HP V Oracle - Amended Cross Complaint

1 LATHAM & WATKINS LLP 2 3 4 5 6 7 8 9
Daniel M. Wall, SBN 102580 Alfred C. Pfeiffer, Jr., SBN 120965 Sadik Huseny, SBN 224659 505 Montgomery Street, Suite 2000 San Francisco, California 94111 Telephone: 415.391.0600 Facsimile: 415.395.8095 ORACLE CORPORATION Dorian Daley, SBN 129049 Deborah K. Miller, SBN 95527 500 Oracle Parkway M/S 5op7 Redwood City, CA 94070 Telephone: 650.506.5200 Facsimile: 650.506.7114 Oracle Corporation
10 Attorneys for Defendant and Cross-Complainant 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

ATTORNEYS AT LAW SAN FRANCISCO
SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SANTA CLARA HEWLETT-PACKARD COMPANY, Plaintiff, v. ORACLE CORPORATION, Defendant. CASE NO. 1-11-CV-203163 Action Filed: Trial Date: June 15, 2011 April 2, 2012
ORACLE CORPORATION, Cross-Complainant, v. HEWLETT-PACKARD COMPANY, Cross-Defendant.
ORACLE CORPORATIONS AMENDED CROSS-COMPLAINT AGAINST HEWLETTPACKARD COMPANY FOR (1) VIOLATION OF THE LANHAM ACT, 15 U.S.C. 1501 ET SEQ.; (2) VIOLATION OF CAL. BUS. & PROF. CODE 17500 ET SEQ.; (3) VIOLATION OF CAL. BUS. & PROF. CODE 17200 ET SEQ.; (4) DEFAMATION LIBEL; (5) INTENTIONAL INTERFERENCE WITH CONTRACTUAL RELATIONS; (6) INTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE; AND (7) FRAUD / EQUITABLE RESCISSION
Assigned for all Purposes to The Honorable James P. Kleinberg DEMAND FOR JURY TRIAL
EXHIBIT A CONDITIONALLY FILED UNDER SEAL IN ITS ENTIRETY

ORACLE CORPORATIONS AMENDED CROSS-COMPLAINT AGAINST HEWLETT-PACKARD COMPANY CASE NO. 1-11-CV-203163
Cross-Complainant Oracle Corporation (Oracle) alleges against Cross-
2 Defendant Hewlett-Packard Company (HP) as follows: 3 4

1. PARTIES Cross-Complainant Oracle is, and at all times material to this action was, a
5 Delaware corporation with its principal place of business and headquarters in Redwood City, 6 California. 7
2. Cross-Defendant HP is, and at all times material to this action was, a
8 Delaware corporation, with its principal place of business and headquarters in Palo Alto, 9 California. 10 11
3. VENUE Venue is proper in Santa Clara County pursuant to California Code of
12 Civil Procedure section 395.5 because HPs principal place of business is situated in this County, 13 the contract at issue was made and was to be performed in this County, and the conduct giving 14 rise to HPs liability arose in this County. 15 16
4. NATURE OF THE ACTION Oracle brings this amended cross-complaint seeking injunctive relief and
17 damages for unlawful injuries caused by HP. As set forth below, HP engaged in a multi-year 18 campaign of secrecy and deception designed to conceal the truth about Intel Corporations 19 commitment to the Itanium microprocessor in order to extend its Itanium server business at 20 Oracles expense and reap large profits from its own unsuspecting installed base of Itanium 21 users. HP made false and misleading statements to Oracle, the public, analysts, the press, 22 customers, potential customers and investors, all with the intent to mislead these audiences about 23 the vitality and future prospects of Itanium and material amounts of HPs associated revenue 24 stream. When Oracle announced the truth about Itaniumthat Intels strategic focus was not on 25 Itanium but on its competing Xeon line of microprocessors, and that Itanium was nearing its end 26 of lifeHP reacted with a ferocious effort to foment false customer outrage and to vilify and 27 defame Oracle, all to buy itself more time to milk its customer base and falsely blame Oracle for 28 Itaniums demise. HPs false and misleading public statements violate section 43 (a) of the

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1 Lanham Act, 15 U.S.C. 1125(a), and California statutory and common law, in that they 2 constitute false advertising, false statements of association, unfair competition and defamation. 3
5. Oracle also brings this cross-complaint because HP fraudulently induced
4 Oracle to enter into an agreementthe Hurd Agreement1in the context of a lawsuit HP filed 5 against its former CEO, by concealing and misrepresenting the truth about Itanium, and by 6 concealing material information about HPs imminent intent to hire Oracle antagonists to high7 level HP executive positions. HPs actions constitute extrinsic fraud. Oracle hereby seeks 8 rescission of the Hurd Agreement. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

FACTUAL ALLEGATIONS CONCERNING HPS MISREPRESENTATIONS AND DECEPTIONS CONCERNING INTELS COMMITMENT TO ITANIUM A. HPs Campaign of Deceit Regarding the Status and Prospects of Itanium 6. This cross-complaint arises out of a long-term effort by HP to prop up its
Itanium-based computer server businessservers ironically sold under the name Integrity. HP has deliberately misrepresented the current status and limited future roadmap for Intels Itanium microprocessors, the chips that power Integrity servers. 7. Integrity is one of HPs products marketed for customers running mission
critical applications. A broad range of computer servers handle mission critical loads, but HP has promoted the notion that Integrity and some of its higher-end Xeon servers are business critical servers, which is also the name HP has given to its business unit (BCS) responsible for Itanium. Any customer looking to support the software applications handling the enterprises heaviest and/or most important workloads will be very sensitive to the future prospects for the technologies embedded in the servers it chooses. In general, such customers will not buy a server whose underlying technologies are nearing their end of life, meaning the point of time when the technologies are being phased out in favor of newer and better alternatives. Technology companies often publish product roadmaps to indentify planned new innovations and time frames for those innovations. Any indication that the technologys sponsor is not
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Ex. A (Hurd Agreement (Sept. 20, 2010)).
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1 releasing significant new innovations or is not devoted to a long, open-ended commitment can 2 devastate new sales of existing products and speed migration of existing customers to new 3 platforms. 2 Importantly, customers want their major technology providers to be independently 4 committed to the platform. In the case of Itanium, that means that customers want assurance that 5 Intel believes in the platform on its own merits and is fully and enthusiastically committed to it. 6
8. By early 2008, if not earlier, HP learned that Intel wanted to end Itanium
7 development and production. The chip had always been a disappointment (in absolute terms and 8 relative to the markets aspirations for it), and by 2008 Intel was achieving with its Xeon x869 based chips the performance required to support significant or critical demands at a far lower 10 cost for customers and a lower cost of production for Intel. In other words, Xeon became Intels 11 desired solution for so-called business critical systems, and a result, Intel wanted out of 12 Itanium. HP internal documents note numerous reasons for Intels decision: so Intel could focus 13 on Xeon, so it could stop losing money on Itanium, and so it could put an end to the huge 14 opportunity cost that Itanium represented to Intel by distracting Intels engineering resources. 15 But Intels decision to abandon Itanium threatened HP because HPs proprietary HP-UX 16 operating system and Integrity servers only ran on Itanium chips. Without Itanium, HP-UX and 17 Integrity were obsolete. HP faced two profoundly negative consequences. 18
9. First, HP-UX was (and is) HPs only proprietary operating system for its
19 servers, and HP uses it only for its Itanium-based servers. Today and into the future, mission 20 critical computing is about open standards, non-proprietary operating systems like Linux, and 21 many options for consumers. HP, however, wanted to keep customers on its proprietary HP-UX 22 operating system because it is an effective customer control device. The significant installed 23 base of HP-UX customers are securely locked-in to HP, with ninety percent buying HP-UX 24 support contracts from HP which generate billions of dollars of HP profit every year. Without 25 Itanium, and because HP decided not to develop HP-UX for its Xeon-based servers, HP knew its 26 27 28

Importantly, vendors routinely continue to support older versions of products well after their end of life and typically for many years afterwards. End of life refers to the end of the sales side of the business. That is the case here as well.
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1 support revenues from HP-UX would collapse in a few years. Customers would most likely 2 migrate to Xeon systems and non-proprietary operating systems like Linux, and HP would get 3 far less support revenues because, among other things, (1) Itanium systems are more expensive 4 than x86 systems, (2) there are fewer engineers with Itanium experience than x86 systems, thus 5 increasing the labor costs for Itanium support, and (3) the attach rate for support contracts 6 (i.e., incidence at which customers will actually purchase support for the hardware) is much 7 higher on HP-UX on Itanium than on non-proprietary operating systems such as Windows and 8 Linux on x86. So, even if HP found some way to sell alternative servers to these customers, 9 there was no way for HP to replace the profitable HP-UX support revenues. 10
10. Second, HP had made HP-UX on Itanium its flagship, preferred offering
11 for its so-called mission critical computing. HP has long been socializing the marketplace that 12 Itanium servers running HP-UX were the best way to handle customers large or complex 13 applications and workloads. As a result of those efforts, Integrity servers were clearly perceived 14 as the best HP products for such customers. Internally, HP realized that on account of its own 15 efforts to promote Integrity, it had essentially gone all in on the product for these customers, 16 such that without Integrity it would not be viewed as competitive in this space any longer. At the 17 very least it would be far less competitive. Intels desire to stop Itanium production thus would 18 mean that HP was out of the business critical server space it had defined and claimed as its 19 own. Internal documents voice the fear that this space would essentially become a two-horse 20 race between IBM and Sun. In other words, HP had backed itself into a corner, overselling its 21 Itanium solutions and under-selling its Xeon solutions to that point that Intels decision to cease 22 Itanium production was life-threatening. As HPs Senior Vice President and General Manager in 23 charge of its Business Critical Systems unit put it, HP was strategically screwed. 24
11. HP therefore made a bold play: see if it could entice Intel to continue to
25 manufacture Itanium chips by paying it hundreds of millions of dollars to continue producing 26 Itanium chips for a period of timebut secretlyso that HP could also pass off to the world that 27 nothing had changed, the Itanium processor was still alive and well, and Intels commitment to it 28 had not wavered. In March 2008, HP and Intel did enter into a brand-new agreementthe

