Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Up for Another Round of “Where’s Léo?” Why HP’s Lawsuit Is a Gift for Oracle.

Last week, Hewlett-Packard sued software giant Oracle, seeking to force it to reverse a decision, announced in March, that it would cease creating software that supports Intel’s Itanium chip. HP, as the only major vendor to sell servers using the chip, argued that Oracle is not only hurting many customers the two companies share, but trying to cajole them into buying Oracle hardware. And on top of that, Oracle is also violating a contractual agreement to continue to support the Itanium chip going forward, HP said. It’s kind of a long story, but it’s fair to call this a very public fight over a very obscure chip.

However, in filing the lawsuit, HP may have just handed Oracle a chance to do something it has been eager to do for nearly a year: Ask Léo Apotheker a few questions concerning the theft of some Oracle code by a subsidiary of the software company of which he used to be CEO. That would be SAP.

When Apotheker joined HP as its new CEO last year, his first day on the job occurred just as the trial in an Oracle lawsuit against SAP was wrapping up. Oracle sought to subpoena Apotheker, but its process servers couldn’t find him. Thus began one of the more bizarre episodes in the newly contentious Oracle-HP rivalry. HP said its CEO was on a “listening tour” of company facilities around the world. It couldn’t help but look like Apotheker was making himself scarce in the face of a subpoena. In a play on the “Where’s Waldo?” series of children’s books, people watching the unfolding drama joked: “Where’s Léo?

SAP ultimately admitted to the theft over which Oracle had sued. It had been committed by its TomorrowNow subsidiary, which SAP acquired in 2005. And who ran that business after the acquisition? You guessed it: Léo Apotheker. Put that way, Oracle’s eagerness to ask him some questions was understandable.

Twice, Oracle CEO Larry Ellison publicly taunted Apotheker about being “on the run.” SAP called the histrionics “a sideshow.” HP called it harassment.

It seemed to end when Oracle got what it wanted: A big payout from SAP. But Oracle’s desire to ask Apotheker questions about L’Affaire TomorrowNow lingered.

They will probably get their chance with the Itanium lawsuit, and won’t miss the opening to pounce on the opportunity to paint Apotheker and HP in a bad light. And as the head of the company that has brought the suit, Apotheker can’t easily refuse to be deposed by Oracle lawyers. I talked with a few lawyers yesterday and they told me that in depositions — the pretrial testimony that takes place outside the courtroom — lawyers have a wide latitude regarding the questions they ask. Unless an answer is covered by attorney-client privilege, or is privileged in some other way, Apotheker will probably end up having to answer whatever Oracle’s lawyers ask him about his time at SAP, and what he knew and didn’t know about TomorrowNow.

Does it really matter today? Of course not. Oracle has extracted its pound of flesh from SAP, and the bearing of those issues on the Itanium case is aguably minimal. But Oracle lawyers will press every advantage they can get ahead of trial.

And by the way, if the Itanium case ever goes to trial, Oracle will also call Apotheker to the witness stand, and will certainly seek to ask him SAP-related questions once again. The opportunity to describe Apotheker before a jury as “the former CEO of the company that admitted to stealing from Oracle” is simply too good to pass up. HP lawyers will object, saying the SAP case isn’t relevant. Oracle lawyers will counter that Apotheker’s history as an executive is relevant, and a judge will have to decide whether the issue is in bounds or out. Simply by raising the issue in court, Oracle’s lawyers will have done their job, casting a negative light on Apotheker in the court of public opinion. And often — to Oracle — that venue matters more than any court of law.

Of course, all of this is simply my speculation. I’ve not spoken to lawyers for either side. Oracle had no comment. HP had no comment, either. But when you think about the current state of play between HP and Oracle and consider what has gone before, it’s pretty easy to see at least some of what’s coming. Of course Oracle and HP could settle this whole matter with a handshake tomorrow and be done with it. But we’re not at that point yet.

Last year, during the time that Oracle sought to subpoena Apotheker, HP said that Oracle had already deposed Apotheker for a full eight hours in 2008 before the Oracle-SAP trial had started. And while that’s true, that deposition occurred before SAP had admitted to the theft.

Then does the question come back to relevance? What does what occurred between SAP and Oracle have to do with the current dispute between HP and Oracle? As noted above, HP and Oracle will argue over this, but in HP’s defense, nearly all the agreements and contracts between HP and Oracle concerning Itanium would have been struck before Apotheker joined HP.

It’s also fair to observe that Apotheker’s apparent importance as a witness in that trial increased markedly only after he was named CEO of HP. And you can’t mention the circumstances of his becoming HP’s CEO without mentioning the friction caused between HP and Oracle when Mark Hurd resigned as HP’s CEO, only to join Oracle as co-president a month later. That move generated a lawsuit too, one that was later settled.

So will Oracle lawyers ask Apotheker their questions about SAP and TomorrowNow and what he knew or didn’t know about the theft of Oracle trade secrets? Probably, at least once, and maybe once again, assuming the case goes to trial. Will it serve much purpose for Oracle, beyond irritating and embarrassing HP and Apotheker? Probably not. But then, given the state of the relationship between Oracle and HP these days, that is probably the point.


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