Oracle ordered to pay HP $3 bn in damages for breach of contract
01 Jul 2016
A San Jose (California) jury has ordered Oracle to pay computer manufacturer Hewlett Packard Enterprise (HPE) $3 billion (£2.25B) in damages for breach of contract to provide Itanium support in its namesake database and Linux distribution to HP's servers.
HP says Oracle broke an agreement to keep developing software for servers based on Intel's Itanium chips, while Oracle had argued that Intel had made it clear in 2011 that it was phasing out the chip type and that it didn't have a contract to keep developing the software forever.
Oracle unilaterally decided to drop support for Itanium systems running HP's HP-UX operating system in 2011. HPE (HP was split into two last year, with HPE retaining the interest in the server business) sued Oracle, claiming that it was in breach of a 2010 contract between the two companies in which the database firm promised to support HP's Itanium systems.
The jury's order comes four years after judge James Kleinberg originally decided the case in HP's favour in 2012. The judge required Oracle to fulfill its contractual obligations to support HP's Itanium systems and decided that HP was due to receive damages. Oracle resumed the software support in late 2012, but the damages portion was undetermined. The two companies were back in court some four years later to decide just what those damages should be.
"HP is gratified by the jury's verdict, which affirms what HP has always known and the evidence overwhelmingly showed," Reuters quoted HP executive vice president John Schultz as saying.
He also said Oracle's halting of Itanium software development was "a clear breach of contract."
HPE argued that dropping support for Oracle's important database software greatly hurt the commercial viability of its Itanium products, and that Oracle's actions were intended to drive sales of Oracle's own Sun hardware.
Oracle said it would appeal both Kleinberg's ruling that the agreement was a contract, and the jury's decision on damages.
