July 19, 2024


It's the Technology

Oracle really does owe HPE $3b after Supreme Court snub • The Register


The US Supreme Court on Monday declined to hear Oracle’s appeal to overturn a ruling ordering the IT giant to pay $3 billion in damages for violating a decades-old contract agreement.

In June 2011, back when HPE had not yet split from HP, the biz sued Oracle for refusing to add Itanium support to its database software. HP alleged Big Red had violated a contract agreement by not doing so, though Oracle claimed it explicitly refused requests to support Intel’s Itanium processors at the time.

A lengthy legal battle ensued. Oracle was ordered to cough up $3 billion in damages in a jury trial, and appealed the decision all the way to the highest judges in America. Now, the Supreme Court has declined its petition.

This brouhaha basically boils down to the interpretation of an agreement Oracle and HP struck when Oracle hired HP’s former CEO, the late Mark Hurd. That agreement acknowledged both companies had a “longstanding strategic relationship” and a “mutual desire to continue to support their mutual customers.” Oracle had said it “will continue to offer its product suite on HP platforms” while HP promised it “will continue to support Oracle products (including Oracle Enterprise Linux and Oracle VM) on its hardware.”

One might think that would be a commitment to providing Oracle’s database suite on HP’s Intel Itanium-powered systems.

Oracle, however, claimed, among other things, that HP had unfairly roped it into supporting the PC maker’s Itanium systems on a long-term basis while secretly knowing that Intel was no longer committed to its Itanium line of processors. When Oracle found out the Itanic was doomed, it declared it would no longer support the hardware. HP sued and won. The total damages awarded is a hefty price to pay, and Oracle argued the full amount wasn’t fair. 

Oracle argued it shouldn’t have to pay part of the penalties since it rested on comments that should have been protected by the First Amendment. “The California courts entered a $3 billion dollar damages award in this case — one of the largest civil awards in California history — that is based in part on conduct protected by the Petition Clause of the First Amendment,” it told [PDF] the Supreme Court.

The IT goliath made the same arguments in its petitions to the lower courts, the courts of appeal, and the Supreme Court of California before the Supreme Court of the United States denied it. The rejection from the highest US court leaves Oracle no wiggle room, and means the lawsuit has reached its final conclusion: Oracle will have to pay HPE $3 billion.

“We are pleased with the court’s order,” a HP spokesperson told The Register. A representative for Oracle declined to comment. ®


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