Joint Final Pre-trial Conference Statement

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JOINT FINAL PRE-TRIAL CONFERENCE STATEMENT CASE NO. 1-11-CV-203163

Gibson, Dunn & Crutcher LLP

GIBSON, DUNN & CRUTCHER LLPROBERT E. COOPER, SBN 35888 [email protected] SAMUEL LIVERSIDGE, SBN 180578 [email protected] 333 South Grand Avenue Los Angeles, CA 90071-3197 Telephone: 213.229.7000 Facsimile: 213.229.7520 BARTLIT BECK HERMAN PALENCHAR & SCOTT LLP MARK E. FERGUSON, (pro hac vice) [email protected] SEAN W. GALLAGHER, (pro hac vice) [email protected] 54 West Hubbard Street, Suite 300 Chicago, Illinois 60654 Telephone: 312.494.4400 Facsimile: 312.494.4440

Attorneys for Plaintiff and Cross-Defendant HEWLETT-PACKARD COMPANY LATHAM & WATKINS LLP DANIEL M. WALL, SBN 102580, [email protected] ALFRED C. PFEIFFER, JR., SBN 120965, [email protected] SADIK HUSENY, SBN 224659, [email protected] 505 Montgomery Street, Suite 2000 San Francisco, California 94111 Telephone: 415.395.8240 Facsimile: 415.395.8095 Attorneys for Defendant and Cross-Complainant ORACLE CORPORATION

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF SANTA CLARA

HEWLETT-PACKARD COMPANY,

Plaintiff and Cross-Defendant,

v.

ORACLE CORPORATION,

Defendant and Cross-Complainant.

Case No. 1-11-CV-203163 Complaint Filed: June 15, 2011 Trial Date: May 31, 2012

JOINT FINAL PRE-TRIAL CONFERENCE STATEMENT Hearing Date: May 16, 2012 Hearing Time: 1:30 PM Dept: 1C

Assigned for all Purposes to The Honorable James P. Kleinberg

E-FILEDMay 14, 2012 11:44 AM

David H. YamasakiChief Executive Officer/Clerk

Superior Court of CA, County of Santa ClaraCase #1-11-CV-203163 Filing #G-42892

By R. Walker, Deputy

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1 JOINT FINAL PRE-TRIAL CONFERENCE STATEMENT CASE NO. 1-11-CV-203163


Plaintiff Hewlett-Packard Company (�“HP�”) and Defendant Oracle Corporation (�“Oracle�”)

hereby submit this Joint Pre-Trial Conference Statement.

I. Trial Schedule and Structure

The parties agree that the trial should begin on May 31, 2012, the date set by the Court. The

parties also agree that the Court should allocate a specific number of hours to each party to present its

case. The parties disagree on the structure of the trial. Each party�’s position is set forth below.

A. HP�’s Position

This is a breach of contract case. The basic issue to be tried is whether Oracle breached its

obligation under Paragraph 1 of the Hurd Settlement Agreement to continue to offer its product suite

on HP�’s server platforms. HP proposes a standard jury trial on all issues related to HP�’s breach of

contract claim, including issues of duty, breach and damages, as well as on all other legal claims and

cross-claims. HP does not believe that the contract issues presented in this case warrant any special

phasing or bifurcation. HP thus proposes that each side be given eight trial days (approximately 36

hours) to present its case-in-chief and one day for rebuttal, for a total of 18 trial days, with the Court

reserving until conclusion of the evidence what issues it will decide itself, rather than the jury.

In contrast, Oracle proposes to bifurcate the trial before the jury into two phases, with the first

week limited to contract interpretation issues and the remainder of the trial to issues of breach,

damages and the other claims and cross-claims. Under Oracle�’s proposal, the parties would engage

in opening statements �“limited to the contract and contract-like claims�” and then present witnesses

who would testify on issues relating to �“contract formation, course of dealing, course of performance

and other issues relevant to interpretation.�” Oracle proposes that the Court would step in at that

juncture and consider motions for directed verdict, and either adjudicate HP�’s declaratory relief claim

or at least fill in any �“gaps�” in the terms of the contract. If HP�’s contract claims survive motions for

directed verdict, there would be another round of opening statements �“covering breach, damages and

any remaining claims,�” and then the parties would present (and recall) witnesses on those issues.

Oracle�’s proposed trial structure would unnecessarily complicate the trial without creating any

economy or efficiency for the Court, the parties, the witnesses or the jurors. This is not a situation

where Oracle is proposing to try a very narrow or limited threshold issue first so as to avoid a lengthy

E-FILED: May 14, 2012 11:44 AM, Superior Court of CA, County of Santa Clara, Case #1-11-CV-203163 Filing #G-42892

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presentation of evidence on other issues that might be rendered unnecessary by the decision on the

threshold issue. The evidence relating to the parties�’ �“course of dealing�” and �“course of

performance�” will likely be considerable. In addition, as Oracle itself recognizes, many of the

witnesses who would need to be called in the second phase to testify regarding breach, damages and

the other claims would also have testified in the first phase, including senior executives such as Ann

Livermore, Dave Donatelli, Martin Fink, Larry Ellison, Safra Catz, Mark Hurd, and Dorian Daley.

Oracle has proposed this bifurcated structure not to achieve any efficiency but rather to

fashion a litigation advantage by artificially compartmentalizing the presentation of evidence so that

evidence relating to �“interpretation�” is divorced from evidence relating to �“breach.�” Oracle

undoubtedly is pursuing this strategy to prevent HP from being able to effectively present its full

story regarding Oracle�’s breach of the contract and the covenant of good faith and fair dealing. But

there is no legitimate justification for Oracle�’s attempt to unfairly advantage itself by hamstringing

HP�’s presentation of evidence, particularly in light of the inefficiency and inconvenience that

Oracle�’s novel structure would cause.

