Oracle wants HP-Hurd settlement tossed out

Oracle accuses Hewlett-Packard of fraud and deception in a cross-complaint filed Tuesday

Oracle is accusing Hewlett-Packard of fraud in connection with the companies' settlement agreement over the hiring of former HP CEO Mark Hurd, and wants the pact dissolved, according to a court filing Tuesday.

HP ousted Hurd last year after a scandal involving his relationship with a company contractor. Oracle quickly moved to hire Hurd as president, prompting HP to file a lawsuit, arguing that he could not perform his job effectively without violating a confidentiality agreement.

The companies' relationship grew even more strained when Oracle announced in March it would stop developing software for Intel's Itanium chips, which are used in high-end HP servers running the HP-UX OS. HP filed suit against Oracle in June over the matter.

The Hurd settlement agreement contains language obligating Oracle to continue porting its software to Itanium, according to HP, a contention Oracle has strongly denied.

Oracle continued to press that position in its cross-complaint filed Tuesday in a California state court, saying that while it agreed to include terms in the settlement "reaffirming" the companies' partnership, it only did so in the "belief they would mollify HP's paranoia without imposing any real obligations on Oracle."

The cross-complaint's main claims involve alleged deceptions by HP that Oracle contends should render the settlement void.

HP "signaled its desire to settle the Hurd action two days after it was filed," the filing states. "At the time, this appeared to be no more than an acknowledgement that HP had no chance of winning the case."

"In retrospect, the conclusion seems inescapable that HP had an additional hidden and more strategic agenda," it adds. "HP had been considering and was on the verge of hiring and elevating into its most senior leadership positions two people -- Léo Apotheker and Ray Lane -- who HP knew would ensure the complete destruction of what was left of the Oracle-HP relationship."

Apotheker was formerly CEO of Oracle's rival in the enterprise applications market, SAP, while Lane is an ex-Oracle president who had a famous falling-out with Oracle CEO Larry Ellison.

SAP is also facing a US$1.3 billion judgment in a corporate theft lawsuit Oracle had brought against it and a former subsidiary, TomorrowNow, which provided lower-cost support for Oracle applications.

"In the course of that litigation SAP acknowledged its guilt, and the evidence established not only Mr. Apotheker's involvement in SAP's illegal business practices but also his deep animus toward Oracle," the filing states.

"Knowing that Messrs. Apotheker and Lane were toxic to any 'partnership' with Oracle, HP tried to use the settlement of the Hurd litigation as a last-chance vehicle to, among other things, induce Oracle to make hard contractual commitments both to continue developing software for the Itanium platform and to lock in favorable pricing on Oracle's software for the Itanium platform," it adds.

Oracle never would have signed a settlement agreement had it known Lane and Apotheker were about to join HP, it states.

The cross-complaint charges HP with fraud, libel, intentional interference with contractual relations, and intentional interference with prospective economic advantage. It is demanding a public apology from HP, assorted damages and that the Hurd settlement be rescinded.

Also Tuesday, Oracle filed an answer to HP's original Itanium suit, denying all of its claims.

"Rather than focusing on what is right for our joint customers, Oracle is relying on invented excuses to cover up its blatant disregard for its legal obligations," an HP spokeswoman said in an e-mailed statement. "HP is resolved to enforcing Oracle's commitments to HP and our shared customers and will continue to take actions to protect its customers' best interests."

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com

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Tags business issuespersonnelhardware systemsCivil lawsuitslegalsoftwareHewlett-PackardOracle

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Chris Kanaracus

IDG News Service
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