A California judge on Wednesday ruled in favour of Hewlett-Packard's claim that Oracle is contractually obligated to develop software for HP's Itanium server products.
A damages phase in front of a jury is still pending in the case, with HP reportedly seeking up to $4 billion (£2.56 billion) in damages from Oracle following the latter company's decision more than a year ago to stop porting new software to HP's Itanium servers.
HP sought redress from the California state court after Oracle announced in March 2011 that it was pulling the plug on development for Intel's 64-bit Itanium chip. HP contended that an agreement related to Oracle's 2010 hiring of former HP CEO Mark Hurd's obligated its fellow Silicon Valley tech giant to continue making new versions of its database software for HP's Itanium-based servers.
Hurd was asked by HP's board of directors to resign nearly two years ago in the wake of a scandal involving allegedly falsified expense reports and an HP marketing contractor who sued, and later settled with, Hurd over allegations of sexual harassment. His subsequent hiring by Oracle as a co-president just a month later required negotiations between the two companies over Hurd's non-disclosure agreement with HP and how his close knowledge of HP's business would be restricted so as to protect his former company.
Oracle, also embroiled in an Android patent fight with Google that didn't go its way earlier this year, was ordered by Judge James Kleinberg to continue making software products for HP's Itanium servers free of charge "until such time as HP discontinues the sales of its Itanium-based servers."
The requirement covers all "Oracle software products that were offered on HP's Itanium-based servers at the time Oracle signed the 20 September 2010 Settlement and Release Agreement, including any new releases, versions or updates of those products," Kleinberg wrote in his opinion.
"Today's proposed ruling is a tremendous win for HP and its customers. The Superior Court of the State of California, Santa Clara County, has confirmed the existence of a contract between HP and Oracle that requires Oracle to port its software products to HP's Itanium-based servers. We expect Oracle to comply with its contractual obligation as ordered by the Court," HP said in a statement after the ruling.
Oracle had argued that its agreement over Itanium software development "was settling an employment dispute, nothing more" and thus shouldn't be binding, noted Kleinberg, who likened that line of defence "to the Seinfeld sitcom" before writing in his opinion that "Oracle's argument does not square with the law and the facts."
Oracle said it would appeal the ruling.
"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. HP's argument turns the concept of Silicon Valley 'partnerships' upside down," an Oracle spokesperson said, according to the The Wall Street Journal.
The spokesperson also reiterated the company's claim that Intel intended to discontinue its Itanium product line and that HP knew about this months before Oracle.
In June, Oracle issued a press release related to the legal dispute with HP stating, "We believe that HP specifically asked Oracle to guarantee long-term support for Itanium in the September of 2010 agreement because HP already knew all about Intel's plans to discontinue Itanium, and HP was concerned about what would happen when Oracle found out about that plan."
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