Breach of contract cases are tried routinely in standard jury trials without resort to complex

phasing or bifurcation of issues. There is nothing unique about the contract interpretation issues in

this case that would require the unusual and convoluted trial structure that Oracle proposes. Rather,

the trial of this case should proceed in the usual manner with a trial of all issues, which will allow

each party to �“present[] a coherent picture to the trier of fact�” while also avoiding the need to call key

witnesses twice, with two rounds of opening statements, and the inevitable disputes that will arise

between the parties as to what evidence is properly within the scope of Oracle�’s proposed first phase.

(See Deskbook on the Management of Complex Civil Litigation §2.61[3][a].)

Oracle would have the Court adjudicate, as a threshold matter before any evidence relating to

breach or damages is presented to the jury, the interpretation of the contract for purposes of HP�’s

declaratory relief claim, or failing that, at least fill in any gaps in the contract�’s terms. Oracle�’s

premise that the declaratory relief claim should be decided by the Court separately from the breach of

contract claim is wrong. Declaratory actions may raise equitable or legal issues. (Patterson v.

Insurance Co. of North America (1970) 6 Cal.App.3d 310, 315.) Here, because a breach of contract


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is involved, the issues are legal. (Abbott v. Los Angeles (1958) 50 Cal.2d 438, 462.) Moreover, the

fundamental question at issue for purposes of HP�’s breach of contract and declaratory relief claims is

the same: whether Paragraph 1 obligated Oracle to continue to port its product suite to HP�’s

platforms. Thus, HP�’s breach of contract and declaratory relief claims are overlapping and tightly

intertwined, and therefore should be resolved together by the jury or, if there are no conflicts in the

extrinsic evidence, by the Court. (See Unilogic, Inc. v. Burroughs Corp. (1992) 10 Cal.App.4th 612,

622-623 [jury should decide equitable issues �“intertwined with the parties�’ legal causes of action�”].)

While contract interpretation is often a judicial function, �“[j]uries are not prohibited from

interpreting contracts.�” (City of Hope Nat. Med. Ctr. v. Genentech, Inc. (2008) 43 Cal.4th 375, 395.)

Interpretation of a contract �“becomes solely a judicial function only when it is based on the words of

the instrument alone�” or �“when there is no conflict in the extrinsic evidence.�” (Id.) But where

interpretation depends on the credibility of extrinsic evidence, �“that credibility determination and the

interpretation of the contract are questions of fact that may properly be resolved by the jury.�” (Id.;

Horsemen�’s Ben. & Pro. Assn. v. Valley Racing Assn. (1992) 4 Cal.App.4th 1538, 1562.)

Nor is there any requirement that the Court set a separate initial phase of the trial to conduct a

�“gap filling�” exercise. To begin with, HP disagrees that this case requires a �“gap filling�” exercise.

Oracle is attempting to make things appear much more complicated than they are. HP�’s claim in this

case is that Oracle breached a contract that required Oracle to continue to offer its product suite on

HP�’s server platforms. Whether Oracle had this duty and whether it breached the contract are the

basic issues to be resolved in the case. It is not clear what, if any, terms even need to be inferred to

resolve these basic issues but, regardless, it is not necessary or efficient to try to make this

determination in a bifurcated phase of the trial. These issues will be resolved by the jury and/or the

Court in the normal course of the trial as routinely happens in breach of contract cases. (See, e.g.,

Genentech, 43 Cal.4th at 385, 395-397 [jury resolved issues of interpretation and breach in one trial];

DVD Copy Control Assn, Inc. v. Kaleidescape, Inc. (2009) 176 Cal.App.4th 697, 718-719

[interpretation �“is part of the breach analysis�”]); San Francisco Brewing Corp. v. Bowman (1959) 52

Cal.2d 607, 615 [jury resolved missing duration term].)


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Even if it falls to the Court to infer any necessary terms, Oracle�’s proposal for a two-phase

trial does not makes sense. The more logical and typical approach is for the Court to make

appropriate rulings after all the evidence has been presented and then instruct the jury on any findings

it is required to make. And following the trial the Court can, if necessary, then take up any issues

relating to equitable remedies such as specific performance. This approach clearly is more efficient

and avoids building into the trial structure an artificial hurdle HP must clear before presenting all of

the evidence on its breach of contract claim. As Oracle�’s proposal fails to promote �“the convenience

of witnesses, the ends of justice or the economy and efficiency of handling the litigation,�” as Code of

Civil Procedure Section 598 requires, the Court should deny Oracle�’s request.

B. Oracle�’s Position

Oracle and HP have agreed to dismiss several causes of action. HP�’s remaining causes of

action are for: declaratory relief (the first cause of action in HP�’s Complaint); breach of contract

(second); breach of the covenant of good faith and fair dealing (third); breach of an implied contract

(fourth); promissory estoppel (fifth); and violation of Cal. Bus. & Prof. Code § 17200 (tenth).

Oracle�’s remaining causes of action are for: violation of the Lanham Act (the first cause of action in

Oracle�’s Amended Cross Complaint); violation of Cal. Bus. & Prof. Code § 17500 (second); and

violation of Cal. Bus. & Prof. Code § 17200 (third).

1. Oracle Proposes that the Trial Proceed in Two Stages

Oracle proposes that the trial be structured in two stages. The first stage will address the

following issues, collectively referred to as the �“Issues of Duty�”: (i) the meaning of the first

paragraph of the Hurd Settlement Agreement, (ii) whether an implied-in-fact contract exists between

the parties, and (iii) whether Oracle owes HP any duty under principles of promissory estoppel. The

second stage will address the remaining issues in the case.

For the first stage, opening statements will take place on Monday, June 4, and will be limited

to the Issues of Duty. The witnesses presented that week must relate to, and testify regarding only,

the Issues of Duty, including matters of contract formation, course of dealing, course of performance,

and other relevant topics. At the end of the first week, the Court will (a) adjudicate HP�’s Declaratory

Relief cause of action for equitable relief and (b) if necessary, supply any contract terms that the


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Court concludes are warranted using �“gap-filling�” principles. See HP Opp. to Oracle Mot. for Summ.