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1 Itanium Collaboration Agreement whereby Intel, in exchange for $440 million, would prolong 2 Itanium for three more generations, releasing Tukwila in 2009, and providing marketing 3 launch dates of 2011 for Poulson and 2012 for Kittson. Under that agreement Kittson would 4 be the last Itanium chip, which Intel agreed to produce through 2014. This new arrangement did 5 not cover the cost of the actual chipsHP had to pay for those in addition. The stunning $440 6 million deal was a pure pay-off to induce Intel to keep churning out processors that it really 7 wanted to kill. According to its plan, HP did not reveal this material agreement to the 8 marketplace, or even to its own salesforce. 9
12. There is, of course, nothing wrong with entering into a contract with a
10 supplier to ensure the supply of a key input. Had HP simply entered into the Intel deal and 11 revealed it perhaps taken credit for itOracle would have nothing to complain about. Indeed, 12 the public, HPs actual and prospective customers, HPs salesforce and others had long-known 13 that Intel and HP had initially entered into an agreement in the 1990s to jointly develop Itanium, 14 before Intel assumed control for the development and manufacture of the chip. But this new 15 agreement was something quite different: HP could not have the world, its customers or its 16 investors know that Intel desperately wanted out of Itanium, and that it would only, reluctantly, 17 keep making the chip if HP paid it a $440 million subsidy. Secrecy and the appearance that Intel 18 was committed to Itanium on its own merits were thus integral parts of HPs strategy. The 2008 19 agreement contained strict nondisclosure language demanding that even the existence of the 20 agreement itself, let alone its terms, never be revealed to the world. The payments to Intel were 21 also allocated over time, accounted for as NREnonrecurring engineering costsso that they 22 could be buried in HPs public filings with no one ever the wiser. And this Collaboration 23 Agreement was, in fact, never revealeduntil Oracle uncovered it in this litigation. HP worked 24 hard to keep the agreement buried, even from its own people. The architect of the deal has stated 25 that the Itanium situation is one of our most closely guarded secrets. The question screams 26 out: Why? 27

13.
The primary reason is that HP understood that a deal to extend the life of 5
28 Itanium artificially and through extraordinary life-saving measures would clearly signal to the
1 marketplace that the end of Itanium was impending. That Intel had to be paid to put Itanium on 2 life support would surely be material information for customers making long-term, multi-million 3 dollar purchase decisions. As HPs internal documents show, customers are prone to abandon a 4 server technology as soon as its end of life becomes visible. HP was concerned that 5 announcing an agreement whereby HP pays Intel nearly a half billion dollars but only gets a five6 year commitment would begin to affect purchasing decisions immediately, because it would 7 shatter the all important perception of vitality and longevity for that particular server line. As an 8 HP employee puts it: [A]n informed customer is not going to invest in a hardware/operating 9 system solution with a life expectancy of 4 years. It will take them 4 years to get production up 10 and running. 11
14. HP therefore had a lot to gain by keeping the Intel agreement secret and
12 committing Intel to adopting a business as usual posture as it announced its Itanium roadmap. 13 And so HP decided to deceive customers and the marketand even its own sales forceby 14 letting everyone believe that Intel had extended the Itanium roadmap on its own initiative and for 15 its own reasons. Since the agreement was signed in March 2008, HP has on innumerable 16 occasions touted the long Itanium roadmap and Intels commitment to the chip as a reason for 17 consumers to keep purchasing and using Itanium systemswithout once mentioning Intels 18 desire to stop producing Itanium, the life-support agreement with Intel or the date certain when 19 Itanium production would end. 20
15. HP also did not want to reveal that much of the Itanium roadmap is, in its
21 own words, more an illusion than of technical significance. The secret agreement HP has with 22 Intel does not obligate or incentivize Intel to develop great Itanium chipswith the performance 23 gains one would expect from one generation to the next. Its purpose, again in HPs own words, 24 is simply to [e]xtend[] [the] Itanium roadmap . . . to create market perception of long term 25 viability. The 2008 agreement thus set minimal performance benchmarks for the last Itanium 26 chip, Kittson, precisely so that Intel would be relieved of any implied obligation to make normal 27 performance improvements. The agreement clearly reflects an understanding between HP and 28 Intel that for its annual payment of $88 million Intel need only go through the motions of

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1 extending the Itanium roadmap. None of this has been revealed to consumers or to the market, 2 who instead have heard HP tout Intels commitment to long-term roadmaps and competitive 3 Itanium chips. 4
16. Even with the 2008 Itanium collaboration Agreement in place, however,
5 HPs internal documents show numerous projections for a precipitous decline in HP revenue 6 starting in 2012, as soon as Itaniums end of life became visible to the market. HP therefore 7 entertainedand abandonednumerous alternative plans to stave off the inevitable. One such 8 plan is outlined belowwith 2012 representing, in HPs words, the date of market realization 9 that Itanium is going EOL. 10 11 12 13 14 15 16 17 18 19 20 21 22
17. Instead, in 2010 HP extended the Itanium Collaboration Agreement
23 and the fraud on consumers and Oracle. It did so when it decided, contrary to its original plan, 24 not to continue the effort to port HP-UX to the Xeon platform by the time Intel ceased producing 25 Itanium. HP had hoped that over the course of the initial Intel deal it could create a version of its 26 HP-UX operating system that would run on x86 processors, which if successful would allow 27 consumers to move their applications to Xeon systems and HP to maintain the support business. 28 HP abandoned its porting effort, however, due to the engineering cost and effort, its conclusion

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1 that it could not convince the independent software vendor (ISV) community to support the 2 proposed new version of HP-UX and the simple fact that it was more profitable to falsely extend 3 the perceived life of Itanium and continue exploiting its locked-in base of Itanium/HP-UX 4 customers. When this became clear in early 2010, HPwith no real answer to its dilemma 5 elected to push out its problem yet again. It decided to seek from Intel another undisclosed, 6 extended Itanium commitment and continue the illusion of a long, Intel-initiated Itanium 7 roadmap. 8
18. HP amended the Itanium Collaboration Agreement with Intel in October
9 2010, agreeing to pay Intel more than a quarter of a billion dollars more in exchange for three 10 more years of Itanium production and Intels promise to publicly update its previous roadmap, 11 so as to appear longer. In fact, the new roadmap doesnt contain a single new chip. Rather, in a 12 clever deception, HP instructed Intel to break Kittson (renamed Kittson22 or K22) into two 13 sequential HP system product releases separated by one to two-and-a-half years with the 14 timing as requested by HP . . . . The obvious and intended purpose of this is to further the 15 illusion of a longer roadmapand again, extend the end of life visibility date that was so 16 important to customers. In HPs words, HP will be able to extend the Itanium roadmap by 17 releasing a follow-on to Kittson about 2 years later (dubbed K22+ for now) which will 18 [e]xtend our BCS and TS profit pool longer (this takes us to about 2017). Importantly, the 19 second Kittson chip (K22+) will not reflect incremental development and functionality. Under 20 the agreement, the aggregate functionality of the two releases is established first, with HP 21 retaining the right to withhold known Kittson functionalities until the ostensibly next-generation 22 chip. HP did not reveal any of this to the marketplace. 23
19. The new agreement also clearly allows Intel to disinvest in Itanium,
24 immediately. A key part of this is that K22 is to be a Xeon socket compatible microprocessor. 25 That means that Intel is only developing a new Itanium core, which will then be combined 26 with Xeon components (uncore) to create the full chipset solution. The typical reason this is 27 doneand the reason hereis that it is cheaper, here for Intel, to reuse uncore from another 28 product (Xeon) rather than build specialized uncore for Itanium. The cost savings, however,

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1 come at the expense of performance. Historically Intel has built Itanium-optimized chipsets to 2 achieve high performance. Intel does not want to bear the expense of doing that any longer, and 3 HP conceded the point. HP, however, has not told the market that any Itanium chip after 2012 4 will be socket-compatible with Xeon, because it understands that consumers would spot the 5 disinvestment and react accordingly. In fact, if it became clear that the purpose of the extended 6 roadmap was simply to produce a processor that would migrate customers to x86 in five years, 7 a customer making an IT decision today would not wait for HPs Xeon hybrid solution to come 8 to marketthey would simply move today, as would many of HPs current customers. In fact, 9 Intel has sought to reveal the socket-compatible nature of Kittson publicly numerous times and 10 HP has blocked it from doing so. The market still does not know about it. 11
20. Numerous HP documents show that Sun and later Oracle were intended
12 victims of this deception. While the strategy was first and foremost about milking the installed 13 base for support payments, the second goal was to make server sales that otherwise would have 14 gone to IBM or Oracle/Sun. For example, an HP document entitled Prolong the Itanium 15 roadmap lists HPs strategy as Extend BCS Integrity/HP-UX business to retain installed base 16 and retain distant #2 market share position. Other documents show HPs use of this deception 17 to make the high-end UNIX market a duopoly between HP and IBM by killing off Sun, and even 18 forcing Oracle to sell the Sun hardware assets to HP. 19 B. 20 21
HP Made False and Misleading Statements to Analysts, the Press, Its Customers and Potential Customers, and Investors For the Purpose of Preserving Its Profits 21. At all times relevant to this cross-complaint, the following was true: (i)
22 Intel wanted to stop developing and manufacturing the Itanium microprocessor; (ii) Intel only 23 continued to manufacture the Itanium microprocessor because HP paid Intel hundreds of millions 24 of dollars to do so; (iii) the new versions of Itanium that Intel agreed to release were not 25 technologically advanced to the extent consumers would expect of a latest generation Intel 26 microprocessor, and would in fact be far behind Xeon when released; and (iv) Intel would 27 produce the last of even these inferior chips, at the latest, in 2013 under the original agreement 28 and in 2015 under the 2010 amendment. HP revealed none of this. Instead, beginning in 2008

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1 and increasing in frequency and desperation to the present date, HP has represented to the public 2 and its customers that Itanium had a long and vital life, and that Intel was independently 3 committed to developing technologically superior products under the Itanium line. These 4 representations were false and misleading and designed to conceal from the public the true status 5 of the Itanium microprocessor and Intels support for it. HPs false and misleading statements 6 have caused significant economic harm to Oracle. Oracle has lost customers and business 7 opportunities, which would not have occurred but for HPs false and misleading statements. 8
22. There are numerous examples of false and misleading statements that HP
9 made to the public. The most pervasive misrepresentation was pointing customers and the public 10 to Intel as an unbiased, objective and even definitive source of Itanium roadmap information. 11 HP has regularly cited Intel and pointed customers and industry analysts to Intel as proof that 12 Intel believes in Itanium and is independently committed to Intels Itanium roadmap. It has 13 done so knowing that Intel is contractually bound not to reveal the agreement with HP, the fixed 14 length of the agreement, its end date, the minimal performance requirements, or anything that 15 would qualify Intels ostensible commitment to the Itanium roadmap. When Intel does its part, 16 publishing familiar-looking and unqualified Itanium roadmaps, HP cites those roadmaps or Intel 17 statements about them as proof of Intels commitment. It is an elaborate charade, meant to 18 convince customers that they need not believe a self-interested party like HP but can trust an 19 ostensibly unbiased party like Intel. 20 21 following: 22 23 24 25 26 27 28

