HP Wins Itanium Court Case Against Oracle

Itanium-based servers

Oracle immediately vowed to appeal the decision "while fully litigating our cross claims that HP misled both its partners and customers," the company said in a statement attributed to spokesperson Deborah Hellinger.

The decision by Judge James Kleinberg of the Superior Court of California, County of Santa Clara, is the latest development in what's become a bitter dispute between one-time Silicon Valley allies HP and Oracle.

[Related: The 10 Ugliest Legal Disputes of 2011 ]

The judge's 43-page ruling, technically a preliminary "proposed statement of decision" that is not yet a final court order, follows 12 days of testimony in a trial that began May 31 and concluded on June 26.

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Oracle announced in March 2011 that it would no longer develop its software for Itanium, an Intel processor HP uses in some of its server lines. Oracle has taken the position that Itanium is nearing the end of its life – a fact Oracle said HP is trying to hide to preserve its Itanium-related business as long as possible.

HP filed a breach-of-contract suit arguing that Oracle had committed to continue supporting Itanium as part of a Sept. 20, 2010, settlement of an earlier lawsuit related to Oracle's hiring of former HP CEO Mark Hurd. HP filed that suit charging that Hurd risked disclosing HP trade secrets to Oracle. The interpretation of the "settlement and release agreement" that resolved that dispute was at the heart of this summer's trial.

"Oracle is required to port its products to HP's Itanium-based servers without charge to HP," Kleinberg said in the conclusion to his decision. "Oracle's obligation to continue to offer its product suite on HP's Itanium-based server platforms last until such time as HP discontinues the sale of its Itanium-based servers."

The judge said the Sept. 20, 2010, settlement and release agreement requires that Oracle continue to support HP's Itanium products "and does not confer on Oracle the discretion to decide whether to do so or not."

HP quickly issued a statement with the headline "HP Wins Court Ruling In Itanium Litigation" that called the judge's proposed ruling "a tremendous win for HP and its customers." The ruling, HP said, "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 obligations as ordered by the court."

Oracle, in its statement, said its "engineering decision" to stop developing software for the Itanium chip was made "as we became convinced that Itanium was approaching its end of life."

"Nothing in the Court's preliminary opinion changes that fact," Oracle said. "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."

This first phase of the trial did not deal with the issue of whether Oracle owes HP any damages in the case.

While Oracle and HP were once technology allies, their relationship has soured since early 2010 when Oracle acquired Sun Microsystems, putting it into more direct competition with HP.