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HP, Oracle clash over what their Hurd deal's wording means

Opening arguments in HP's breach-of-contract suit focused on an agreement reached after Oracle hired ex-HP CEO Mark Hurd

Hewlett-Packard said Oracle committed itself to porting its core software products to future versions of Itanium in a 2010 partnership agreement with HP, while Oracle said that deal fell far short of a true contract, as the companies' lawyers gave opening arguments on Monday in a courtroom in San Jose, California.

HP sued Oracle for breach of contract last year after the database giant announced in March that it would stop developing new versions of its future products for the Itanium processor. Itanium powers HP's so-called Business Critical Systems hardware for highly demanding enterprise applications, but Oracle says the chip line is reaching the end of its life.

On Monday, the companies' lawyers faced off before Judge James Kleinberg in Santa Clara County Superior Court. Oracle co-President Safra Catz and HP board member and former enterprise business chief Ann Livermore, the main negotiators of that agreement, looked on in the courtroom. Livermore was set to testify later Monday. In the first phase of the trial, Kleinberg, without a jury, is to rule on whether the two companies had a valid contract.

HP's attorney, Jeff Thomas, focused in on the wording of the so-called Hurd Agreement, in which the companies reaffirmed their longstanding business partnership after Oracle hired former HP CEO Mark Hurd and HP sued Hurd for breaching a confidentiality agreement. Both he and Oracle's lead attorney focused in on a paragraph of the agreement that said Oracle would "continue to offer its product suite on HP platforms ... in a manner consistent with the partnership as it existed prior to Oracle's hiring of Hurd."

That clearly means Oracle has to keep porting its database, middleware and other key software the HP's HP/UX version of Unix for its Itanium-based Integrity servers, Thomas said.

"The language of the contract itself is perfectly consistent with HP's interpretation," Thomas said. "It cannot remotely be squared with Oracle's interpretation."

Oracle's lead attorney, Daniel Wall, called that clause of the deal "brief, breezy language" and said actual porting contracts are far more detailed, covering the scope, time period and monetary terms of an agreement, among other things. Catz, Livermore and the other high-level executives and lawyers who crafted the Hurd Agreement lack the knowledge to hammer out such a deal, Wall said. With all due respect to them, "they couldn't negotiate a porting agreement on a dare," Wall said.

Instead, the Hurd Agreement was chiefly a deal involving personnel, not software porting, Wall said. "It's a tiny fraction of this bargain," he said.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com


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