23.
Typical of the HP statements adopting Intels Itanium roadmaps are the On April 27, 2010, Rod Curry, Director of Business Critical Systems (BCS) for HP United Kingdom and Ireland stated that the Itanium roadmap has never been clearer and that Intels commitment is as strong as it ever has been. On July 24, 2008, HP China employee Chen Wusheng stated that Intel is a loyal partner for the development of Itanium system and that HP is very confident about the future development of Itanium system on a basis of its high credibility, capability and flexibility. 10
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On June 15, 2010, HP employee Jacob van-Ewyk stated: The recently announced HP Integrity servers have a long life ahead of them. Intel has already disclosed that the new Itanium 9300 processor will be followed up by Poulson and Kittson . . . . This is the longest published roadmap in the UNIX business - taking the roadmap out until around 2017. On November 11, 2010, Mr. van-Ewyk stated: When I visit potential HP Integrity customers, I often get questions around the Itanium processor, and the related roadmap. In fact, many non-HP customers seem to have heard the FUD from our competitors, and are surprised that Itanium isnt dead. . . . Intel has offered a public Itanium roadmap that includes the current Itanium 9300 processor series, a follow up processor called Poulson, and even a future Itanium processor called Kittson. Their public roadmap is available as a PDF and is one of the longer public roadmaps available for mission critical systems. On February 9, 2011, HP Vice President and Chief Technology Officer for Business Critical Systems Kirk Bresniker stated that HPs customers are excited by Intels Itanium roadmap, the longest public microprocessor roadmap in the industry coupled with the ability to add multiple generations of higher capacity blades on a slot by slot basis. To them this means they can count on adding even more capacity incrementally, extending the life of their infrastructure investments. On March 23, 2011, HP released a statement in which it falsely reiterated that [HP] will continue the development and innovation of Itanium-based Integrity server platforms with its HP-UX operating system using a roadmap that extends more than 10 years.3 On March 23, 2011, HP employee Cynthia Dreher stated: Just last month . . . Intel unveiled technical details about the next Itanium processor, code named Poulson, with a long and vital roadmap extending beyond the next 10 years to the Kittson processor. On March 30, 2011, in a release entitled FAQs from HP on the
HP Press Release, HP Supports Customers Despite Oracles Anti-Customer Actions, Mar. 23, 2011 available at http://www.hp.com/hpinfo/newsroom/press/2011/110323c.html.
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24.
Oracle Itanium Announcement, HP employee Kristie Popp falsely stated: HP, along with key partner Intel, is committed to at least 10 years of development and innovation on its HP-UX operating system and Itanium-based Integrity servers.4 On April 5, 2011, HP Vice President of Converged Infrastructure Strategy Doug Oathout stated: In this time of uncertainty, HP has your best interests at heart . . . . [HP will] continue the development and innovation of the Itanium-based integrity server . . . using a roadmap extending out beyond the next 10 years. . . . The result: no upheaval in your current or future plans.5
These and other similar statements were false and misleading because HP
10 knew at the time they were made that Intel would already be done with Itanium but for the secret 11 payments from HP and would jettison Itanium as soon as its obligations under the agreements 12 came to an end. These statements were also false and misleading because at no time did the 13 Itanium roadmap extend ten years or beyond. In fact, these public statements were part of a 14 concerted plan to create market perception of long term [Itanium] viability and were clearly 15 designed to mislead the public and conceal the true state of Itanium. 16 17 18 19 20 21 22 23 24 25 26 27 28

25.
These and other similar statements were also false and misleading because from 2008 to the present, Intel was only making Itanium chips because HP was paying Intel hundreds of millions of dollars extra to do so; the so-called performance improvements in subsequent Itanium chips were illusory; the next generation Itanium chips were to be socket-compatible with Intels Xeon chips; and
HP actively concealed the following material information relating to Itanium:
Kristie Popp, FAQs from HP on the Oracle Itanium Announcement, HPs Mission Critical Computing Blog, Mar. 30, 2011, available at http://h30507.www3.hp.com/t5/Mission-Critical-ComputingBlog/FAQs-from-HP-on-the-Oracle-Itanium-Announcement/ba-p/89977. Doug Oathout, Is Your Vendor Confusing Your Wants and Needs for Their Bottomline?, Apr. 5, 2011 available at http://h30507.www3.hp.com/t5/Mission-Critical-Computing-Blog/Is-your-vendorconfusing-your-wants-and-needs-for-their/ba-p/90221.
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26.
HP would withhold certain available functionality from the last chip in order to release K22+ to give the illusion of a longer roadmap.
HPs internal statements from the same time period fully demonstrate the
4 false nature of its public statements regarding Itaniums vitality. The contrast between what HP 5 was discussing internallythe truthand what it was telling the market and its actual and 6 prospective customersblatant liescould not be more stark. Those internal statements include 7 the following: 8 9 10 11 12 13 14 15 16 17 18 19 20
HP-UX is on a death march due to inevitable Itanium trajectory. [T]he regions are unaware of the situation with Itanium and the impending end of life. The Itanium situation is one of our most closely guarded secrets and we have not wanted to let the region/field know about it since all it would do is give them another reason not to sell. Challenge we face: HP-UX is absolutely tied to Integrity, and when it becomes obvious to customers/ISVs what the end game of IPF is (at Poulson, ~ 2012), any kind of product release requiring qualification / adoption will struggle[.] Market implications: HP holds distant #2 market share position until Itanium end is known (2014), then rapid decline occurs. Extend the Itanium roadmap . . . . Market realization that Itanium is going EOL (2 years beyond original target).
27. HPs numerous false and misleading statements regarding the longevity of
21 Itanium have damaged Oracle, in the form of lost sales and business opportunities. 22 C. 23
HP Unlawfully Defamed Oracle Following Oracles March 22, 2011 Announcement 28. On March 22, 2011, Oracle announced that it would halt future
24 development of its software products for the Intel Itanium microprocessormost specifically 25 that it would not develop for the Itanium platform the new version of its database, 12g, which 26 does not even exist yet. Oracle made that decision with no knowledge of the secret HP-Intel 27 deals, but rather on the basis of the general market signals of the Itanium processors decline, the 28 remarkable market and technical performance of the Xeon processor and conversations Oracle

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1 executives had with Intel executives confirming that Itanium was nearing its end of life and Intel 2 was strategically focused on its x86 line. 3
29. HP knew that what Oracle said about Itanium was absolutely true.
4 Itanium was already at end of life, with the last chip, Kittson, due in a few short yearsits just 5 that the market realization or public visibility of that end of life was not yet known because of 6 HPs scheme. HPs internal documents also reveal, for instance, that after Oracles 7 announcement, Intel specifically refused to issue the press release that HP demanded denying 8 Itaniums end of life. An HP executive wrote to an Intel executive: 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
30. Call me when you land. Weve been told that we cant use the following line. Intel added that it at no time communicated to Oracle a change in commitment to the future of the Itanium processor family. This is a MAJOR, MAJOR issue. We need to be able to tell the market that you never told Oracle about EOL plans for Itanium. This is a CRITICAL element of the HP/Intel relationship. I dont view this as optional. Despite HPs emphatic demand, Intel did not include the requested language. Moreover, HP also learned that Intel told its other customers the same thing it had told Oracle. As an HP employee reported to management about his conversation with an executive at another company: The biggest issue in [HP partner companys] mind is the viability of HP-UX in the future. Intel specifically told them that the Itanium line is at end of life with 2 more generations to go. After that it would be all Xeon only. The fact that Oracle now said the same thing further confirmed what they have been hearing. They believe Intel is not telling HP the same message that they have been telling the rest of the industry. Incredibly, despite these direct exchanges from Intel and its own
25 employees, and direct knowledge that Oracles announcement was true, HP publicly reacted with 26 still more lies, vilifying Oracle in the press, with customers and ultimately in this litigation. HP 27 claimed that Intel had said no such thing, that Intel was committed to Itaniums future and there 28 was no end of life for Itanium, that Oracle had made it all up to damage HP, that Oracle was not

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1 supporting current Itanium customers and perhaps most absurdly that Oracle had contractually 2 committed to port its future software products to HP-UX and Itanium. 3
31. HPs documents prove those were all outrageous and deliberate lies.
4 There is explicit recognition in HPs internal documents that Oracle was not contractually 5 committed to develop for Itanium, including a recommendation, in March 2011, that HP should 6 offer to pay Oracle for such development, which was rejected by a senior HP executive because 7 he wanted to foment customer outrage instead and get Oracle to provide such development for 8 free: 9 10 11 12 13 14 15 16 17 18 19
32. Martin Fink (Senior Vice President and General Manager of Business Critical Systems): As we continue to drive the customer outrage angle, do you want to go down the path of paying Oracle to continue to support HP-UX/Itanium? Clearly Mark knows how much were paying Intel so that will make any negotiations difficult. If we go this route, we also need to make sure we get guaranteed pricing as good or better than SPARC multipliers. Also, maybe we can pressure Intel into footing part of the bill. Dave Donatelli (Executive Vice President and General Manager of Enterprise Servers, Storage and Networking): Too early to go there. Customer outrage first. Once we even suggest money all other paths are over. HPs internal documents also admit that Oracles support policies in fact
20 were broad and generous, that current Itanium customers would be supported until 2018 and that 21 many of them would not need to upgrade to Oracles later software products (particularly the 22 Oracle database) for a great many years. HP nonetheless chose to defame Oracle at every turn 23 with allegations that Oracle was refusing to support existing Itanium system users. 24
33. HPs defamatory, false and misleading statements regarding Oracle On March 23, 2011, the HP Newsroom released a statement in which Dave Donatelli, HPs Executive Vice President and General Manager of Enterprise Servers, Storage and Networking, accused Oracle of 15
25 include, without limitation, the following: 26 27 28

