Hewlett-Packard Company (NYSE:HPQ) Wins Court’s Decision, Oracle (ORCL) Needs to Follow Contract Agreements

A court in California submitted its decision of contractually obligating Oracle Corporation(NASDAQ:ORCL) to continue developing software for Hewlett-Packard Company's (NYSE:HPQ) servers based on Itanium.

As per reports on early NASDAQ GS stock market trading in New York, Oracle shares slid 1.65% to $29.82. On the other hand, on the New York Stock Exchange, Hewlett Packard slipped to 52-week low of $17.45, down 1.15%.

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Both Oracle and Hewlett Packard have been given 15 days to file objections to the decision presented by James Kleinberg, Judge of Superior Court, San Jose. Oracle has stated that it is planning on placing an appeal. If the ruling stands, the lawsuit will proceed to a jury trial in which HP will seek a damage amount of $500 million for breaching the contract.

The court agreed with HP that Oracle is signed a contract to support servers that operate on Itanium chips of Intel Corp. both the companies saw the transition of Mark Hurd from the post of Chief Executive Officer of HP to co-president of Oracle.

According to the conditions of the agreement that involves Oracle, HP and Hurd, Oracle needs to serve for HP’s Itanium-based servers. Also, it is not upon to Oracle to decide to leave the contract midway. The judge has asked both the companies to be back in the court on 22nd August to work on the second phase of the case.

Prior to the trial, HP was seeking around $500 million on damages. The company had estimate that it should be awarded with more than $4 billion damage amount without the order necessitating Oracle to continue supporting the HP severs.

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HP’s executive vice president, Dave Donatelli, mentioned in an conference that the Itanium hardware decline was due to Oracle’s decision to stop developing software for the platform.

Oracle spokeswoman, Deborah Hellinger had said in an email that the company had decided to stop developing software for Intel’s Itanium chip as Itanium was seemingly nearing its end of life.

Based in Redwood City, California, Orcale has denied all claims made by HP and said that it never agreed to forfeit control over the software it will develop and the respective charges.