Adj. at 25-26 (�“HP Opp.�”). The Court will also consider at this time motions for directed verdict

limited to the Issues of Duty.

It is clear that adjudicating HP�’s Declaratory Relief cause of action and �“gap-filling�” are

judicial responsibilities. See Parts B.2 and C below. Accordingly, there may be no need to make the

jury sit through the first stage. Oracle believes the pros and cons of having the jury hear this

testimony should be addressed at the Pretrial Conference.

Trial on issues other than Issues of Duty will proceed immediately after the Court adjudicates

HP�’s Declaratory Relief cause of action and engages in any appropriate �“gap-filling,�” with opening

statements on all remaining issues, with HP completing its case-in-chief on its causes of action and

Oracle putting on its defense and cross-claims.

In order to address the Issues of Duty during the first week of trial, Oracle respectfully asks

the Court to increase slightly the length of the first four court days so that the Court is in session from

8:00 AM until 3:00 PM. HP and Oracle will split the available time the first week, with each side

having the right to call witnesses, including adverse witnesses. Each witness called during the first

phase of trial will be subject to being recalled to address issues reserved to the second phase.

2. No Other Structure Makes Practical Or Legal Sense

a. There is no other practical way to proceed

The practical logic of Oracle�’s proposal is straightforward: Oracle cannot defend itself against

any claim of contract or quasi-contract breach unless and until it knows the contours of the operative

duty. The parties agree that the details of the alleged duty are not the subject of any material factual

disputes and, indeed, were never even discussed during negotiations. See HP Opp. at 7:4-7. HP has

conceded that even if its basic contract interpretation prevails, the Court must still engage in �“gap-

filling�” to supply terms not actually present in the Hurd Settlement Agreement. See HP Opp. at 26:15-

27 (duration); id. at 25:21-25 (payment); id. at 25:6-20 (products).1 So numerous critical details

1 To the extent that the Court is going to embark on a process of gap-filling, the exercise should not be a one-

way street in HP�’s favor. Oracle will ask the Court, for example, to enforce the parties�’ unbroken past practice of barring liability for lost profits whenever they enter binding porting agreements. See Oracle

(Cont�’d on next page)


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regarding the content of Oracle�’s obligation will remain unknown until the Court says what they are.

Yet without knowing what the supposed terms of duration, payment and scope are, Oracle would be

severely prejudiced in its effort to show the fact-finder that Oracle did not breach such a contract.2

The gap-filling exercise is focused on the same undisputed evidence that underlies HP�’s

arguments regarding the meaning of the Reaffirmation Provision in the Hurd Settlement Agreement,

and its implied contract and promissory estoppel claims. See HP Opp. at 24-27; 29-30. According to

HP, the parties�’ pre-September 2010 �“course of dealing�” informs both the viability of its claims

(whether the supposed contract HP claims to exist is even plausible) and any gap-filling that the

Court must perform. So the Court must consider the �“course of dealing�” evidence at the outset, both

to fulfill its �“gap-filling�” duties and to determine whether that course of dealing permits HP�’s various

contractual theories to proceed to the jury (assuming that HP has a right to take any claims to a jury).

It is bad enough that so close to trial so much about the alleged contracts is unknown. But it

would be a due process violation to require Oracle to defend claims of breach before the Court rules

on the meaning of the contract. The only fair and sensible way to proceed in light of these concerns is

for the Court to determine the contract�’s meaning before the parties litigate whether a breach occurred.

b. Oracle�’s proposal follows the �“equity first�” rule

The �“equity first�” rule also requires that the Court proceed as Oracle suggests:

It is beyond dispute that where both legal and equitable issues are present, a jury may be empanelled to try the legal issues, and may also at the court's discretion be asked for advisory verdicts as to facts which may apply to the equitable issues, and that the �‘equity first�’ rule is the court should resolve the equitable issues first (see Jaffe v. Albertson Co. (1966) 243 Cal.App.2d 592, 609�–610, 53 Cal.Rptr. 25), and that the court's resolution of the equitable issues may resolve the legal issues.

A-C Co. v. Sec. Pac. Nat. Bank, 173 Cal. App. 3d 462, 473 (4th Dist. 1985).

HP�’s cause of action for declaratory relief is equitable, not legal. HP seeks (a) a declaration

that requires the Court to engage in the equitable practice of gap-filling and (b) the equitable remedy

(Cont�’d from previous page)

Corporation�’s Motion In Limine to Exclude Evidence of Hewlett Packard Company�’s Claims for Lost Profits (not yet filed; attached hereto as Exhibit A).

2 HP�’s �“core factor�” pricing claim illustrates this problem. Without knowing what limits the Hurd Settlement Agreement imposes on Oracle�’s ability to set market prices for its products, Oracle cannot feasibly mount a defense that it did not exceed those limits.


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of specific performance. See Williston on Contracts § 77:17 (characterizing the �“discretion to supply

an omitted but essential term�” as �“equitable�”). As a result, the �“gist�” of HP�’s declaratory relief cause

of action is equitable. See Dow Jones Co. v. Avenel, 151 Cal. App. 3d 144, 147-48 (1st Dist. 1984)

(�“[T]he constitutional guaranty of the right to a jury trial does not apply to actions involving the

application of equitable doctrines and the granting of relief that is obtainable only in courts of

equity.�”); C&K Engineering Contractors v. Amber Steel Co., 23 Cal. 3d 1, 9 (1978) (whether an

action is legal or equitable depends upon its �“gist�”). Thus, under the �“equity first�” rule, the Court

should resolve HP�’s declaratory relief claim before any legal cause of action HP has.3

Another threshold question for the Court is whether the terms of the Hurd Agreement are

sufficiently defined to support the award of specific performance. This is at its core a question of

duty: regardless of whether Oracle breached the contract, can its terms support the extraordinary

equitable remedy that HP seeks? The requisite threshold of �“definiteness�” is higher when a contract

claim seeks equitable relief rather than just damages. See Cal. Jur. 3d Contracts § 100 (collecting

cases); Weddington Prods. v. Flick, 60 Cal. App. 4th 793, 816; Oracle Mot. for Summ. Adj. at 22 n.