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engaging in a pattern of anti-customer behavior as they move to shore up their failing Sun server business.6 Mr. Donatelli falsely accused Oracle of putting enterprises and governments at risk while costing them hundreds of million of dollars in lost productivity in a shameless gambit to limit fair competition.7 Also on March 23, 2011, HP employee Cynthia Dreher falsely alleged that Oracle was employing bully[ing] tactics and forced migrations[,] and disseminating disinformation regarding the future of Itanium.8 On or around March 24, 2011, HP disseminated to its Itanium customers and posted to its website a template Oracle Customer letter that demands Oracle immediately reverse its decision and publicly proclaim long-term support for Oracle software on the Itanium platform.9 This letter falsely suggests that Oracle discontinued or otherwise interrupted its support for Oracles Itaniumbased software. On March 28, 2011, HPs then-CEO Leo Apotheker falsely stated at HPs Americas Partner Conference 2011 that Oracles Itanium decision was anticompetitive[,] self-interested and to the endangerment of customers.10 On March 29, 2011, Michael St. Jean, HPs Solutions Business Manager, Enterprise Servers, Storage & Networking Marketing,
See Ethan Bauley, HP comment on Oracle support for Itanium Processors, Data Central, the official HP corporate blog, Mar. 23, 2011, available at http://h30507.www3.hp.com/t5/Data-Central/HPcomment-on-Oracle-support-for-Itanium-Processors/ba-p/89675. Id. Cynthia Dreher, Customers Rest Assured: HP & Intel are Committed to Long Future for Itanium, HPs Mission Critical Computing Blog, Mar. 23, 2011, available at http://h30507.www3.hp.com/t5/Mission-Critical-Computing-Blog/Customers-Rest-Assured-HP-ampIntel-are-Committed-to-Long-Future/ba-p/89673. Available at https://h30406.www3.hp.com/campaigns/2011/events/OracleCustomerLetter/OracleCustomerletter.d oc. This HP URL opens a Microsoft Word document titled OracleCustomerletter.doc. Kevin McLaughlin and Steven Burke, HP CEO Apotheker Slams Oracle For Quitting Itanium, CRN News, Analysis, and Perspective for Vars and Technology Integrators, Mar. 28, 2011, available at http://www.crn.com/news/data-center/229400474/hp-ceo-apotheker-slams-oraclefor-quittingitanium.htm;jsessionid=MvsnQur0A4BO9hMjB6oNbA**.ecappj01.
7 8
10
16
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

falsely stated: Many of Larry Ellisons announcements are meant to disrupt the market to Oracles gain. . . . [W]hat is Larrys strategy with the announcement of halting development for the Itanium chip? . . . [I]t seems obvious that Larry is once again trying to disrupt the market.11 On March 30, 2011, HP employee Kristie Popp falsely stated that during the past 12 months, Oracle has shown a pattern to limit customer choice, raise prices, and cut off partners. Clearly, Oracles actions have been in the best interest of Oracle and not that of customers.12 On April 1, 2011, Patrick Eitenbichler, HPs Marketing Strategist, Converged Infrastructure, falsely stated that Oracles Itanium decision was made without a single consideration for customers who have made significant investments in Oracle software and Itanium-based hardware.13 On April 16, 2011, HP employee Jacob Van-Ewyk falsely stated that Oracle[s] decision to stop development for Intel Itanium-based servers had left many joint customers without a solution . . . .14 On June 8, 2011, HP officials falsely accused Oracle of disregard[ing] its commitments, and . . . engag[ing] in conduct designed to deny choice and harm competition . . . .15
11
Jacob van-Ewyk, HP Integrity and Oracle Support, HPs Mission Critical Computing Blog, Mar. 29, 2011, available at http://h30507.www3.hp.com/t5/Mission-Critical-Computing-Blog/HPIntegrityand-Oracle-Support/ba-p/89943 (see comment by HP employee Michael St. Jean in Comments section). Kristie Popp, FAQs from HP on the Oracle Itanium Announcement, HPs Mission Critical Computing Blog, Mar. 30, 2011, available at http://h30507.www3.hp.com/t5/Mission-Critical-ComputingBlog/FAQs-from-HP-on-the-Oracle-Itanium-Announcement/ba-p/89977. Kristie Popp, Oracles server worldwide shipment figures fell by a startling 40 percent, HPs Enterprise Business Blogs, Apr. 1, 2011, available at http://h30507.www3.hp.com/t5/ConvergedInfrastructure/Oracle-s-server-worldwide-shipment-figures-fell-by-a-startling/ba-p/90077 (quoting Patrick Eitenbichler). Jacob van-Ewyk, The Trend to Cloud, HPs Mission Critical Computing Blog, Apr. 16, 2011, available at http://h30507.www3.hp.com/t5/Mission-Critical-Computing-Blog/The-Trend-toCloud/ba-p/90935. Kevin McLaughlin, HP Letter To Oracle Hints Of Legal Action Over Itanium, CRN News, Analysis, and Perspective for Vars and Technology Integrators, June 8, 2011, available at http://www.crn. com/news/data-center/230500088/hp-letter-to-oracle-hints-of-legal-action-overitanium.htm.
12
13
14
15
17
34.
HPs efforts to provoke and foment customer outrage were not its only
2 defamatory campaign against Oracle. HP also campaigned to initiate investigations by as many 3 foreign competition authorities as it could bait with the same deceptions. 4
35. HPs representations are not statements of opinion or within any
5 competitive privilege. Among other things, they falsely assert as objective truths that Oracle is 6 the cause of Itaniums demise, that Oracle is arbitrarily causing harm to Itanium users, that 7 Oracle is refusing to provide support for customers using Itanium-based products, that Oracle has 8 lied about Itaniums future prospects and that Oracle has a history and pattern of anti-customer 9 behavior. 10
36. One of HPs most brazen lies to the marketplace is that Oracle has refused
11 to provide ongoing software support and bug-fixes for current versions of Oracles software for 12 Itanium servers. That is utterly false. In fact, Oracle is fully supporting the current (and many 13 past) versions of its software on Itanium servers, by issuing bug-fixes per its standard policies. 14 HP itself admits that most of HPs Itanium customers using Oracles database product are not 15 even on the current version of the database, 11gR2and many are still on versions 9 and 10, 16 with no immediate need to move to a more current version. HPs lies to the market about 17 Oracles alleged failure to support current versions of its software on Itanium is in direct conflict 18 with the message HP was urging its own representatives to give to customers. As HPs own 19 Vice President of Business Critical Systems Marketing and Strategy wrote two months after 20 Oracles announcement: 21 22 23 24 25
Under the Oracle Lifetime Support Policy, we expect current versions of Oracle software to be supported on Intel Itanium-based servers for many years to come . . . . The fact is, and it bears repeating, most customers do not have to make an immediate decision about their HP-UX and Oracle environment. Customers running HP-UX 11iv3 and Oracle database 11gR2 have support through 2018.
26 In other words, while publicly defaming Oracle with accusations of not supporting existing 27 Itanium customers, HP secretly reassured some that it wasnt true and that they would have 28 Oracles support for many years to come.

18
37.
HP continued its defamatory campaign by filing this lawsuit against
2 Oracle on June 15, 2011three months after Oracles Itanium announcement. The lawsuit 3 falsely alleges, among other things, that the Hurd Agreement contractually obligates Oracle to 4 maintain its license pricing and to continue developing new software for HPs Itanium platform 5 indefinitely, and that Oracle breached the Hurd Agreement by ceasing to do so. The redacted 6 complaint, designed to give the impression of a contract where none existed, was an escalation in 7 the ongoing campaign to deflect attention from HPs years-long Itanium fraud and to pin the 8 public blame for its unraveling squarely on Oracle. 9
38. HPs defamatory campaign is systematic, widespread and ongoing. It
10 does not consist of an isolated statement or two, but is a well-orchestrated effort to blame Oracle 11 for Itaniums demise, beginning as early as March 23, 2011 and continuing to the present day. 12 HP has a website dedicated to selling these lies, 13 http://h18004.www1.hp.com/products/solutions/customers first.html, which has been active 14 since at least April 2011. HP has also reached out directly to Oracles customers. Indeed, 15 immediately following Oracles Itanium announcement, HP drafted and disseminated to its 16 Itanium customers a template Oracle Customer letter that demands Oracle immediately 17 reverse its decision and publicly proclaim long-term support for Oracle software on the Itanium 18 platform thus falsely suggesting that Oracle discontinued or otherwise interrupted its support for 19 Oracles Itanium-based software . Oracle began receiving identical or substantially similar 20 copies of this letter from its Itanium customers (with each customers individual information 21 substituted in where necessary) shortly after its announcement. HP also created and posted to its 22 website several videos featuring joint HP-Oracle customers, which quoted the customers 23 criticizing Oracles Itanium decision using language similar to HPs language in its own press 24 releases and public statements. 25
39. HPs false statements have caused substantial customer confusion and
26 anger, and injury to Oracles reputation and existing and prospective customer relations. HPs 27 actions have resulted in lost sales of Oracle/Sun servers and lost profits in an amount to be 28 proven at trial. HPs defamatory attacks on Oracle have also caused injury to Oracle, among

19
1 them: existing and prospective customers seeking compensation and guarantees from Oracle, 2 threatening to withdraw or withdrawing their business from Oracle and/or vowing not to do 3 business with Oracle in the future. Oracle has already expended and continues to expend 4 substantial resources setting the story straight and assuaging its customers unfounded fears. 5 HPs conduct has also created serious uncertainty in the marketplace, thereby injuring customers 6 and competition. 7
40. Oracle now understands that its real offense was telling the truth about
8 Itaniumand thus unknowingly undermining HPs plan to lock in its customers to Itanium 9 longer and keep milking support revenues, until it could develop x86 solutions and migration 10 strategies on its own timetable. The truth also undermined the three-quarters of a billion dollars 11 HP was secretly paying to Intel to create the illusion of a long Itanium roadmap essential to its 12 scheme. All that money and the years of carefully managed secrecy meant nothing if Oracle was 13 going to stop building new products for HP-UX. Certainly that is not Oracles problem, as it had 14 no obligation to continue to do so, and even if HP had obtain such a commitment it would 15 have been obtained by fraud and deception. In all events, nothing justifies HPs dishonest efforts 16 to slander Oracle and double-down on its lies about Itaniums status and future. Itanium is past 17 its natural end of life. Since 2008 it has been on HP-managed life support, and every appearance 18 of vitality and relevance has been orchestrated by HP, for the benefit of HP alone, and with utter 19 disregard for the rights of consumers to make their own informed choices. HPs world-class 20 campaign of deceptionand its final stage, where HP has attempted to vilify Oracle for telling 21 the truthhas finally come to light. By this cross-complaint Oracle seeks appropriate redress for 22 itself and the general public. 23 /// 24 25 26 27 28

