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Oracle Told To Pay HPE £2.3bn For Itanium Damages

Tom Jowitt is a leading British tech freelance and long standing contributor to TechWeek Europe

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Another legal setback for Oracle after Californian jury orders it to pay hefty damages for Itanium cancellation

Oracle has been ordered by a jury in San Jose California to pay Hewlett-Packard Enterprise Co $3bn (£2.3bn). The decision comes after Oracle’s controversial decision to stop supporting its database running on HP’s Itanium servers.

This is now the second legal setback for Oracle in the space of two months, after it lost its mammoth Android lawsuit against Google in late May.

Hefty Damages

The jury decision to penalise Oracle has been a long time coming. Oracle announced in early 2011 that it was ending support for its database software on Intel’s Itanium processor. That cancellation angered both Intel and HP, and triggered a lawsuit for breach of contract.

HP was the main user of Intel’s Itanium processors and its executives blamed Oracle for plummeting sales of their high-end Integrity and NonStop systems.

Oracle for its part always maintained that Intel engineers had told them that they were soon going to end Itanium development in favour of their x86-based Xeon processors, a contention that was disputed by both HP and Intel executives at the time.

Legal cost patent law dollars money hutterstockDocuments unveiled by Oracle showed that HP had paid Intel almost $500 million (£321m) over several years to continue developing Itanium. But analysts said that was a common practice in the industry.

Unfortunately for Oracle, it lost the resulting lawsuit in 2012 and the court ruled that there had been a contract in place. Larry Ellison’s company was ordered to continue support Intel’s Itanium platform as long as HP continued to sell Itanium-based systems.

The court also ordered Oracle to pay an undetermined amount of damages to HP.

HP officials had demanded as much as $4 billion (£3bn) from Oracle for the damages, but neither side could agree and they subsequently returned to the courtroom.

But now a jury on Thursday has opted to award HP a hefty amount of damages, namely $3bn (£2.3bn).

“HP is gratified by the jury’s verdict, which affirms what HP has always known and the evidence overwhelmingly showed,” John Schultz, executive VP and general counsel of Hewlett Packard Enterprise, was quoted by Reuters as saying.

Bad Blood

He said that that Oracle’s decision to stop the software development “was a clear breach of contract.”

Oracle meanwhile has said it would appeal the verdict.

For years now there has been bad blood between HP and Oracle. Essentially, the relationship between the two firms disintegrated after Oracle made a move into the hardware business with the acquisition of Sun Microsystems back in 2010.

In that deal, Oracle inherited Sun’s SPARC/Solaris hardware business, which competed directly with HP’s Itanium-based Integrity systems.

Matters were not helped when Oracle decided to hire former HP CEO Mark Hurd. More strain was added when HP decided to replace Hurd with Leo Apotheker, who was the former CEO of Oracle’s bitter software rival SAP.

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