Oracle To Pay HP Enterprise $3 Billion for Loss on Itanium Servers
A California jury awarded Hewlett Packard Enterprise (HPE) $3 billion in damages from Oracle Corp. yesterday. The jury found that Oracle breached a contract between the two companies resulting in lost revenues for HPE’s Itanium server line. The decision gave HPE the full amount in had sought in restitution from Oracle.
Jurors in state court in San Jose, California, arrived at the unanimous verdict after only five hours of deliberation, according to a report by the Wall Street Journal. Oracle, meanwhile, has said it plans to appeal the judgment.
The case stems from a 2011 decision by Oracle to end support for HP servers running the HP-UX operating system on Intel’s Itanium chips, including support for the company’s database and Linux distribution. The companies first went to court over the matter in 2012, at which time a judge determined that a contract had existed between them and ordered Oracle to resume support for the software.
Although Oracle had resumed support for the systems, HPE, which was spun out from its predecessor company Hewlett Packard, argued that the damage Oracle had done to the viability of its Itanium servers was irreversible. HPE argued in court that Oracle decided to cease support for the systems after moving into the server business itself following the acquisition of Sun Microsystems.
Oracle, for its part, argued that the Itanium chip was already near the end of its life cycle when it made the decision to end support for HPE’s servers.
"Five years ago, Oracle made a software development announcement which accurately reflected the future of the Itanium microprocessor," Dorian Daley, executive vice president, general counsel, and secretary at Oracle, said in a statement. "Two trials have now demonstrated clearly that the Itanium chip was nearing end of life, HP knew it, and was actively hiding that fact from its customers. Oracle never believed it had a contract to continue to port our software to Itanium indefinitely and we do not believe so today."
No Legal Luck for Oracle
Daley also said that any contractual obligations that did exist between the two companies were reciprocal, in which case HPE was also in breach of contract for its obligations to Oracle. Daley said the company plans to appeal both the original judgment and the size of the award.
Although the Itanium chip was once considered a promising technology, it has since fallen by the wayside in favor of other processors, although some systems based on the chip are still sold as specialty machines.
The decision is the second high-profile case to go against Oracle in recent weeks. In May, another California court found in favor of Google in a case in which Oracle had argued that the Internet search giant had infringed on some of its copyrights related to Java in building the Android mobile operating system. In that lawsuit, Oracle sought $9 billion in damages from Google. But the jury ruled that Google’s use of Java fell under "fair use" guidelines.
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