss in its Business Critical Systems Group in recent quarters on Oracle's Itanium decision.

In the court hearing in San Jose, Calif., Oracle attorney Dan Wall said that a settlement €œisn€™t going to happen,€ Reuters reported. €œIn this case, it€™s not going to work out.€

Oracle executives claim there is no evidence to support the damages that HP is claiming.

The case is set for trial May 31.

At issue is Oracle€™s decision a year ago to end software development for the Itanium platform. Company executives said they made the decision based on conversations with Intel engineers, who they said told them that Intel was planning to end development of Itanium soon in favor of its x86 Xeon server chip line.

HP and Intel officials quickly disputed that claim, saying that Intel€™s product road map for Itanium showed development plans through the rest of the decade. HP eventually sued Oracle, claiming that the software maker€™s decision violated an agreement between the two companies to continue supporting products used by joint customers. HP estimates that at least 140,000 customers run Oracle software on Itanium-based servers from HP.

Forrester Research analyst Richard Fichera last year estimated that upwards of half of HP€™s high-end Superdome systems that have been sold are running Oracle database software.

HP executives said the two companies reached their agreement as part of the settlement of another legal dispute in 2010, over Oracle€™s decision to hire Mark Hurd as president after Hurd had resigned as HP€™s CEO over questions about his personal conduct. Oracle officials have disputed HP€™s claim of a contractual obligation to support Itanium, and have argued that they are being honest with customers about the future viability of the platform.

Oracle countersued HP, claiming among other things that HP was guilty of false advertisement for not telling Oracle or its customers that HP paid Intel $440 million to continue development of Itanium through 2012. The chip is aimed at high-end systems that compete with Unix servers and mainframes, and HP is by far the largest user of Itanium chips. The company has standardized its high-end Integrity and NonStop systems on Itanium.

In March, both companies sought pretrial wins in the case. HP filed requests asking the judge to rule that Oracle was contractually obligated to continue developing software for Itanium, and to dismiss Oracle€™s countersuit. Oracle in a filing disagreed with HP€™s claims.

In his 20-page decision May 1, Santa Clara County Judge James Kleinberg declined to dismiss any of the points of contention in the lawsuits, saying there was enough merit in all of them for them to go to trial.

The longtime relationship between Oracle and HP began to crumble when Oracle bought Sun Microsystems in 2010; Oracle inherited Sun€™s hardware business, putting it in direct competition with HP. It further deteriorated when Oracle hired former HP CEO Hurd, and then soon after when HP named Leo Apotheker, former CEO of Oracle enterprise software rival SAP, to replace Hurd as CEO.