HP Sues Hurd Over Potential 'Irreparable Damage'

Hewlett-Packard Tuesday filed a lawsuit against former CEO Mark Hurd over potential damages he could cause in his new position as co-president of Oracle.

HP alleges in the lawsuit that Hurd, in his new role at Oracle, would not be able to avoid using HP trade secrets to compete with HP, and that "HP has been injured and faces irreparable injury."

Hurd last month departed HP after an investigation into what the company called improperly filed expenses and an improper relationship with a subcontractor.

Hurd late Monday was named a co-president at Oracle.

The lawsuit, a copy of which can be read here, was filed Tuesday in the Superior Court of the State of California in Santa Clara County.

In the lawsuit, HP alleges that Hurd will be in a "position with a competitor in which he will serve in a capacity that will make it impossible for him to avoid utilizing or disclosing HP's trade secrets and confidential information."

HP says Hurd was responsible for creating HP's strategic plans, including a plan to compete against HP's competitors, among them Oracle. "By working at Oracle, he cannot help but utilize and disclose HP's trade secrets and confidential information, including the trade secrets and confidential information contained in the FY 2010 and FY 2011 business plans."

Hurd had access to information from board meetings as well as operation, technology, strategic planning and customer meetings, in addition to reports from each of HP's business units, HP alleges.

He also had access to HP's competitive information. "On March 18, 2010, Hurd was presented, along with other members of the HP Board of Directors, with a highly confidential competitive internal analysis of Oracle," the lawsuit alleges.

In the lawsuit, HP alleges that Hurd breached or threatens to breach his contracts with HP by not providing sufficient notification about his new employer or position to HP, and that he has either misappropriated and/or threatens to misappropriate HP's trade secrets without HP's consent.

NEXT: HP Claims It Will Suffer Untold Damages

"Hurd cannot separate out HP's trade secrets and confidential information in performing his daily duties at Oracle," HP alleges.

As a results of these breaches of contract, HP alleges, "HP is threatened with losing customers, technology, its competitive advantage, its trade secrets and goodwill in amounts which may be impossible to determine."

HP's reaction to Hurd's move is similar to storage rival EMC's reaction to HP's hiring of David Donatelli in April 2009.

HP hired Donatelli, who at the time was president of EMC's Storage division responsible for the EMC storage platforms and related software businesses, to run its enterprise server and storage business.

HP eventually agreed that Donatelli, now HP's executive vice president and general manager for enterprise servers, storage and networking, would initially not be involved in HP's storage business to allay fears that Donatelli would improperly compete against his former employer.

One HP solution provider, who requested anonymity, said HP's lawsuit won't stand.

"[California] is a right to work state," the solution provider said. "This is about delaying the inevitable. This is about delaying and limiting the things that Mark will be allowed to do."

The solution provider said the relationship between HP and Oracle will look more and more like the intense rivalry between HP and Cisco.

"So here's a question for you: How many enemies can you have before it starts affecting your business?" the solution provider said. "Don't be surprised if HP stock doesn't drop further as people think this through."

HP, in a statement not attributed to any particular executive, wrote in a blog post, "Mark Hurd agreed to and signed agreements designed to protect HP's trade secrets and confidential information. HP intends to enforce those agreements."

HP and Oracle executives were not available to discuss the lawsuit.