Hewlett-Packard Co. v. Oracle Corp.

239 Cal. App. 4th 1174, 2015 D.A.R. 10, 191 Cal. Rptr. 3d 807, 2015 Cal. App. LEXIS 754
CourtCalifornia Court of Appeal
DecidedAugust 27, 2015
DocketH039507
StatusPublished
Cited by29 cases

This text of 239 Cal. App. 4th 1174 (Hewlett-Packard Co. v. Oracle Corp.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hewlett-Packard Co. v. Oracle Corp., 239 Cal. App. 4th 1174, 2015 D.A.R. 10, 191 Cal. Rptr. 3d 807, 2015 Cal. App. LEXIS 754 (Cal. Ct. App. 2015).

Opinion

Opinion

RUSHING, P. J.

Plaintiff Hewlett-Packard Company (HP) brought this action against Oracle Corporation (Oracle) alleging that Oracle breached contractual and other duties by announcing that it would no longer make its software products compatible with certain HP hardware products. After the trial court found in a bifurcated trial that Oracle was indeed obligated to adapt its products to the HP systems, and on the very eve of a trial on the questions of breach and remedy, Oracle brought a motion under the antiSLAPP statute, Code of Civil Procedure section 425.16 (§ 425.16), challenging one aspect of HP’s proof of damages. The trial court denied the motion as untimely. Oracle immediately appealed, bringing all further proceedings to a halt. In a pattern that has become all too familiar to the appellate courts of this state, the appeal, like the motion engendering it, is utterly without merit. The motion was late under any reasonable construction of the facts, and it was quite properly denied because it could not possibly achieve the purposes for which the anti-SLAPP statute was enacted. We will therefore affirm, declining to assess sanctions against Oracle only because we do not wish to further delay the long-overdue trial of the merits of this action.

Background

A. History of Cooperation in the Mission Critical Enterprise Server Market

For many years prior to 2010, Oracle and HP cooperated in the market for servers variously characterized as “high performance,” “high-end enterprise,” and “mission critical.” Many of HP’s sales in this category involved machines utilizing the Itanium processor, a product of Intel Corporation. According to an HP expert witness whose report Oracle cites on another point, HP sells two servers utilizing the Itanium processor — “Integrity” and “Super-dome.” The servers, with the HP-UX operating system — a proprietary derivative of Unix — were adapted “to perform mission-critical processes, such as large-scale technical, government, or business computing. Customers with these mission-critical computing needs . . . tend to be large businesses, *1179 universities, and government agencies.” Oracle sold and supported software, including its industry-dominant database program, that it “ported” to run on these and competing systems. 1 The trial court found the relationship to have been “profitable for both parties.”

B. Acquisition of Sun; Hiring of Hurd; Ensuing Suit; Hurd Agreement

In 2010 this seemingly harmonious relationship was shaken by two events. First, in January, Oracle acquired Sun Microsystems, whose products included servers built around its SPARC processor and typically running Solaris, its own Unix-based operating system. The acquisition of these assets made Oracle a natural competitor with HP in the mission critical server market. As the trial court wrote, “This was a potential sea change in the relationship between the parties.”

Then, about seven months after Oracle acquired Sun, a well-publicized chain of events resulted in the resignation of HP’s chief executive officer, Mark Hurd, at the request of HP’s board. A month later, Oracle hired Hurd as its co-president.

Expressing concern that Hurd could use HP trade secrets to the unfair advantage of Oracle — particularly in exploiting the newly acquired Sun assets to compete with HP — HP filed suit against Hurd. The dispute was quickly settled by a written agreement in late September 2010, between HP and Oracle (the Hurd agreement). Its first enumerated paragraph, entitled “Reaffirmation of the Oracle-HP Partnership,” states, “Oracle and HP reaffirm their commitment to their longstanding strategic relationship and their mutual desire to continue to support their mutual customers. Oracle will continue to offer its product suite on HP platforms, and HP will continue to support Oracle products (including Oracle Enterprise Linux and Oracle VM) on its hardware in a manner consistent with that partnership as it existed prior to Oracle’s hiring of Hurd.”

C. Cessation of Porting; Initiation of Suit

According to the trial court’s statement of decision, Oracle issued a press release on March 22, 2011 — some six months after entering the Hurd agreement — stating that it had “decided to discontinue all software development on the Intel Itanium microprocessor.” 2 This suggested that Oracle would *1180 no longer port new versions of its software products to run on HP’s Itanium systems. Any doubt on that score was eliminated when, as the court found, “Oracle identified on its website the current versions of its major products that were available on Itanium and the next versions of those products that would not be available on Itanium.” Oracle apparently indicated, at or about the same time, that new versions of its software would continue to be “made available” on the competing “IBM Power and Sun S[PARC]” platforms.

On June 15, 2011, HP filed the complaint in this action alleging, among other things, that Oracle’s announced refusal to continue porting its software to Itanium constituted a breach of the Hurd agreement, a violation of assurances made enforceable by promissory estoppel, and a breach of the covenant of good faith and fair dealing. It prayed for a declaration that Oracle was under a duty to continue porting its products to Itanium, for a decree compelling Oracle to specifically perform that obligation, and for damages. Oracle filed a cross-complaint and HP demurred. Oracle filed an amended cross-complaint asserting that the Itanium platform was doomed and that HP had artificially propped it up by making secret payments to Intel, thus misleading the public and Oracle as to its future viability. HP also demurred to this pleading, with results not disclosed by the record. The trial court deemed the matter a complex case. The parties filed cross-motions for summary judgment or summary adjudication, which the court apparently denied.

D. Finding Against Oracle in Phase 1; Vow to Appeal

The court conducted a bench trial under HP’s declaratory relief cause of action on the question whether Oracle was under a duty to continue porting its products to Itanium. On August 1, 2012, the court issued a tentative ruling to the effect that Oracle was under such an obligation by virtue of both the Hurd agreement and other assurances Oracle had given to HP.

On the day the court issued its tentative ruling, Oracle responded with a press release framed as a quotation from an Oracle spokesperson. It stated that “ ‘[n]othing in the court’s preliminary opinion change[d] th[e] fact’ ” that, as asserted in Oracle’s March 2011 press releases, “ ‘Itanium was approaching its end of life.’ ” The Hurd settlement was dismissed as “ ‘an *1181 unrelated employment agreement’ ” in which Oracle had not “ ‘give[n] up its fundamental right to make platform engineering decisions.’ ” The press release concluded, “ ‘We plan to appeal the Court’s ruling while fully litigating our cross claims that HP misled both its partners and customers.’ ”

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239 Cal. App. 4th 1174, 2015 D.A.R. 10, 191 Cal. Rptr. 3d 807, 2015 Cal. App. LEXIS 754, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hewlett-packard-co-v-oracle-corp-calctapp-2015.