13. The Court needs to decide whether, as a matter of law, specific performance is an available

remedy under this contract. See Ladas v. Cal. State Auto Ass�’n, 19 Cal. App. 4th 761, 770 n.2 (1st

Dist. 1993). The �“equity first�” principle dictates that the Court make that determination before the

adjudication of legal issues. See Hoopes v. Dolan, 168 Cal. App. 4th 146, 156-57 (1st Dist. 2008).

Finally, the Court must resolve HP�’s prayer for specific performance before there can be any

consideration of its claim for damages, because HP�’s expert has estimated damages on the express

assumption that HP does not win specific performance. As a result, he assumes in estimating

damages that Oracle�’s newly-developed products remain unavailable on HP�’s Itanium servers going

forward. Frankly, that is a reasonable assumption in this case, but it is not HP�’s position�—HP

3 This proposal is predicated on the Court�’s denying Oracle�’s Motion for Summary Adjudication. The

Court�’s determination that factual disputes preclude an interpretation of the contract without trial does not, of course, mean that those disputes must be resolved by a jury. Because HP�’s declaratory relief cause of action is equitable, it is the Court�’s responsibility to make any factual findings necessary to interpret the contract.


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continues to seek specific performance. If the Court were to order specific performance, of course,

that assumption would no longer be valid.

3. HP Has No Right to a Jury Trial On Any Cause of Action

As this case has developed, it has become clear that there is no longer any basis for even

empanelling a jury on the Issues of Duty. HP�’s own �“course of dealing�” argument dictates that it

cannot seek monetary damages on any of its contract or quasi-contract claims.4 As a result, HP�’s only

cognizable claim for relief on any of those causes of action is for specific performance, which as an

equitable doctrine gives no right to a jury trial. See Lost Profits Motion in Limine (Exhibit A hereto)

at 7-8; see also Van de Kamp v. Bank of Am., 204 Cal. App. 3d 819, 865 (2d Dist. 1988). HP�’s

declaratory relief cause of action is also equitable in this instance. See Manneck v. Lawyers Title

Insurance Corporation, 28 Cal. App. 4th 1294,1299-1300 (2d Dist. 1994); Benach v. County of Los

Angeles, 149 Cal. App. 4th 836, 845-57 (2d Dist. 2007). That means that HP has no jury trial right on

its first through fourth causes of action.

HP also has no right to a jury trial on its remaining two claims in this action. HP�’s fifth cause

of action, for promissory estoppel, is equitable. See C&K Engineering Contractors, 23 Cal. 3d at 8.

HP�’s tenth cause of action, for violation of Cal. Bus. & Prof. Code section 17200, is also equitable.

See Hodge v. Superior Court, 145 Cal. App. 4th 278, 284 (2d Dist. 2006).

With none of HP�’s remaining claims in this litigation giving rise to a jury trial right, HP�’s

entire case ought simply be tried to the Court.

II. Issues To Be Tried

Although the parties have met and conferred on the issues to be tried at trial, they have been

unable to reach agreement on a joint submission of these issues. Therefore, each party�’s respective

issues are separately set forth below.

4 We explain this in greater detail in Oracle�’s accompanying Motion In Limine to Exclude Evidence of

Hewlett Packard Company�’s Claims for Lost Profits (�“Lost Profits Motion in Limine�”) (not yet filed pursuant to the Court�’s scheduling order; attached hereto as Exhibit A).


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A. HP�’s Proposed Issues To Be Tried

Declaratory Relief

• Does Paragraph 1 of the Settlement Agreement require Oracle to continue to offer its product suite on HP�’s Itanium-based servers in a manner consistent with the HP-Oracle partnership as it existed prior to Oracle�’s hiring of Mark Hurd?

Breach of Contract

• Does Paragraph 1 of the Settlement Agreement require Oracle to continue to offer its product suite on HP�’s Itanium-based servers in a manner consistent with the HP-Oracle partnership as it existed prior to Oracle�’s hiring of Mark Hurd?

• Was Oracle�’s March 22, 2011 decision to stop offering new versions of the products in its software suite on HP�’s Itanium-based servers a breach of the Settlement Agreement?

• Was HP harmed by Oracle�’s breach of the Settlement Agreement?

• If HP was harmed, what is the dollar amount that will reasonably compensate HP for the harm caused by Oracle�’s breach of the Settlement Agreement?

• What are the appropriate, additional remedies based on the jury verdict and/or the Court�’s findings?

Breach of Covenant of Good Faith and Fair Dealing

• Was Oracle�’s March 22, 2011 decision to stop offering new versions of the products in its software suite on HP�’s Itanium-based servers, including the manner in which that decision was implemented, a breach of the covenant of good faith and fair dealing?

• Was Oracle�’s December 1, 2010 decision to double the core factor used to determine the licensing fee charged by Oracle for software offered on certain of HP�’s Itanium-based servers a breach of the covenant of good faith and fair dealing?

• Was HP harmed by Oracle�’s breaches of the covenant of good faith and fair dealing?

• If HP was harmed, what is the dollar amount that will reasonably compensate HP for the harm caused by Oracle�’s breach of the covenant of good faith and fair dealing?

Breach of Implied Contract

• Was Oracle�’s March 22, 2011 decision to stop offering new versions of its software products on HP�’s Itanium-based servers a breach of an implied contract between Oracle and HP?

