HP prevails in Itanium case against Oracle

Judge backs HP and orders Oracle to continue support and development for HP's Itanium-based systems

HP has won its lawsuit against Oracle over the software company's decision to discontinue development of its products on Itanium.

Judge James Kleinberg ruled that Oracle is contractually obliged to continue developing software for HP's Itanium-based servers, according to the terms of a settlement agreement concluded between the two companies on 20 September 2010.

"The settlement and release agreement entered into by HP, Oracle and [former HP CEO] Hurd on September 20, 2010, requires Oracle to continue to offer its product suite on HP's Itanium-based server platforms and does not confer on Oracle the discretion to decide whether to do so or not," Kleinberg wrote.

The two companies will return to court on 22 August. HP is expected to demand damages of around $500m (£320m) from Oracle for breach of contract.

Oracle released a statement as soon as the decision was announced.

"Last March, Oracle made an engineering decision to stop future software development on the Itanium chip. We made the decision as we became convinced that Itanium was approaching its end of life and we explained our rationale to customers here: www.oracle.com/itanium," said Oracle spokesperson Deborah Hellinger.

She added: "Nothing in the Court's preliminary opinion changes that fact. We know that Oracle did not give up its fundamental right to make platform engineering decisions in the 27 words HP cites from the settlement of an unrelated employment agreement. HP's argument turns the concept of Silicon Valley ‘partnerships' upside down. We plan to appeal the Court's ruling, while fully litigating our cross-claims that HP misled both its partners and customers."

[Turn to next page]

HP prevails in Itanium case against Oracle

Judge backs HP and orders Oracle to continue support and development for HP's Itanium-based systems

However, HP has attributed the sharp decline in its Itanium-based business to Oracle's decision in March 2011 to discontinue support for Itanium. In its fiscal second quarter to the end of April 2012, sales of Itanium-based systems fell by just under one-quarter to $421m (£270m).

HP, naturally, was jubilent at the decision and issued the following statement:

"...The Superior Court of the State of California, Santa Clara County, has confirmed the existence of a contract between HP and Oracle that requires Oracle to port its software products to HP's Itanium-based servers. We expect Oracle to comply with its contractual obligation as ordered by the Court."

It went on to list the five key areas in which the judge had ruled in HP's favour:

  1. In this action for declaratory relief, the Court finds in favor of HP and against Oracle on both the breach of contract and promissory estoppel causes of action brought by HP;
  2. The Settlement and Release Agreement entered into by HP, Oracle and Hurd on September 20, 2010, requires Oracle to continue to offer its product suite on HP's Itanium-based server platforms and does not confer on Oracle the discretion to decide whether to do so or not;
  3. The terms "product suite" means Oracle software products that were offered on HP's Itanium-based servers at the time Oracle signed the September 20, 2010 Settlement and Release Agreement, including any new releases, versions or updates of those products;
  4. Oracle's obligation to continue to offer its products on HP's Itanium-based server platforms lasts until such time as HP discontinues the sales of its Itanium-based servers;
  5. Oracle is required to port its products to HP's Itanium-based servers without charge to HP.