20
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

FACTUAL ALLEGATIONS REGARDING CLAIMS FOR FRAUDULENTLY INDUCING ORACLE TO ENTER INTO THE HURD AGREEMENT 41. In addition to defrauding the market and inflicting harm on Oracles server
business, HP also fraudulently induced Oracle to enter into the very contract at the heart of its lawsuit against Oraclethe Hurd Agreementunder which HP falsely alleges that Oracle promised to forever port its software to HPs Itanium platform. A. The Oracle and HP Relationship, and Oracles Acquisition of Sun 42. The Hurd Agreement arose in the context of what was once a
complementary, but then became an increasingly competitive, relationship between Oracle and HP. For many years, Oracle and HP had a relationship that followed naturally from the way their individual self-interests were aligned. Oracle was an enterprise software company, and did not sell computer hardware. HP was principally a hardware company, and insofar as its business touched Oracles (much of it does not), it sold computer servers that ran Oracle software. HP had very little in the way of an enterprise software business. Over time HP developed a substantial business providing various enterprise software services as well, but that was also complementary to Oracles offerings. With little turf to fight over and many mutual customers, a partnership in the colloquial sense evolved, and Oracle and HP worked together voluntarily in many ways. Formal contractual obligations were a part of their relationship where necessary, and there are numerous binding contracts between Oracle and HP. The parties signed formal contracts whenever they intended to be legally bound, spelling out the exact obligations to be incurred, monetary compensation, specific duration, and the like. But they also often worked towards commonly-held goals without any contractual commitment, simply because the pursuit of their respective self-interests was sufficient to put them on the same path. Neither company ever agreed to act contrary to its own individual economic interest, however. 43. The companies relationship changed as their previously aligned interests
began to diverge. As noted, an important moment in this evolution was Oracles acquisition of Sun Microsystems, which positioned Oracle as one of HPs three principal competitors in the market for computer servers. HP understood this was a transformative event, and wasted no time 21
1 transitioning to a competitive relationship with Oracle. In July 2009, when Suns shareholders 2 voted to approve the Oracle merger, HP launched a program called SunSet that directly 3 targeted Suns server customers and attempted to induce them to switch to HP servers, alleging, 4 among other things, that Oracle was not a stable and proven hardware vendor. HPs 5 accompanying press release said that it was cheaper to run Oracles database software on HP 6 systems rather than Sun SPARC systems, which HP knew was solely the result of a pricing 7 advantage that HP also knew would disappear as soon as Oracle owned Sun. HP also began 8 aggressively recruiting and hiring Sun employees, capitalizing on Suns challenging financial 9 situation and the disruption caused by the extended regulatory review of the transaction. Since 10 the Sun acquisition closed, Oracle and HP have routinely competed against each other in the sale 11 of computer server systems, and in that setting have appropriately not acted as partners in any 12 sense of the term. Oracle, of course, had no idea that, far above and beyond any lawful 13 competition, HP had furthered and doubled down on its deception regarding Itanium, with a 14 specific goal of crushing Sun, driving Oracle from the server market, and even acquiring the Sun 15 assets from Oracle when HPs plan succeeded. 16 B. 17
The Hurd Agreement 44. Any idea of an Oracle-HP partnership was damaged further as a result
18 of events in the summer of 2010. On August 6, 2010, HPs Board voted to oust its then-CEO, 19 Mark Hurd. Mr. Hurd had been a very effective CEO at HP. HPs stock price doubled during 20 his five-year tenure and under his leadership, HP became the worlds leading technology 21 company by revenue. To put that in context, as of August 25, 2011 HPs stock had declined 22 approximately 45 percent in just over a year since Mr. Hurd was ousted, and its shareholders had 23 lost over $55 billion in market capitalization. Mr. Hurd was also highly respected by Oracles 24 management. In August 2010, the HP Board forced Mr. Hurd out in the wake of baseless sexual 25 harassment chargescharges that HP itself found to be baseless and that were withdrawn by 26 Mr. Hurds accuser. Oracle was sharply critical of Mr. Hurds ouster, pointing out that it was not 27 only harmful to HP and its shareholders, but to business partners like Oracle as well. 28

22
45.
Oracle seized the opportunity to bring Mr. Hurd onto its management
2 team. On September 6, 2010, Oracle announced Mr. Hurd as its new Co-President. HP reacted 3 to this news swiftly and aggressively: it sued Mr. Hurd the next day, alleging that he would 4 inevitably violate his confidentiality obligations to HP and reveal HPs secret information to 5 Oracle.16 HP sought immediate injunctive relief to protect its trade secrets and confidential 6 information from Hurds threatened misappropriation and to require Hurd to honor his legally 7 binding trade secret protection agreements with HP.17 But a lawsuit premised on the inevitable 8 disclosure of ones trade secrets is baseless as a matter of California law, which rejects the 9 notion that a person with knowledge of a former employers trade secrets will unavoidably 10 disclose those secrets if the person later works for a competitor. HPs suit against Mr. Hurd had 11 no objective basis in law or fact, and was obviously filed to harass Mr. Hurd, cause him to forfeit 12 compensation he received at the time he left HP and delay his transition to Oracle. 13
46. Significantly, HPs lawsuit did not name Oracle as a defendant. In fact,
14 the day after filing the Hurd litigation, HPs then-acting CEO Cathie Lesjak expressly stated: I 15 think the clarification I need to make is that we actually have not filed suit against Oracle. We 16 have actually filed suit against Mark. . . . In terms of how its going to affect our relationship 17 with Oracle . . . , ultimately, we will go back to being good partners . . . .18 HP also clarified to 18 its employees that it had not filed any lawsuit against Oracle. In short, HP did not sue Oracle, 19 never intended to sue Oracle, and made clear publicly that the only redress it sought was against 20 Mr. Hurd. HP never intended to obtain any sort of commitment or obligation from Oracle as a 21 22 23 24 25 26 27 28

16
See Ex. B (Hewlett-Packard Company v. Hurd, Case No. 110CV181699 (Santa Clara County Superior Court) (Sept. 7, 2010)). Id. at 2. Ethan Bauley, Cathie Lesjak remarks at Citi Technology Conference: R&D, 3PAR, Mark Hurd, Oracle, and more, Data Central, the official HP corporate blog, Sept. 11, 2010, available at http://h30507.www3.hp.com/t5/Data-Central/Cathie-Lesjak-remarks-at-Citi-Technology-ConferenceR-amp-D-3PAR/ba-p/82391 (quoting an interview Ms. Lesjak gave at Citigroups Global Technology Conference on September 8, 2010) (emphasis added).
17 18
23
1 result of its lawsuit against Mr. Hurd, but simply intended to go back to being partners in the 2 way the companies were before Oracle hired Mr. Hurd. 3
47. Despite its proclaimed desire to be good partners with Oracle, HPs
4 meritless litigation against Mr. Hurd further damaged its relationship with Oracle. As Oracles 5 CEO Larry Ellison stated at the time: Oracle has long viewed HP as an important partner . . . . 6 By filing this vindictive lawsuit . . . the HP board is acting with utter disregard for that 7 partnership, our joint customers, and their own shareholders and employees. The HP Board is 8 making it virtually impossible for Oracle and HP to continue to cooperate and work together in 9 the IT marketplace.19 10
48. HP signaled its desire to settle the Hurd action one day after it was filed.
11 At the time, this appeared to be no more than an acknowledgement that HP had no chance of 12 winning its case against Mr. Hurd. However, discovery obtained in this action has revealed that 13 HP had an additional hidden and more strategic agenda. HP had been interviewing and was on 14 the verge of hiring into its most senior leadership positions two peopleLo Apotheker and Ray 15 Lanewhom HP knew would ensure the complete destruction of what was left of the Oracle-HP 16 relationship. Moreover, HP desperately sought to conceal from Oracle (as well as the public) 17 that it was paying Intel $88 million per year to extend Itaniums natural life, because HP knew 18 that that Oracle had no obligation to continue developing its software for Itanium under its 19 existing partnership with HP and that such news would cause Oracle to stop developing its 20 software for such a dying platform. Knowing that Messrs. Apotheker and Lane were toxic to any 21 partnership with Oracle, and that the truth of Itaniums future would have killed any hope that 22 Oracle would continue its Itanium efforts, HP tried to use the settlement of its lawsuit against 23 Mr. Hurd as a last-chance vehicle to, among other things, induce Oracle to make hard 24 contractual commitments both to continue developing software for the Itanium platform and to 25 lock in favorable pricing on Oracles software for the Itanium platformi.e., contractual 26 27 28

19
Oracle Responds to HP Lawsuit, Oracle Press Release, Sept. 7, 2010, available at http://www.oracle.com/us/corporate/press/170699.
24
1 commitments that bore no connection to the Hurd litigation or the relief HP sought (or ever could 2 have obtained) from Mr. Hurd therein. Though Oracle plainly and unambiguously rejected the 3 notion of making any such commitments, HP nonetheless asserts in this litigation that Oracle did. 4
49. Lo Apotheker had previously been the CEO of Oracles biggest
5 applications software competitor, SAP AG. As is now clear, Mr. Apotheker knew next to 6 nothing about HPs core businesses. The only logical explanation for his hiring, now affirmed 7 by HPs subsequent business announcements, was that HP wanted to change direction and 8 become more of an enterprise software company like IBM or Oracle. HP knew that 9 Mr. Apothekers software background would signal to Oracle that the old relationship based on 10 complementary interests was over. But even more importantly, HP knew that Oracle held 11 Mr. Apotheker personally responsible for the widespread theft of Oracles intellectual property 12 by an SAP subsidiaryan admitted and long-lasting theft that resulted in a $1.3 billion jury 13 verdict against SAP in November 2010. Through its subsidiary, SAPs strategy was to tell 14 customers they were being overcharged by Oracle for customer support and then offer a 15 purportedly identical service at half the price. That too-good-to-be-true deal was possible only 16 because SAPs subsidiary was using stolen Oracle software to provide the service. In the course 17 of that litigation SAP acknowledged its guilt, and the evidence established not only Mr. 18 Apothekers involvement in SAPs illegal business practices but also his deep animus toward 19 Oracle. For example, one email produced in the litigation had Mr. Apotheker writing: Im 20 really pissedwe need to inflict some pain on oracle. In addition, Mr. Apotheker personally 21 led an effort to shakedown Oracle by suggesting he could get the European Commission to end 22 its extended antitrust review of the Oracle-Sun dealwhich was extended largely because SAP 23 led an effort to get the deal blockedin exchange for settling the litigation about SAPs theft of 24 Oracles intellectual property. Given Mr. Apothekers history, HP knew that Oracle would never 25 accept Mr. Apotheker as any kind of partner, and that his mere presence as HPs CEO would 26 poison the companies relationship. In fact, Mr. Apothekers first activity after becoming HPs 27 CEO was evading an Oracle trial subpoena in the intellectual property litigation by staying more 28