• Was HP harmed by Oracle�’s breach of the implied contract between Oracle and HP?

• If HP was harmed, what is the dollar amount that will reasonably compensate HP for the harm caused by Oracle�’s breach of the implied contract between Oracle and HP?

Promissory Estoppel

• Did HP reasonably and foreseeably rely upon Oracle�’s promises to continue software development for the Itanium platform?


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• Was HP harmed by Oracle�’s failure to honor its promises to continue software development for the Itanium platform?

• If HP was harmed, what is the dollar amount that will reasonably compensate HP for the harm caused by Oracle�’s failure to honor its promises to continue software development for the Itanium platform?

Violation of Bus. & Prof. Code § 17200

• Does Oracle�’s conduct constitute unfair competition, including any unlawful, unfair or fraudulent business act or practice, or unfair, deceptive, untrue or misleading advertising?

• What equitable relief is appropriate if the Court finds a violation?

Lanham Act (Oracle Cross Claim)

• Did HP make false or misleading statements of fact in a commercial advertisement about a material aspect of the nature, quality or characteristics of its Itanium servers that likely influenced the purchasing decision of high-end, mission critical server customers?

• Did HP know that such statements were false or have serious doubts about whether they were true?

• Did such statements actually deceive or have a tendency to deceive a substantial segment of high-end, mission critical server customers?

• Did such statements harm Oracle by diverting sales from Oracle to HP?

Violation of Bus. & Prof. Code § 17200 (Oracle Cross Claim)

• Does HP�’s conduct constitute unfair competition, including any unlawful, unfair or fraudulent business act or practice, or unfair, deceptive, untrue or misleading advertising?


B. Oracle�’s Proposed Issues To Be Tried

HP�’s �“First Cause of Action: Declaratory Relief�—Cal. Civ. Proc. Code § 1060�”

• Whether HP and Oracle objectively manifested a mutual intent to strike the same bargain�— a present and future commitment to port Oracle software to the HP-UX platform without compensation, and database pricing protection �—in the Reaffirmation Provision in the Hurd Agreement.

• What was the mutual intention of the parties, as it existed at the time the Hurd Agreement was executed, as to the meaning of the Reaffirmation Provision of the Hurd Agreement, specifically regarding the software development and pricing obligations HP claims Oracle undertook and the product support obligations HP claims to have undertaken itself?

• What specific contractual duties and obligations should the Court add to the Reaffirmation Provision using �“gap-filling�” principles, particularly as to:

o the scope of the Oracle products and HP platforms covered; o the duration of any support or development obligations;


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o the payments involved with any support or development obligations; o HP�’s obligation to provide equipment to enable Oracle to carry out any development

obligations; o intellectual property rights in any resulting software; o Oracle�’s ability and discretion to set the license pricing for its software products in the

future; o termination or modification rights as to any support or development obligations; o remedies that may be sought by the parties in the event of a breach; o the nature and scope of any other �“partnership�” obligations allegedly reaffirmed

between the companies.

• How many, and which of, the terms from the parties�’ express Porting Agreements should the Court use to �“fill in the gaps�” of the Reaffirmation Provision? Which of the express Porting Agreements should the Court use where the terms of different agreements conflict?

• How does the Reaffirmation Provision affect the parties�’ obligations regarding products, such as the E-Business Suite, as to which Oracle and HP had executed express, written Porting Agreements at the time the Hurd Agreement was executed?

• Whether the Court should ultimately issue the two judicial declarations that HP seeks in its Complaint regarding the software development and pricing contractual obligations that the parties allegedly agreed to in the Reaffirmation Provision:

o �“declaring specifically that, as to any Oracle software product that was offered on HP�’s Itanium-based server platforms at the time Oracle signed the Hurd Agreement, Oracle is required to continue to offer and support that product, including any new versions, revisions, patches or updates of the product, on HP�’s Itanium-based server platforms in a manner and on terms consistent with the way those products were offered and supported prior to Oracle�’s hiring of Hurd.�” (Compl. ¶ 115)

o declaring �“that the Hurd Agreement requires Oracle (i) to maintain the pricing formula for its software license for HP�’s Itanium-based server platforms in a manner consistent with the way in which that formula was defined prior to Oracle�’s hiring of Hurd; and (ii) to release its products, including any new versions, revisions, patches or updates of those products, for HP�’s Itanium-based server platforms consistent with the timing of when such products were released, in relation to other UNIX architectures, prior to Oracle�’s hiring of Hurd. The specific Oracle products as to which HP seeks this declaratory judgment include, but are not limited to, the Oracle database (including version 12g)�” (Compl. ¶ 115)

HP�’s �“Second Cause of Action: Breach of Contract�”

• Whether HP �“has performed and intends to perform all conditions, covenants, and promises required on its part to be performed in accordance with the terms and conditions of the Hurd Agreement.�” (Compl. ¶ 65)

• Pursuant to the Court�’s holdings regarding any contractual duties or obligations arising from the Reaffirmation Provision of the Hurd Agreement, and the terms thereof, whether Oracle �“breached its commitments and obligations under the HurdAgreement by�…


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o �“ceasing and refusing to continue with the porting of its product suite to HP�’ s Itanium platform, telling customers that it will not offer new versions of its software products on the Itanium platform;

o refusing to fix critical defects, which is a fundamental aspect of supporting customers, in existing versions of its software products designed for use with HP�’s Itanium servers; and

o changing its longstanding software license pricing formula to specifically disadvantage Itanium platforms.�” (Compl. ¶ 67)

• Was HP cognizably harmed by any Oracle breach of the Hurd Agreement?

• Whether the Court may and should grant the equitable remedy of specific performance of any of the above claimed obligations under the Hurd Agreement, including whether the contractual obligations are definite enough as a matter of law to allow for the specific performance requested by HP.

• If HP was cognizably harmed, what is the dollar amount that will reasonably compensate HP for the harm caused by Oracle�’s breach of the Hurd Agreement?

