HP Exec Describes Oracle Handshake Deal Over Itanium

The second day of the Hewlett-Packard v. Oracle lawsuit in California state Superior Court in San Jose, California revealed more testimony, this time from HP’s then-head of enterprise business, board of director member Ann Livermore.

The issue at hand is this: Did Oracle violate contract agreements when it decided to stop making new versions of database software for Intel’s Itanium processors that HP uses in its servers?

HP thinks so and is asking for damages totalling about $4 billion (£2.6bn).

Viable Contract

Santa Clara Superior Court Judge James Kleinberg will decide the first phase of the trial on his own. Phase 1 will focus specifically on whether there is a viable contract between HP and Oracle. If Judge Kleinberg decides the original contract stands, a jury then will decide whether Oracle violated the contract, and figure out what damages are due.

On 5 June, Livermore described in detail the negotiations that took place between Oracle Co-President Safra Catz and her regarding a settlement agreement involving the 2010 move of former HP CEO Mark Hurd to Oracle to be co-president with Catz. In particular, Livermore explained that the language grew out of both companies’ desire to preserve their relationship and to continue to work together as they had before.

After Hurd joined Oracle in late 2010, HP became concerned, Livermore said in Day 1 testimony. “I was concerned that Mark was leaving HP with ill will toward HP. My concern was that he knew our financials. He also knew our dependence on Itanium; he knew lots and lots of things,” Livermore said.

It was made clear that the HP-Oracle relationship was founded on Oracle porting its software to HP servers – essentially without any written agreements and without any payments between the parties. Oracle continues to rely on the four contracts that existed over the course of the parties’ 25-year relationship, Livermore said.

HP contends that this is a miniscule number when compared with the hundreds of instances in which Oracle ported its software to HP servers without a contract and without charge.

Fictional Reasons?

Livermore also said that it was fiction that Oracle decided to stop developing software for the Itanium microprocessor because it allegedly was nearing the end of its life. Livermore explained that Oracle’s position was baseless because the HP-UX/Itanium platform comprised about one-third of the high-end Unix market, was extremely profitable for HP, and that HP’s roadmap and its agreements with Intel extended the life of the Itanium roadmap toward the end of this decade.

Oracle, in its opening statement on 4 June, argued that HP’s actions immediately following the announcement proved that HP did not believe that Oracle had agreed to port its software to HP’s Itanium-based servers.

Livermore testified, however, that immediately after she learned about Oracle’s announcement that said it would no longer develop its software for Itanium servers, she called Catz to express her outrage over the announcement and that she informed Catz that Oracle had breached the Settlement Agreement signed by the parties just six months earlier.

Oracle has posted documents relating to the case here. They are regularly updated.

Expected schedule for next two days (this is subject to change):

• Wednesday, 6 June:  Mike Holston, HP’s former General Counsel, testifies: David Tucker, an HP software engineer, testifies (if time permits); Holston will testify on topics relating to the Mark Hurd lawsuit, the negotiation of the contract at issue, and related matters. Tucker will testify about the parties’ course of dealing regarding the porting of Oracle software to HP’s Itanium-based servers.
• Thursday, 7 June: Conclude Tucker (if necessary), conclude Ann Livermore, call Tim Aylott (if time permits).

Are you a patent expert? Take our quiz!