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Oracle to Pay $3B for Hewlett-Packard Contract Breach

by Reuters / / Source: Reuters
The Oracle logo is seen on its campus in Redwood City
REUTERS/Robert Galbraith/File Photo

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A California jury ordered Oracle to pay Hewlett-Packard $3 billion in damages in a case over HP's Itanium servers, an Oracle spokeswoman said on Thursday.

Oracle said it would appeal the verdict.

The Itanium processor is made by Intel. Oracle decided to stop developing software for use with HP's Itanium-based servers in 2011, saying that Intel made it clear that the chip was nearing the end of its life and was shifting its focus to its x86 microprocessor.

The Oracle logo is seen on its campus in Redwood City
REUTERS/Robert Galbraith/File Photo

But HP said it had an agreement with Oracle that support for Itanium would continue, without which the equipment using the chip would become obsolete.

In the first phase of trial in 2012, Santa Clara Superior Court Judge James Kleinberg ruled that there had been a contract. The jury on Thursday decided damages.

"HP is gratified by the jury's verdict, which affirms what HP has always known and the evidence overwhelmingly showed," John Schultz, executive vice president and general counsel of Hewlett Packard Enterprise, said in an e-mailed statement, saying that Oracle's decision to stop the software development "was a clear breach of contract."

In a statement, Oracle general counsel Dorian Daley said the company had been providing all its latest software for Itanium servers since Kleinberg's decision.

"Now that both trials have concluded, we intend to appeal both today's ruling and the prior ruling," Daley said.

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