• Is HP precluded from seeking consequential damages, including alleged lost profits, allegedly resulting from Oracle�’s claimed breach of the Hurd Agreement?

HP�’s �“Third Cause of Action: Breach of the Covenant of Good Faith and Fair Dealing�”

• Was Oracle�’s March 22, 2011 decision to stop offering new versions of the products in its software suite on HP�’s Itanium-based servers, including the manner in which that decision was implemented, a breach of the covenant of good faith and fair dealing?

• Can the �“manner in which�” Oracle�’s March 22, 2011 decision was implemented be a breach of the covenant of good faith and fair dealing when HP is not claiming that the actual contractual provision (the Reaffirmation Provision of the Hurd Agreement) regulated the �“manner in which�” Oracle made or communicated any decisions that potentially led to a breach of the Reaffirmation Provision?

• Was Oracle�’s December 1, 2010 decision to change the core factor used to determine the licensing fee charged by Oracle for software offered on certain of HP�’s Itanium-based servers a breach of the covenant of good faith and fair dealing?

• Was HP harmed by Oracle�’s breaches of the covenant of good faith and fair dealing? If HP was harmed, what is the dollar amount that will reasonably compensate HP for the harm caused by Oracle�’s breach of the covenant of good faith and fair dealing?

HP�’s �“Fourth Cause of Action: Breach of Implied Contract�”

• Did HP and Oracle have an implied contract whereby Oracle was obligated to (i) port all of its software products to HP�’s platforms on an ongoing basis and without compensation and (ii) price Oracle database software on such terms that did not �“disadvantage�” the use of Itanium microprocessors used by HP in its server offerings?


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• Would the porting obligations HP asserts as the implied porting contract conflict with the express contracts actually entered into between the parties for the porting of specific software products on detailed and limited terms?

• How, if at all, is the determination of the existence and scope of the parties�’ alleged implied contract affected by the Hurd Agreement?

• What specific contractual duties and obligations are imposed on the parties by virtue of the alleged implied contract, particularly as to

o the scope of the Oracle products and HP platforms covered; o the duration of any support or development obligations; o the payments involved with any support or development obligations; o HP�’s obligation to provide equipment to enable Oracle to carry out any development

obligations; o intellectual property rights in any resulting software; o Oracle�’s ability and discretion to set the license pricing for its software products in the

future; o termination or modification rights as to any support or development obligations; and o remedies that may be sought by the parties in the event of a breach?

• How many, and which of, the terms from the parties�’ express Porting Agreements should the Court use to �“fill in the gaps�” of the alleged implied contract?

• Was Oracle�’s March 22, 2011 decision to stop offering new versions of its software products on HP�’s Itanium-based servers a breach of an implied contract between Oracle and HP?

• Did HP perform its obligations under the implied contract between Oracle and HP?

• Was HP harmed by Oracle�’s breach of the implied contract between Oracle and HP?

• Whether the Court may and should grant the equitable remedy of specific performance of any of the above claimed obligations under the alleged implied contract, including whether the contractual obligations are definite enough as a matter of law to allow for the specific performance requested by HP.

• Whether the implied contractual obligations are definite enough to allow for the specific performance requested by HP.

• If HP was harmed, what is the dollar amount that will reasonably compensate HP for the harm caused by Oracle�’s breach of the implied contract between Oracle and HP?

• Is HP precluded from seeking consequential damages, including alleged lost profits, allegedly resulting from Oracle�’s claimed breach of an implied contract?

HP�’s �“Fifth Cause of Action: Promissory Estoppel�”

• Did Oracle make clear and unambiguous promises to HP to continue future software development for the Itanium platform?


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• Did HP reasonably and foreseeably rely to its detriment upon any such clear and unambiguous promises by Oracle to continue future software development for the Itanium platform?

• Was HP harmed by Oracle�’s alleged failure to honor any such clear and unambiguous promises to continue software development for the Itanium platform?

• If HP was harmed, what is the dollar amount that will reasonably compensate HP for its detrimental reliance on Oracle�’s clear and unambiguous promises to continue software development for the Itanium platform?

HP�’s �“Tenth Cause of Action: For Violation of Cal. Bus. & Prof. Code § 17200 et seq.�”

• Is HP�’s § 17200 claim cognizable under law given HP�’s abandonment of the predicate causes of action (defamation and intentional interference)?

• Did �“Oracle engage[] in fraudulent and deceptive business practices by, among other things, making false and deceptive statements to HP and its customers about its commitment to HP�’s Itanium servers, its intent to make new versions of Oracle software available to the Itanium platform, and its intent to continue to support existing versions of its Oracle software for the Itanium platform�”? (Compl. ¶114)

• Did Oracle also �“engage[] in fraudulent and deceptive practices by, among other things, disseminating false, deceptive, and defamatory statements to its customers and the marketplace regarding the alleged status and future viability of Itanium products and platforms, and HP�’s alleged lack of candor with its customers about the expected longevity of the Itanium architecture�”? (Compl. ¶ 114)

• Have Oracle�’s alleged statements deceived, or are they likely to deceive, customers and the public?

• Does Oracle�’s conduct constitute unfair competition, including any unlawful, unfair or fraudulent business act or practice, or unfair, deceptive, untrue or misleading advertising?


Oracle�’s �“First Cause of Action: Violation of the Lanham Act, 15 U.S.C. § 1501 et seq.�” and �“Second Cause of Action: Violation of Cal. Bus. & Prof. Code § 17500 et seq.�”

• Did HP make false or misleading statements regarding Itanium, HP�’s Itanium-based servers or Intel?

• Were such statements literally or explicitly false, or have a tendency to mislead customers?

• Was Oracle injured as a result of HP�’s alleged deceptive conduct?

• What amount of monetary damages, if any, is Oracle entitled to recover?