25
1 than 100 miles from the trial courthousewhich meant staying out of HPs Palo Alto 2 headquarters for weeks. 3
50. As for Ray Lane, he was best known as Oracles former President and
4 Chief Operating Officer. Like Mr. Apotheker, his experience was in enterprise software, and his 5 appointment would confirm the view that HP wanted to change direction and become more of an 6 enterprise software company like Oracle. Furthermore, Mr. Lane too had a well-documented 7 animosity towards Oracle CEO Larry Ellison, traced to his firing from Oracle in 2000. After 8 leaving Oracle, Mr. Lane publicly blamed Mr. Ellison for his ouster and became a frequent 9 Oracle critic. 10
51. Negotiation of the Hurd Agreement took place between September 8
11 and 20, 2010, at the same time HP was recruiting and just before HP announced the hiring of 12 Messrs. Apotheker and Lane. HP correctly understood that if Oracle knew about HPs imminent 13 plans to hire Messrs. Apotheker and Lane, Oracle would not make any business concessions 14 whatsoever simply to resolve HPs objectively baseless employment lawsuit against Mr. Hurd. 15 Furthermore, the very last thing Oracle would have agreed to do was sign a document 16 reaffirming any kind of Oracle-HP partnership. HP thus intentionally and actively concealed 17 this information from Oracle while negotiating the Hurd Agreement. The HP personnel and 18 Board members involved with the Hurd litigationincluding HPs general counsel and 19 corporate secretary, Michael J. Holston, who was directly involved in negotiating the Hurd 20 Agreementunequivocally knew of HPs plans to hire Messrs. Apotheker and Lane while the 21 Hurd negotiations occurred. Indeed, in an email Mr. Apotheker sent to Mr. Hurd on October 2, 22 2010, Mr. Apotheker expressly admitted that he was in intense discussions . . . with the HP 23 board at the time Oracle announced Mr. Hurd as its new Co-Presidenti.e., on September 6, 24 2010, before HP filed its lawsuit against Mr. Hurd. Mr. Holston and others thus expressly knew 25 while negotiating the Hurd Agreement that HP was simultaneously in the process of hiring, to its 26 most senior positions, two long-time Oracle foes. 27

52.
From the beginning of the Hurd negotiations, HP requested from Mr. Hurd 26
28 the very protections it sought in its complaintnamely, stringent restrictions on Mr. Hurds
1 disclosure of HPs trade secrets and confidential information via restrictions on his ability to 2 conduct various duties as an executive at Oracle, including those related to personnel and hiring 3 matters, Oracles actual and prospective customers, and analysis of Oracles strategic business 4 prospects. HP also used the occasion to seek independent and unrelated commitments from 5 Oracle that unquestionably were outside the scope of HPs suit against Mr. Hurd or any relief HP 6 sought or could have obtained in that suit. These terms included not only the language 7 reaffirming the parties partnership, but also business restrictions that had no connection or 8 relation to the Hurd litigation at all. HP indisputably could not have obtainedand did not even 9 seek these concessions from Mr. Hurd, or through the courts on account of any claim in the 10 Hurd litigation. It was an opportunistic ploy related only to the in terrorem value of suing 11 Mr. Hurd, and was made for the purpose of calming the companies shared customers who were 12 upset by the very public break signaled by HPs filing of the lawsuit and Mr. Ellisons public 13 acknowledgment that the suit had damaged the relationship. Oracle agreed to these terms, in 14 particular the reaffirmation provision, simply because Oracle believed they would mollify 15 HPs paranoia without imposing any real obligations on Oracle. Oracle would not have agreed 16 to any part of the Hurd Agreement, and especially not the terms that so clearly went beyond the 17 scope of an employment lawsuit, had it known what was in the works. 18
53. Paragraph 1 of the final Hurd Agreement20which contains the
19 reaffirmation languagearose out of a conversation that Oracle Co-President Safra Catz had 20 with HP Executive Vice President Ann Livermore on September 11, 2010, three days after HP 21 first communicated its desire to settle its lawsuit against Mr. Hurd. Ms. Livermore asked 22 Ms. Catz to publicly reaffirm the historical Oracle-HP partnership, which Ms. Catz understood 23 to mean that Oracle and HP would make a few public statements to the effect that the companies 24 were moving on from the rancor of the Hurd controversy and would continue to support mutual 25 customersin other words, it would be business as usual. There was neither a proposal from 26 27 28

20
Ex. A (Hurd Agreement (Sept. 20, 2010)).
27
1 Ms. Livermore nor any agreement by Ms. Catz for any new, binding contractual commitments 2 beyond burying the hatchet publicly, least of all any suggestion that Oracle would give up its 3 historical discretion to establish its own software pricing, development plans or priorities. 4
54. On September 12, 2010, HP counsel sent to Oracle a term sheet that
5 purported to capture what Ms. Catz and Ms. Livermore discussed. HP proposed the following: 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Reaffirmation of the Oracle/HP Partnership. The parties will re-affirm their commitment to their longstanding strategic partnership and their mutual desire to continue to support their joint customers. This re-affirmation to include a commitment from Oracle to continue to offer its product suite on HP Platforms on terms that are as good as or better than any other platform, and to co-market and cosell with HP such that the products available on HP Platforms are promoted or sold on par with or better than any other platform Oracle supports (other than Exadata). The detailed operative terms (including duration of the contractual commitment) to be resolved in the drafting of the actual written agreement. 55. Oracles General Counsel, Dorian Daley, responded by email the same
day, rejecting this proposal and making it crystal clear that Oracle had no intention of entering into any new binding contractual commitments, and that reaffirming the relationship meant exactly thatthey would continue to work together as the companies have according to their respective views as to what was best for customers. Referring to that provision, Ms. Daley stated (emphasis added): This was intended to reaffirm and continue the existing relationship and not to put HP in a better position tha[n] it currently enjoys or result in the negotiation of a new contractual commitment. Ms. Catz and Ms. Livermore did not discuss anything more tha[n] an agreement to continue to work together as the companies have with Oracle porting products to HPs platform and HP supporting the ported products and the parties engaging in joint marketing opportunities for the mutual benefit of customers. They did not discuss, and Oracle will not agree, to a most favored nations clause. Given their market positions, such an agreement might even be considered suspect by regulatory authorities. Negotiation of detailed operative terms is therefore not necessary. 28
56.
In the same email, Ms. Daley attached a draft agreement which contained
2 the following articulation of Paragraph 1: 3 4 5 6 7 8

57. Reaffirmation of the Oracle-HP Partnership. 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. In the context of Ms. Daleys cover email, that language obviously was
9 not meant to put HP in a better position tha[n] it currently enjoy[ed]. Neither could it 10 reasonably be construed as a new contractual commitment. 11
58. HP knew that pursuant to Ms. Daleys proposed language and email
12 explanation, Oracle was not locked in to any particular software development commitment. 13 Among other things, Oracle hadduring the partnershipalways retained complete discretion 14 to support whichever HP technologies it chose, and could change its practicesjust as HP 15 couldin response to changed conditions. Furthermore, HP knew that formal software porting 16 contracts, where they existed as part of the partnership, were carefully constrained and 17 supported by substantial financial considerationthere was even an existing, detailed and 18 carefully limited Itanium porting agreement. In short, HP knew that it obtained no specific 19 business commitments or guarantees simply from Oracle continu[ing] to offer its product suite 20 on HP platforms . . . in a manner consistent with the historical notion of partnership. 21
59. As a result, in its very next draft of the agreement, dated September 13,
22 2010, HP again proposed specific language setting forth explicit obligations, among them that 23 Oracle would (i) continue software development for HPs Itanium platform (HP-UX), and (ii) 24 maintain its software pricing. HPs new language for Paragraph 1 stated (with HPs proposed 25 inserts in bold): 26 27 28

Reaffirmation of the Oracle-HP Partnership. 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 29
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

continue to support Oracle products (including Oracle Enterprise Linux and Oracle VM) on its hardware in a manner consistent with that partnership. Oracle will continue to support all ongoing versions of HP-UX with Oracles relevant database, middleware and application products with the availability, marketing and pricing in competitive terms that Oracle has provided HP for the past five years. Oracle will continue to provide access to the Java technology and tools such that HP can continue to support its operating systems (e.g., HP-UX, OpenVMS, Nonstop) in a manner similar to the way it does today. Oracle agrees to continue to provide Solaris for HPs x86 platforms in a manner similar to what it provides HP today. Oracle agrees to continue to purchase HP server hardware for internal use at a rate similar to what Oracle purchases today. 60. Oracle again rejected this language unequivocally because, as both
Ms. Catz and Ms. Daley had said, Oracle was unwilling to give HP greater commitments than HP ever had in the past. Twice rejected, HP did not again seek to insert binding and specific contractual commitments into Paragraph 1. The final, executed version of Paragraph 1 is nearly identical to the version Oracle first drafted, adding only that the parties would reaffirm the idea of partnership as it existed prior to Oracles hiring of Hurd. That language confirmed that the only commitment Oracle was making was that Mr. Hurds hiring itself would not bring about a change in Oracles business practices. 61. HP now contends that Paragraph 1 of the Hurd Agreement obligates
Oracle to port to the Itanium platform each new version of Oracles software products because, [since] the time HP introduced its first Itanium servers in 2001, Oracle has always ported its database and other software to run on the Itanium platform.21 HP suggests it is irrelevant that the Itanium platform is dying and has no future; that, consistent with the partnership, Oracle has discontinued software development for other obsolete HP platforms; that HPs other partners have discontinued software development for Itanium as well; and that Oracle and HP had an express, carefully limited Itanium porting agreement that does not cover the commitments HP
21
Joint Case Management Conference Statement, Aug. 5, 2011, p. 5 (HP position statement).
30
1 now seeks. Paragraph 1, according to HP, trumps all and creates a perpetual software 2 development commitment by Oracle at no cost to HP. 3
62. Oracle emphatically denies that HP has any rights to continued software
4 development or guaranteed pricing under Paragraph 1 of the final Hurd Agreement, or that any 5 such rights existed in the Oracle-HP partnership before the Hurd Agreement was signed. 6 However, if any such rights are found to exist in the language of Paragraph 1, they would not 7 exist but for HPs deliberate and active concealment of the following material facts: (1) that 8 Intel wanted out of Itanium but had only been producing the chipand had only promised to do 9 so for a finite additional period of timein return for hundreds of millions of dollars from HP; 10 and (2) that HP was seeking to impose a similar development commitment on Oraclebut at no 11 cost to HP and with no time restrictionswhile planning to hire Messrs. Apotheker and Lane as 12 HPs new management team. Oracle would not have signed on to any agreement with HP had it 13 known this information, and certainly the last thing it would have ever agreed to do was 14 reaffirm a partnership that on the HP side would be led by Messrs. Apotheker and Lane, or 15 include any languageeven looseregarding the parties going back to a previous state of 16 affairs. To the extent HP obtained the rights it claims in this suit, it did so by fraud. 17
63. Unaware of HPs secret Itanium campaign, and of its plans to hire
18 Messers. Apotheker and Lane, Oracle agreed to the terms of the Hurd Agreement, and the parties 19 executed the document on September 20, 2010. Oracle and HP issued a joint press release that 20 same day in which they reaffirmed their so-called partnership. 21
64. On September 30, 2010, just ten days later, HP announced that it had
22 appointed Mr. Apotheker as its new CEO and Mr. Lane as the non-executive chairman of its 23 Board. The media aptly construed HPs actions as a direct assault on Oracle. The Wall Street 24 Journal reported on Mr. Apothekers hiring by saying that he offered a characteristic that seems 25 26 27 28

