Judge Rejects Oracle's Fraud Claims Against HP In Itanium Case

A California state judge handed Oracle a defeat Monday in its ongoing legal battle with Hewlett-Packard over the Itanium processor, rejecting Oracle's fraud claims against HP.

The judge also rejected efforts by the two companies to seal documents in the case, a decision that Oracle trumpeted as a victory.

In March 2011 Oracle said it would discontinue developing its software for Intel's Itanium, arguing that the processor line was nearing end of life.

HP uses Itanium in some of its server products and HP has charged that Oracle's decision was related to Oracle's January 2010 acquisition of Sun Microsystems, a move that instantly put Oracle in direct competition with HP.

HP sued Oracle in June 2011, claiming that Oracle had committed to support Itanium in a settlement the two companies reached in September 2010 stemming from a lawsuit HP filed against Mark Hurd, the company's former CEO, after Oracle hired Hurd as co-president.

Oracle has claimed that HP duped it into the agreement by concealing the fact that it planned to hire former SAP CEO Leo Apotheker as the new HP CEO and Ray Lane, a former Oracle executive, as the company's chairman. Oracle argued that hiring Apotheker and Lane would be "toxic" to HP's relationship with Oracle.

Oracle's fraud claims also included the argument that HP withheld information that it was paying Intel $88 million a year to continue manufacturing Itanium chips.

Oracle has said in court documents in the Itanium case that it would never have signed the Hurd agreement had it been aware of those facts.

Monday Judge James P. Kleinberg of the Superior Court of California, Santa Clara County, dismissed Oracle's fraud claims in the case. "The alleged fraud did not prevent Oracle from participating in the negotiations or deprive Oracle of the opportunity to negotiate," the judge wrote in a 21-page ruling.

"HP is pleased that the Superior Court of the State of California, Santa Clara County, has rejected Oracle's attempt to use a fraud claim to undo its contract with HP," HP said in a statement.

"We look forward to seeing the facts made public that demonstrate how Oracle's March 2011 announcement to no longer develop software for Itanium servers was part of a calculated business strategy to drive hardware sales from Itanium to inferior Sun servers. This further demonstrates the fact that Oracle breached its contractual commitment to HP and ignored its repeated promises of support to our shared customers."

Judge Kleinberg also unsealed court documents in the case, which the parties had sought to keep secret because of potential harm to customers and disclosure of competitive information.

Oracle, in a statement, portrayed that decision as a victory. "Oracle is delighted that the Superior Court of the State of California, Santa Clara County, has rejected HP's attempt to hide the truth about Itanium's certain end of life from its customers, partners and own employees. We look forward to seeing all of the facts made public that demonstrate how HP has known for years that Itanium is end of life."

The Itanium case is scheduled to go to trial in April.