Tuesday, January 31, 2012
Court Rejects Oracle's Attempt to Use Fraud Claim to
Undo Contract with HP
|You are sending an email that contains the article
and a private message for your recipient(s).
(At the moment, only Text is allowed...)
A court in California rejected Oracle's bid to use a
fraud claim to undo an agreement to support the
Itanium processor, that it is said to have made with
The rejected fraud claim was an a ttempt by Oracle to
get out of the contract it entered into with HP,
wherein it committed to continue to offer its product
suite on HP's server platforms.
"The alleged fraud did not prevent Oracle from
participating in the negotiations or deprive Oracle of
the opportunity to negotiate," Judge James P.
Kleinberg of the Superior Court of California, Santa
Clara County said in a ruling on Monday.
The Judge was referring to HP's settlement agreement
in 2010 with Mark Hurd, former CEO of HP, who later
joined Oracle as president. Although Oracle was not a
party to the previous litigation by HP against Hurd,
its participation in the Hurd litigation settlement
negotiations was extensive, he added.
Judge Kleinberg also ordered unsealed certain
sensitive documents that HP and Oracle had separately
filed to the court under seal.
"HP is pleased that the Superior Court of the State of
California, Santa Clara County, has rejected Oracle?s
attempt to use a fraud claim to undo its contract with
HP. We look forward to seeing the facts made public
that demonstrate how Oracle's March 2011 announcement
to no longer develop software for Itanium servers was
part of a calculated business strategy to drive
hardware sales from Itanium to inferior Sun servers.
This further demonstrates the fact that Oracle
breached its contractual commitment to HP and ignored
its repeated promises of support to our shared
customers, " HP said in a statement.
Oracle announced in March last year its decision not
to support servers running Intel's Itanium processors
on new versions of its products including its
database, claiming that the processors were nearing
HP, which uses the chip in its high-end servers, sued
Oracle in June before the Santa Clara county court.
Oracle claimed that HP had deliberately not disclosed
at the time of the Hurd settlement that it was about
to hire Leo Apotheker, former CEO of rival SAP, and
Ray Lane, Oracle's former president and chief
operating officer, both well-known Oracle adversaries.
Oracle also alleged that HP had fraudulently induced
it to enter into the agreement, as it withheld
information that it was secretly paying Intel US$88
million a year to artificially continue the Itanium
chip's life span and represent to its public its long
term commitment, when Intel otherwise would have
ceased development of the processor.
Oracle claimed that HP knew that if Oracle had known
about the secret arrangement with Intel, it would not
have agreed to software development around the
The ruling also refers to the claim that the Hurd
settlement included an agreement from Oracle not to
launch a hostile takeover bid on HP for 18 months
after the settlement agreement.
Oracle said it was pleased with the court ruling which
has rejected HP's attempt to hide the truth about
Itanium's certain end of life from its customers,
partners and own employees. "We look forward to seeing
all of the facts made public that demonstrate how HP
has known for years that Itanium is end of life," it
added in an apparent reference to the Judge's decision
not to seal certain documents.