31
1 to be highly valued at H-P these daysa dislike of Oracle.22 An All Things Digital reporter 2 referred to Mr. Lanes hiring as a jab at Oracle.23 3 4 5
65. FIRST CAUSE OF ACTION (Violation of the Lanham Act, 15 U.S.C. 1501 et seq.) Oracle incorporates by reference the allegations in Paragraphs 1 through
6 64 above as though fully set forth herein. 7

66. HP has engaged in the following, non-exhaustive list of conduct
8 proscribed by section 43(a) of the Lanham Act, 15. U.S.C. 1125(a): 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Knowingly making and causing to be made false and deceptive statements to Oracle and the public in connection with the sale and advertisement of its Itanium products. These false and deceptive statements were made regarding Itaniums status and future and Intels commitment thereto, including without limitation that Intel is independently committed to developing multiple generations of Itanium chips under an Itanium roadmap that extends for more than ten years from March 2011. These false and deceptive statements were made in interstate commerce with the intent to deceive the public. These false and deceptive statements deceived and are likely to deceive the public, including Oracles and HPs Itanium customers and prospective Oracle and HP customers. These misstatements are material, in that they influenced and are likely to influence the publics purchasing decisions.
Knowingly disseminating false, deceptive and defamatory statements to its customers and the marketplace in connection with the sale and advertisement of its Itanium products. These false, deceptive and defamatory statements
22
Jennifer Valentino-DeVries, Is Leo Apotheker a Good Fit as H-Ps New CEO?, WALL ST. J., Sept. 30, 2010, available at http://blogs.wsj.com/digits/2010/09/30/is-leo-apotheker-a-goodfit-as-h-ps-newceo/. John Paczkowski, HP Names Ex-SAP Chief Apotheker as CEO, ALL THINGS D, Sept. 30, 2010, available at http://allthingsd.com/20100930/hp-names-new-ceo-leo-apotheker/.
23
32
1 2 3 4 5 6 7 8 9 10 11
67.
were made regarding Oracle, including without limitation that Oracle is the cause of Itaniums demise, that Oracle is arbitrarily causing harm to Itanium users, that Oracle has lied about Itaniums future prospects and that Oracle has a history and pattern of anti-customer behavior. These false and deceptive statements were made in interstate commerce with the intent to deceive the public. These false and deceptive statements deceived and are likely to deceive the public, including Oracles and HPs Itanium customers and prospective Oracle and HP customers. These misstatements are material, in that they influenced and are likely to influence the publics purchasing decisions. HPs false and deceptive advertising has and will deceive the public and
12 cause a loss of Oracles sales. Oracle and the public will likely continue to suffer such injury 13 unless HPs conduct is enjoined and restrained by the Court. Oracle therefore seeks an 14 injunction pursuant to section 43(a) of the Lanham Act, 15. U.S.C. 1125(a), prohibiting HP 15 from engaging in the unlawful and deceptive conduct described above. 16
68. Oracle has suffered injury as a direct and proximate result of HPs false
17 and deceptive advertising. Due to HPs false and deceptive statements about Itaniums future, 18 Oracle, customers and potential customers have been actually deceived, and Oracle has lost 19 potential sales in both the hardware and software markets. 20 69. Oracle seeks monetary damages pursuant to sections 35 and 43(a) of the 21 Lanham Act, 15. U.S.C. 1117(a), 1125(a), to recover HP's profits, damages sustained by 22 Oracle and the costs of the action. 23
70. HPs intentional and willful dissemination of false statements regarding its
24 Itanium products and Oracle make this an exceptional case under section 35 of the Lanham Act, 25 15 U.S.C. 1117(a), and thus Oracle is entitled to an award of reasonable attorneys fees and 26 costs. 27 28

33
1 2 3
71.
SECOND CAUSE OF ACTION (Violation of Cal. Bus. & Prof. Code 17500 et seq.) Oracle incorporates by reference the allegations in Paragraphs 1 through

72. HP has engaged in the following non-exhaustive list of conduct proscribed
6 by California Business and Professions Code section 17500 et seq.: 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Knowingly making and causing to be made false and deceptive statements to Oracle and the public regarding Itaniums status and future and Intels commitment thereto, including without limitation that there is a long ten-year roadmap for multiple generations of Itanium chips that Intel fully supports. These material misstatements were made with the intent to secure from Oracle and the public commitments and obligations with respect to the purchase and/or support of HPs Itanium products. The material misstatements deceived and are likely to deceive Oracle and the public, including Oracles and HPs Itanium customers.
Knowingly failing to disclose to Oracle and the public material information regarding Itaniums status and future, including without limitation its secret agreements to pay Intel hundreds of millions of dollars to continue producing the Itanium chip beyond the products natural life. These material omissions were made with the intent to secure from Oracle and the public commitments and obligations with respect to the purchase and/or support of HPs Itanium products. The material omissions deceived and are likely to deceive Oracle and the public, including Oracles and HPs Itanium customers.
73.
HP had a duty to disclose material information to Oracle and the public
when it undertook to make public representations about Itaniums longevity. Instead, HP knowingly and actively concealed information from Oracle and the public.
34
74.
HP had exclusive knowledge of this informationOracle and the public
2 did not know and could not have known about Itaniums real longevity. Accordingly, Oracle 3 was unable to compete on a level playing field and lost business opportunities. 4
75. Oracle has suffered injury in fact and has lost money or property as a
5 direct and proximate result of HPs unlawful and deceptive conduct, and will continue to suffer 6 such injury unless HPs conduct is enjoined and restrained by the Court. Oracle therefore seeks 7 an injunction pursuant to California Business and Professions Code section 17535 prohibiting 8 HP from engaging in the unlawful and deceptive conduct described above. 9
76. Moreover, HP was unjustly enriched as a direct and proximate result of
10 HPs unlawful and deceptive conduct. Oracle seeks restitution pursuant to California Business 11 and Professions Code section 17535 to restore to Oracle all monies HP acquired as a result of its 12 unlawful and deceptive conduct. 13 14 15
77. THIRD CAUSE OF ACTION (Violation of Cal. Bus. & Prof. Code 17200 et seq.) Oracle incorporates by reference the allegations in Paragraphs 1 through

78. HP has engaged in the following non-exhaustive list of unlawful, unfair
18 and deceptive business practices: 19 20 21 22 23 24 25 26 27 28

Making false and deceptive statements to Oracle and the public regarding Itaniums status and future and Intels commitment thereto, including without limitation that there is a long ten-year roadmap for multiple generations of Itanium chips that Intel fully supports. These material misstatements deceived and are likely to deceive Oracle and the public, including Oracles and HPs Itanium customers.
Failing to disclose to Oracle and the public material information regarding Itaniums status and future, including without limitation its secret agreements to pay Intel hundreds of millions of dollars to continue producing the Itanium 35
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

chip beyond the products natural life. These material omissions deceived and are likely to deceive Oracle and the public, including Oracles and HPs Itanium customers. Disseminating false, deceptive and defamatory statements to its customers and the marketplace regarding Oracle, including without limitation that Oracle is the cause of Itaniums demise, that Oracle is arbitrarily causing harm to Itanium users, that Oracle has lied about Itaniums future prospects and that Oracle has a history and pattern of anti-customer behavior. These false, deceptive and defamatory statements deceived and are likely to deceive the public, including Oracles and HPs Itanium customers. Making false representations and material omissions of fact to Oracle and the public in connection with the sale and advertisement of its Itanium products in violation of California Business and Professions Code section 17500 et seq., as explained above. Making false representations and material omissions of fact to Oracle and the public in connection with the sale and advertisement of its Itanium products in violation of the Lanham Act, 15 United States Code section 1501 et seq., as explained above. 79. HP had a duty to disclose material information to Oracle and the public
when it undertook to make public representations about Itaniums longevity. Instead, HP knowingly and actively concealed information from Oracle and the public. 80. HP had exclusive knowledge of this informationOracle and the public
did not know and could not have known about Itaniums real longevity. Accordingly, Oracle was unable to compete on a level playing field and lost business opportunities. 81. Oracle has suffered injury in fact and has lost money or property as a
direct and proximate result of HPs unlawful, unfair and deceptive conduct, and will continue to suffer such injury unless HPs conduct is enjoined and restrained by the Court. Oracle therefore 36
1 seeks an injunction pursuant to California Business and Professions Code section 17203 2 prohibiting HP from engaging in the unlawful, unfair and deceptive conduct described above. 3
82. Moreover, HP was unjustly enriched as a direct and proximate result of
4 HPs unlawful, unfair and deceptive conduct. Oracle seeks restitution pursuant to California 5 Business and Professions Code section 17203 to restore to Oracle all monies HP acquired as a 6 result of its unlawful, unfair and deceptive conduct. 7 8 9
83. FOURTH CAUSE OF ACTION (Defamation Libel) Oracle incorporates by reference the allegations in Paragraphs 1 through