• Should HP be enjoined from engaging in the alleged deceptive conduct?

Oracle�’s �“Third Cause of Action: Violation of Cal. Bus. & Prof. Code § 17200 et seq.�”

• Did HP make false or misleading statements regarding Itanium, HP�’s Itanium-based servers or Intel?


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• Did HP make false or misleading statements as to Oracle, including regarding Oracle�’s announcements about Itanium and Oracle causing harm to customers?

• Have HP�’s alleged statements deceived, or are they likely to deceive, customers and the public?

• Does HP�’s conduct constitute unfair competition, including any unlawful, unfair or fraudulent business act or practice, or unfair, deceptive, untrue or misleading advertising?


III. Witnesses To Be Called

The parties agree that it is premature to assign time estimates for each witness at this time

because the Court has not yet decided the trial structure and schedule. Once the Court resolves those

issues and sets a total length for the trial, the parties will set forth time estimates for the witnesses.

The parties have exchanged preliminary witness lists, and have agreed that their respective

lists are subject to change until required to be finalized and submitted to the Court on May 25, 2012.

The witnesses who currently appear on both parties�’ lists, along with a general description of the

subjects matters about which they are expected to testify, are as follows:

Witness HP�’s Description of Subjects Oracle�’s Description of Subjects

Timothy Aylott

Mr. Aylott will testify on topics relating to the relationship and course of dealing between the parties, and the parties�’ performance under the contract at issue.

Oracle/HP relationship prior and subsequent to Hurd Agreement; competition and customers in server markets Itanium and x86; HP server strategy and plans; HP public statements and customer outreach; HP server-related financial information

Keith Block

Mr. Block will testify on topics relating to Oracle�’s conduct prior to and after Oracle�’s Itanium announcement, and the UNIX server market generally.

Oracle/HP relationship prior and subsequent to Hurd Agreement; competition and customers regarding server sales; Oracle damages

Safra Catz Ms. Catz will testify on topics relating to the negotiation of the contract at issue, the relationship and course of dealing between the parties, Oracle�’s Itanium announcement, and Oracle�’s conduct prior to and after Oracle�’s Itanium announcement.

Oracle/HP relationship prior and subsequent to Hurd Agreement; competition and customers regarding server sales; Hurd Agreement; Oracle software development and licensing; Oracle damages

David Donatelli

Mr. Donatelli will testify on topics relating to the contract at issue HP�’s Itanium-based server business, including the relationship between the parties, HP�’s relationship with Intel, the Itanium roadmap, and the impact of Oracle�’s Itanium announcement, and the UNIX server market generally.

Oracle/HP relationship prior and subsequent to Hurd Agreement; competition and customers in server markets; Intel/HP relationship; Itanium and x86; HP server strategy and plans; HP public statements and customer outreach; HP server-related financial information; HP damages


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Martin Fink Mr. Fink will testify on topics relating to HP�’s Itanium-based server business, including the relationship between the parties, HP�’s relationship with Intel, the Itanium roadmap, and the impact of Oracle�’s Itanium announcement, and the UNIX server market generally.


John Fowler

Mr. Fowler will testify on topics relating to Oracle�’s hardware business, and the UNIX server market generally.

Oracle/HP relationship prior and subsequent to Hurd Agreement; competition and customers in server markets Itanium and x86; HP public statements and customer outreach; Oracle damages

David Hicks

Mr. Hicks will testify on topics relating to the relationship and course of dealing between the parties and Oracle�’s conduct prior to and after the Itanium announcement.

Oracle/HP relationship prior and subsequent to Hurd Agreement; competition and customers in server markets Itanium and x86; HP public statements and customer outreach; Oracle damages

Mark Hurd Mr. Hurd will testify on topics relating to the relationship between the parties, the contract at issue, the Itanium roadmap, Oracle�’s hardware business, and Oracle�’s conduct prior to and after its Itanium announcement.


Cathie Lesjak

Ms. Lesjak will testify on topics relating to HP�’s business, including the relationship between the parties and the contract at issue.

Oracle/HP relationship prior and subsequent to Hurd Agreement; Hurd Agreement; competition and customers in server markets; Intel/HP relationship; Itanium and x86; HP server strategy and plans; HP public statements and customer outreach; HP server-related financial information; HP damages

Paul Otellini

Mr. Otellini will testify on topics relating to Intel�’s business, including Intel�’s relationship with the parties, the Itanium roadmap and Oracle�’s Itanium announcement.

Intel/HP relationship; Intel microprocessor strategy and plans; competition and customers in server markets; HP server strategy and plans; public statements and customer outreach regarding Itanium and x86

A. HP�’s Additional Witnesses

The additional individuals currently identified on HP�’s preliminary witness list are:

Witness Subjects/TopicsJudson Althoff Mr. Althoff will testify on topics relating to the course of dealing between the parties,

and the parties�’ performance under the contract at issue. Kirk Bresniker Mr. Bresniker will testify on topics relating to HP�’s Itanium servers, including the

Itanium roadmap, HP�’s relationship with Intel, and Oracle�’s Itanium announcement, and the UNIX server market generally.

Andrew Canham Mr. Canham will testify on topics relating to Oracle�’s conduct prior to and after Oracle�’s Itanium announcement, and the UNIX server market generally.

Sumanta Chatterjee Mr. Chatterjee will testify on topics relating to the relationship and course of dealing between the parties.

Bert Collins Mr. Collins will testify regarding the impact on customers of Oracle�’s decision to stop software development on Itanium-based servers.

Steve Connor Mr. Connor will testify on topics relating to the relationship and course of dealing between the parties, Oracle�’s Itanium announcement, and Oracle�’s conduct prior to and after the Itanium announcement.


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Jeb Dasteel Mr. Dasteel will testify on topics relating to the course of dealing between the parties, Oracle�’s conduct prior to and after the Itanium announcement, and customer reactions to Oracle�’s Itanium announcement.

