UPDATED 12:18 EDT / JULY 01 2016

NEWS

Jury orders Oracle to cough up $3BN for violating support deal with HPE

The past few weeks have been rough on Oracle Corp.’s legal team. First, the database maker lost a high-profile copyright battle with Alphabet Inc. over the use of Java APIs in Android. And yesterday, a San Jose jury ruled that it must pay $3 billion in damages to Hewlett Packard Enterprise for breaking a hardware support agreement.

The dispute pertains to a since discontinued line of high-availability servers from HPE that was based on Intel Corp.’s legacy Itanium processors. Oracle had agreed to make its database and Linux distro available on the systems shortly after their launch, but stopped adding support to new versions in March 2011 following similar moves from other vendors. Red Hat Inc. abandoned the Itanium series back in late 2009, while Microsoft Corp. discontinued Windows support the following April.

The three software makers’ motivation for jumping ship appeared to be the same at first glance: Itanium failed to gain significant traction despite the best efforts of Intel and then-unified Hewlett Packard. Oracle seemingly determined that making new versions of its products compatible with the chip series simply isn’t worth the effort. But its cost saving attempt backfired when HP filed suit over the cancellation of their deal in 2011 and went on to win the case a few months later.

Today’s ruling brings the dispute to its conclusion. According to Bloomberg, HPE secured the $3 billion reward by convincing the jury that Oracle didn’t bail out of the agreement due to practical reasons, but rather as part of an effort by co-president Mark Hurd to hurt its business. The argument centered on the fact that Hurd served as the CEO of HP immediately before joining the database maker and left his position on bad terms. Not coincidentally, HPE’s initial 2011 victory hinged on a deal that it struck with Oracle as part of a separate lawsuit over Hurd’s departure. The agreement contained a sentence that indefinitely renewed the database market’s earlier commitments to support Itanium.

Oracle naturally plans to appeal the sentence, though the push will likely prove difficult. The jury reportedly ruled unanimously in favor of HPE after less than five hours of deliberation, a short amount of time for such a complex and long-running case.

Image via Pixabay

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