Judge: Oracle must remain on Itanic

Upholds HP's breach of contract claim


A California court has ruled that Oracle is contractually obligated to produce software for Hewlett-Packard's Itanium-based servers and must continue to do so for as long as HP sells them.

The ruling issued on Wednesday by Judge James Kleinberg in San Jose is the latest chapter in a bitter, ongoing struggle between the two Silicon Valley giants over whether Oracle had the right to stop developing for Intel's high-end server chips.

"Today's proposed ruling is a tremendous win for HP and its customers," HP said in a statement. "We expect Oracle to comply with its contractual obligation as ordered by the Court."

Specifically, the judge ruled in favor of HP's claims of breach of contract and promissory estoppel. The latter is a legal term that amounts to one party going back on a promise made when the other party is relying on the promise.

Under the terms of the ruling, Oracle will be required to continue to offer Itanium versions of any and all of its products that were available on the architecture as of September 20, 2010, the date of the Settlement and Release Agreement between Oracle, HP, and former HP CEO Mark Hurd.

The ruling specifies that Oracle must offer "any new releases, versions, or updates" of the software, and that it may not charge HP anything to produce it.

In a statement, Oracle representative Deborah Hellinger responded that Oracle has not wavered in its position that HP has overstated the terms of its contract, saying, "HP's argument turns the concept of Silicon Valley 'partnerships' upside down":

Last March, Oracle made an engineering decision to stop future software development on the Itanium chip ... 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.

If the decision stands, the case will next advance to a jury trial to determine whether Oracle breached its contract by stopping development on Itanium, and if so, whether HP is owed any damages. HP is reportedly seeking $500m.

The judge said both parties have 15 days to appeal the decision. Oracle has said it will do so. ®

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