Juan Garcia-Rovetta Mr. Garcia-Rovetta will testify on topics relating to the relationship and course of dealing between the parties.

Michael Holston Mr. Holston will testify on topics relating to the Mark Hurd lawsuit, the negotiation of the contract at issue, and related matters.

Renee James Ms. James will testify on topics relating to Intel�’s relationship with the parties, and Oracle�’s Itanium announcement.

Timothy Kelly Mr. Kelly will testify on topics relating to Oracle�’s conduct prior to and after Oracle�’s Itanium announcement, and the UNIX server market generally.

Ann Livermore Ms. Livermore will testify on topics relating to HP�’s business, including the relationship and course of dealing between the parties, the negotiation of the contract at issue, and Oracle�’s Itanium announcement, and the UNIX server market generally.

Kathryn McQueen Ms. McQueen will testify on topics relating to HP�’s financial performance relating to Itanium-based servers.

Andrew Mendelsohn

Mr. Mendelsohn will testify on topics relating to the relationship and course of dealing between the parties Oracle�’s Itanium announcement, and Oracle�’s conduct prior to and after Oracle�’s Itanium announcement.

Jonathan Orszag Mr. Orszag will testify regarding HP�’s damages.Ed Screven Mr. Screven will testify on topics relating to Oracle�’s business, including Oracle�’s

hardware business and the parties�’ performance under the contract at issue, and the UNIX server market generally.

Kirk Skaugen Mr. Skaugen will testify on topics relating to Itanium including the Itanium roadmap, the relationship between HP and Intel, Oracle�’s announcement regarding Itanium, and the UNIX server market generally.

Joel Steckel Dr. Steckel will testify as a rebuttal witness to Kent Van Liere. Binoy Sukumaran Mr. Sukumaran will testify on topics relating to the relationship and course of dealing

between the parties.David Tucker Mr. Tucker will testify on topics relating to the relationship and course of dealing

between the parties.Sandy Vella Ms. Vella will testify on topics relating to the relationship and course of dealing

between the parties, and Oracle�’s conduct prior to and after Oracle�’s Itanium announcement.

B. Oracle�’s Additional Witnesses

The additional individuals currently identified on Oracle�’s preliminary witness list are:

Witness Subjects/TopicsBartlett, Lorraine Oracle/HP relationship prior and subsequent to Hurd Agreement; competition and

customers in server markets; Intel/HP relationship; Itanium and x86; HP server strategy and plans; HP public statements and customer outreach; HP server-related financial information; HP damages

Cooper, Robert Hurd AgreementCrowsen, Michael Oracle/HP relationship prior and subsequent to Hurd Agreement; competition and

customers in server markets Itanium and x86; HP server strategy and plans; HP public statements and customer outreach; HP server-related financial information

Daley, Dorian Oracle/HP relationship prior and subsequent to Hurd Agreement; Hurd AgreementEllison, Lawrence Oracle/HP relationship prior and subsequent to Hurd Agreement; Hurd Agreement;

competition and customers in server markets; Itanium and x86; HP public statements and customer outreach; Oracle software development and licensing; Oracle damages

Kurian, Thomas Oracle/HP relationship prior and subsequent to Hurd Agreement; competition and customers in server markets; Itanium and x86; HP public statements and customer outreach; Oracle software development and licensing; Oracle damages


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Liversidge, Samuel Hurd AgreementLee, Joseph Competition and customers in server markets; Intel/HP relationship; Itanium and x86;

HP server strategy and plans; HP public statements and customer outreach; HP server-related financial information

Mayer, Bethany Oracle/HP relationship prior and subsequent to Hurd Agreement; competition and customers in server markets; Intel/HP relationship; Itanium and x86; HP server strategy and plans; HP public statements and customer outreach

Palk, David Oracle/HP relationship prior and subsequent to Hurd Agreement; competition and customers in server markets; Intel/HP relationship; Itanium and x86; HP server strategy and plans; HP public statements and customer outreach; HP server-related financial information; HP damages

Shehadeh, Ramsey HP and Oracle damages and underlying/related data and issues Tredennick, Nick Competition and customers in server markets; Intel/HP relationship; Itanium and x86;

HP server strategy and plans; HP server-related financial information; HP damagesVan Liere, Kent Competition and customers in server markets Itanium and x86; HP server strategy and

plans; HP damagesWohl, Bill Oracle/HP relationship subsequent to the Hurd Agreement; Intel/HP relationship; HP

public statements and customer outreach

IV. Exhibit Lists

The parties have exchanged preliminary exhibit lists, which are Attached as Exhibit A (HP)

and Exhibit B (Oracle). Both parties continue to work on finalizing their respective lists.

V. Procedures For The Presentation Of Testimony And Exhibits

The parties intend to follow the standard procedures set forth by the Court regarding the

presentation of testimony and exhibits. The parties will be prepared to discuss at the Joint Pre-Trial

Conference a protocol for deposition designations, including the resolution of objections.

VI. Other Matters To Expedite Trial

The parties continue to work together to reach agreement on logistical and substantive aspects

of the trial. Other than the issues contemplated in the Court�’s Pre-Trial Conference Order, and

certain limited remaining discovery disputes that the parties are endeavoring to resolve without Court

intervention, no significant issues requiring the Court�’s attention currently have been identified.

DATED: MAY 14, 2012 GIBSON, DUNN & CRUTCHER LLP BARTLIT BECK HERMAN PALENCHAR & SCOTT LLP

By: /s/ Robert E. Cooper Robert E. Cooper

Attorneys for Plaintiff HEWLETT-PACKARD COMPANY


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DATED: MAY 14, 2012 LATHAM & WATKINS LLP

By: /s/ Daniel M. Wall Daniel M. Wall

Attorneys for Defendant ORACLE CORPORATION


Documents

Joint Final Pre-trial Conference Statement