One of the most litigious companies in the valley is Oracle. It is currently in the throes of planning an appeal against a judgement over its Java product.
It is well known that HP and Oracle do not play nice in the corporate playground. Larry Ellison famously stated in 2010 that it would be “virtually impossible” for the two companies to work together in the future. This occurred after HP sued its former CEO Mark Hurd for taking a position as Oracle’s co-president after having resigned, reportedly under pressure from the HP board.
There is another high-profile and long-running legal case going on between HP and Oracle. This particular disagreement concerns alleged breach of contract. The root of this case hinges on Oracle’s decision in March of 2011 to drop Itanium support in all future product development. The crux of it rests on the interpretation of a clause in an agreement signed by the two companies in the wake of Oracle’s hiring of Mark Hurd.
The agreement settled the previously mentioned lawsuit filed by HP to block Hurd from taking the position with Oracle on the grounds of his knowledge of HP’s trade secrets and the unfair advantage he could provide to Oracle and its Sun hardware unit. This clause stated that “Oracle will continue to offer its product suite on HP platforms, and HP will continue to support Oracle products…on its hardware in a manner consistent with [the] partnership as it existed prior to Oracle’s hiring of Hurd.”
This led to Oracle’s reversing its end of life agreement and continuing to support and develop its databases on Itanium. Although prima facie, Oracle did indeed breach the agreement to support Itanium processors, it was, to be fair, based on sound business reasons. The writing was already on the wall for the Itanium processor. SAP, Red Hat, and Microsoft had already announced that they were discontinuing support for the chip in their products and applications. Oracle was only traveling a well-worn path.
All this occurred in 2012, when the case was put before a judge. At the time, no damages were awarded. Fast forward to 2016, and the case has finally been tried before a jury in the state court in San Jose, where HP was awarded $3 billion in damages after only five hours of deliberations. The jury members’ decision rested on their belief that Oracle’s actions were designed to hurt HP directly. Oracle intends to appeal this decision.
This is not the end of the fractious relationship between Oracle and HP, now HPE. In March of this year, Oracle filed a suit claiming that then-HP had been a partner in an illegal third-party support scheme with TERiX, from which Oracle had previously won $58M in damages, to provide Solaris support service to Oracle customers. TVP Strategy will be watching this along with the Oracle v. Google Java case and will keep you up to date.
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