84. HP has defamed Oracle by publishing numerous false and misleading
12 statements alleging Oracle has engaged in anti-competitive and anti-customer behavior, 13 including without limitation the statements referenced in Paragraph 33 above. 14
85. By and through these statements, HP has imputed to Oracle fraud,
15 dishonesty and questionable business practices in connection with Oracles sale and support of 16 its software and hardware products. 17
86. HPs statements were made without privilege and were published with
18 knowledge of their falsity or reckless disregard for their truth or falsity, i.e., with actual malice. 19
87. HPs statements were published with the intent of harming Oracle, its
20 reputation and its relationships with current and prospective customers. And in fact, Oracle has 21 suffered injury as a direct and proximate result of HPs conduct. Oracle has expended and 22 continues to expend substantial resources alleviating the baseless concerns fomented by HP, and 23 defending itself in the media. 24
88. HPs actions have damaged Oracle, in an amount to be proven at trial.
25 Oracle also seeks and is entitled to punitive damages because HPs statements were made with 26 knowledge of their falsity, or with reckless disregard of their truth or falsity and with the 27 intention of causing injury to Oracle. 28

37
89.
Additionally, Oracle demands a public apology from HP, and a public
2 acknowledgement that its defamatory statements against Oracle are false and were made with 3 knowledge of their falsity. 4 5 6
90. FIFTH CAUSE OF ACTION (Intentional Interference with Contractual Relations) Oracle incorporates by reference the allegations in Paragraphs 1 through

91. Oracle has existing valid contractual relationships with customers that
9 currently use Oracle products under which the customers have agreed to purchase and/or 10 compensate Oracle for services provided. 11 12
92. 93. HP has knowledge of these valid contractual relationships. HPs intentional actions and conduct, including without limitation those
13 set forth in Paragraphs 29-40 above, were and are designed to induce a breach and/or disruption 14 of Oracles contractual relationships with its existing customers. 15
94. HP has in fact disrupted Oracles existing contractual relationships,
16 resulting in customers seeking compensation and guarantees from Oracle, threatening to 17 withdraw their business from Oracle, and/or vowing not to do business with Oracle in the future. 18
95. HP knew that its conduct was certain or substantially likely to directly and
19 proximately cause the breach and/or disruption of Oracles contractual relationships with its 20 existing customers. 21
96. HPs intentional conduct has no lawful or legitimate competitive purpose.
22 To the contrary, HPs defamatory, deceptive, misleading, unfair, and unlawful conduct was 23 designed specifically to cause harm to Oracle and has violated California law. 24
97. Oracle has suffered injury to its business, including damage to its
25 reputation and customer relationships and lost sales, as a direct and proximate result of HPs 26 interference with its existing contractual relationships. 27 28

38
1 2 3
SIXTH CAUSE OF ACTION (Intentional Interference with Prospective Economic Advantage) 98. Oracle incorporates by reference the allegations in Paragraphs 1 through

99. Oracle has existing and prospective relationships with customers that
6 currently use or are considering using Oracle products. Many of these customers have existing 7 and ongoing contracts with Oracle under which they have agreed to purchase and/or compensate 8 Oracle for services provided. Oracle also has relationships and is in negotiations with 9 prospective customers who are considering the use of Oracle products or services in the future. 10 These relationships very likely would have resulted in future economic benefit to Oracle. HP has 11 knowledge of these relationships. 12
100. HP has intentionally sought to interrupt Oracles relationships with its
13 existing and prospective customers through the conduct described above, including without 14 limitation intentionally performing the acts and engaging in the conduct set forth in Paragraphs 15 29-40 above, designed to disrupt Oracles customer relationships. 16
101. HP has in fact disrupted Oracles existing and prospective customer
17 relationships, resulting in customers seeking compensation and guarantees from Oracle, 18 threatening to withdraw their business from Oracle, and/or vowing not to do business with 19 Oracle in the future. 20
102. HPs intentional conductdesigned to interfere with Oracles existing and
21 prospective customer relationshipshas no lawful or legitimate competitive purpose. To the 22 contrary, HPs defamatory, deceptive, misleading, unfair and unlawful conduct was designed 23 specifically to cause harm to Oracle and has violated California law. 24
103. Oracle has suffered injury to its business, including damage to its
25 reputation and customer relationships and lost sales, as a direct and proximate result of HPs 26 interference with its prospective economic relationships. 27 28

39
1 2 3
104.
SEVENTH CAUSE OF ACTION (Fraud / Equitable Rescission) Oracle incorporates by reference the allegations in Paragraphs 1 through

105. HP fraudulently induced Oracle to enter into the Hurd Agreement by
6 actively concealing material information, namely, that: (1) HP was secretly paying Intel $88 7 million per year to continue producing the Itanium chip and represent to the public its long8 term commitment thereto when Intel otherwise would have ceased Itanium development, and 9 (2) HP was in the process of hiring Messrs. Apotheker and Lane as its new executive leadership, 10 the intended consequence of which was to move HP into a new strategic direction less 11 complementary to and more competitive with Oracles business. HP had exclusive knowledge of 12 this informationit understood that Oracle did not know and could not have known of these 13 material facts. 14
106. HP understood that had Oracle known of HPs deal with Intel to
15 artificially extend Itaniums lifespan, Oracle would not have agreed to continue software 16 development for Itanium in perpetuity as HP alleges Oracle did pursuant to Paragraph 1 of the 17 Hurd Agreement. 18
107. Moreover, given the well-documented animosity between Oracle and
19 Messrs. Apotheker and Lane, HP knew that had Oracle known of HPs imminent plans to hire 20 these individuals, Oracle would not have signed the Hurd Agreement, especially any 21 partnership commitments or other business restrictions (e.g., Paragraph 7 of the Hurd 22 Agreement) unrelated to Mr. Hurds move to Oracle. 23
108. HP had a duty to disclose this exclusively-held material information.
24 Instead, HP knowingly and actively withheld this information from Oracle with the intent to 25 fraudulently induce Oracle to enter into the Hurd Agreement. 26
109. In addition to concealing this information from Oracle, HP made
27 representations to Oracle in the context of negotiating the Hurd Agreement regarding Itaniums 28

40
1 future and HPs alleged desire for an ongoing partnership. HP knew that these affirmative and 2 incomplete statements of its intentions were likely toand didmislead Oracle. 3
110. Oracle did not know and could not have known during negotiation of the
4 Hurd Agreement that HP had entered into secret agreements with Intel, or that HP was secretly 5 in the process of hiring senior executives whose interests were in sharp conflict with Oracles. 6 Moreover, because there was no actual, threatened or contemplated judicial or quasi-judicial 7 proceeding between HP and Oracle at the time of HPs fraudand in fact, HP had publicly 8 represented that it had no intention of bringing any legal claims against OracleOracle had and 9 expected no opportunity to present any claim or defense or to conduct any discovery regarding 10 the subject matter of its negotiations with HP in any legal proceeding. Moreover, HPs fraud did 11 not go to the subject matter of the dispute that was in litigation, its purported trade 12 secrets/employment claim against Mr. Hurd. HPs fraud was thus extrinsic. 13
111. Ignorant of HPs plans regarding Itanium and Messrs. Apotheker and
14 Lane, Oracle was induced to enter into the Agreement. Had Oracle known these material facts, 15 Oracle would not have signed the Agreement nor bound itself to any of the obligations contained 16 therein, regardless of scope or specificity, including the business restrictions on it. 17 18 19
112. 113. 114. Oracles reliance was reasonable and justifiable. Oracle has suffered injury as a direct and proximate result of HPs fraud. Oracle seeks equitable rescission of the Hurd Agreement. Oracle also
20 seeks damages for the economic injury and lost business opportunities it has suffered as a direct 21 and proximate result of HPs fraud, including attorneys and other fees expended in defending 22 against HPs lawsuit and prosecuting this cross-complaint, in an amount to be proven at trial. 23
115. HPs conduct was malicious, oppressive and fraudulent, and Oracle is
24 therefore entitled to an award of punitive and exemplary damages. 25 /// 26 27 28

41
1 2 3 4 5 6
1. 2. 3. 4.
PRAYER FOR RELIEF WHEREFORE, Oracle prays for judgment against HP as follows: Equitable rescission of the Hurd Agreement; General and special damages in an amount to be proven at trial; Punitive damages as permitted by law; Permanent injunctive relief, including an order prohibiting HP from making
7 false and misleading statements regarding Oracles business practices and commitment to its 8 customers and remedying the harm caused by HPs conduct; 9 10 11 12 13
5. 6. 7. Reasonable attorneys fees as permitted by law; Costs of suit herein incurred; and All such other and further relief as the Court may deem proper. DEMAND FOR JURY TRIAL Cross-Complainant Oracle hereby demands a trial by jury in the above-captioned
14 matter on all matters so triable. 15 16 Dated: December 2, 2011 17 18 19 20 21 22 23 24 25 26 27 28

LATHAM & WATKINS LLP Daniel M. Wall
By
Daniel M. Wall Attorneys for Defendant and CrossComplainant Oracle Corporation
SF\886162
42

HP V Oracle - Amended Cross Complaint

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HP V Oracle - Amended Cross Complaint

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1 LATHAM & WATKINS LLP 2 3 4 5 6 7 8 9

10 Attorneys for Defendant and Cross-Complainant 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

ORACLE CORPORATION, Cross-Complainant, v. HEWLETT-PACKARD COMPANY, Cross-Defendant.

EXHIBIT A CONDITIONALLY FILED UNDER SEAL IN ITS ENTIRETY

Cross-Complainant Oracle Corporation (Oracle) alleges against Cross-

2 Defendant Hewlett-Packard Company (HP) as follows: 3 4

Ex. A (Hurd Agreement (Sept. 20, 2010)).

HP actively concealed the following material information relating to Itanium:

25 include, without limitation, the following: 26 27 28

HP continued its defamatory campaign by filing this lawsuit against

Ex. A (Hurd Agreement (Sept. 20, 2010)).

2 the following articulation of Paragraph 1: 3 4 5 6 7 8

6 64 above as though fully set forth herein. 7

8 proscribed by section 43(a) of the Lanham Act, 15. U.S.C. 1125(a): 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

4 64 above as though fully set forth herein. 5

6 by California Business and Professions Code section 17500 et seq.: 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

HP had a duty to disclose material information to Oracle and the public

HP had exclusive knowledge of this informationOracle and the public

16 64 above as though fully set forth herein. 17

18 and deceptive business practices: 19 20 21 22 23 24 25 26 27 28

10 64 above as though fully set forth herein. 11

Additionally, Oracle demands a public apology from HP, and a public

7 64 above as though fully set forth herein. 8

4 64 above as though fully set forth herein. 5

4 64 above as though fully set forth herein. 5

24 therefore entitled to an award of punitive and exemplary damages. 25 /// 26 27 28

14 matter on all matters so triable. 15 16 Dated: December 2, 2011 17 18 19 20 21 22 23 24 25 26 27 28

LATHAM & WATKINS LLP Daniel M. Wall

Daniel M. Wall Attorneys for Defendant and CrossComplainant Oracle Corporation

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