Oracle Loses Bid to End HP Itanium Lawsuit

An appeals court rejects Oracle's efforts to have a lower court's ruling overturned, setting the stage for the penalty phase of the trial.

Oracle's attempt to end the lawsuit brought by Hewlett-Packard in the dispute over Intel's Itanium processor platform was shot down by a California appeals court, which rejected Oracle's request without comment.

The decision by California's 6th District Court of Appeals Jan. 31 means that the penalty phase of the trial—where a jury will decide how much Oracle will have to pay HP in damages for announcing it would no longer support Itanium in future software releases—will go forward, and that Oracle will be able to appeal everything from the trial after that, according to Reuters.

The case stems from a decision by Oracle executives that they would no longer develop software for Intel's Itanium chips, which power all of HP's high-end servers. Oracle officials said they had learned from Intel engineers that the giant chip maker was planning to end development of Itanium in favor of its more popular Xeon processors.

The decision drew a sharp rebuke from executives for both Intel and HP, who argued there were no plans to end development. HP officials accused Oracle of trying to force the 140,000 or so users who run Oracle software—particularly database applications—on HP's high-end Integrity and other servers to migrate to Oracle's SPARC/Solaris systems.

They also said that Oracle's decision violated an agreement between the two companies that both would continue supporting the others' products that were used by these joint customers. Oracle officials said the documents referred to by HP—a settlement of a lawsuit stemming from Oracle's hiring in 2010 of ex-HP CEO Mark Hurd—did not amount to an airtight agreement.

HP in 2011 sued, and Oracle counter-sued, claiming HP was not being honest with Oracle or its customers about the fate of Itanium, noting that HP was paying Intel millions of dollars to continue developing it. HP is by far the largest user of Itanium chips.

In August 2012, Judge James P. Kleinberg of the Santa Clara County Superior Court ruled in favor of HP, and ordered Oracle not only to continue support for HP's Itanium-based platforms, but to do so without charging HP. Oracle appealed, hoping to get the order overturned.

Now a jury will decide how much Oracle owes HP, which reportedly is seeking as much as $4 billion. Revenues in HP's Business Critical Systems unit—which includes the Itanium-based high-end servers—have seen a sharp decline over the past couple of years. HP officials attributed much of that to Oracle's Itanium announcement, which was forcing joint customers to decide whether to stay with HP hardware or Oracle software.

For the quarter that ended Oct. 31, 2012, revenues in HP's BCS unit fell 25 percent, according to the company.

In November 2012, Intel officials rolled out its latest Itanium chips, the Itanium 9500 Series—formerly called Poulson—saying that they offer better performance, scalability and energy efficiency, and are another step in the company's efforts to more tightly align Itanium chips with Xeon processors as part of its Common Platform strategy. They also talked about plans for the next-generation Itaniums, dubbed "Kittson."

As Intel unveiled the Itanium 9500 Series, HP officials announced that they had refreshed their Integrity systems with the new processors, adding a new Superdome 2, three new Integrity blade servers and a new entry-level, highly energy-efficient Integrity system.