Ellison: Oracle has $4 Billion Case against SAP

Associated Press

Oracle Corp. CEO Larry Ellison turned up the pressure in an industrial espionage trial Monday by testifying that archenemy SAP AG should have paid $4 billion for licenses to Oracle software.

SAP and Oracle, two of the world's biggest business-software makers, are fighting over how much SAP should pay to atone for the shady tactics of a now-shuttered software support subsidiary called TomorrowNow.

SAP has already admitted to bad behavior. It acknowledged that TomorrowNow stole customer support documents from Oracle password-protected websites and used them to steal business from Oracle by offering similar services at a cheaper price.

Oracle has said that it is owed billions for the value of the intellectual property that was taken from it. Ellison's $4 billion estimate concerned the amount of money SAP would have paid for the appropriate licenses to Oracle's software, under certain conditions.

SAP claims TomorrowNow wasn't that effective at stealing customers, and it should only have to pay $40 million for Oracle accounts it did manage to lure away.

The trial, in its second week in federal court, offers a rare look at the corners big companies might be tempted to cut in the battle for new business.

It is also as much a public relations bonanza for Oracle as it is an attempt to recover damages, since Oracle gets to pillory two rivals at once: SAP and Hewlett-Packard Co.

The conflict with SAP has grown as Oracle has moved beyond its core business of selling database software and into SAP's stronghold of applications that help companies manage payroll, human resources and other tasks.

The beef with HP stems from Oracle's decision to start selling computer servers, an HP mainstay. Also, Ellison has taken HP to task for hiring Leo Apotheker, SAP's former CEO, as HP's new CEO. Apotheker is replacing Ellison's friend and tennis buddy Mark Hurd, who was ousted as HP's CEO over expense-report lapses. Ellison has since hired Hurd to serve as an Oracle co-president.

Apotheker may not wind up testifying live about his role in the TomorrowNow espionage.

Oracle has tried to force him to appear in court but says HP has refused the subpoena. Apotheker has proven so elusive that Oracle has hired investigators to try and track him down and serve him with the subpoena if he appears within 100 miles of the federal courthouse in Oakland, which includes HP's headquarters in Palo Alto.

If Apotheker stays out of range, Oracle can't force him to testify.

HP accuses Oracle of harassing its new executive and says Oracle had ample time to question Apotheker during an earlier sworn deposition. If Apotheker doesn't appear, Oracle could play the videotaped testimony.

Ellison's testimony injected some celebrity drama into the trial. Although he is known for trash-talking against rivals, his courtroom appearance was devoid of theatrics, and he didn't give any public comments afterward.

Ellison testified that he was deeply worried that his company would bleed customers because of what seemed like SAP's masterstroke of an acquisition of TomorrowNow in 2005. Ellison called the TomorrowNow deal a "brilliant idea" that posed a "grave risk" to Oracle because of its ability to let SAP steal business, even without the theft of Oracle's documents.

The extent of those fears, and how they squared with the amount of business SAP actually poached, consumed most of his hourlong testimony.

Lawyers from Oracle and SAP questioned Ellison on his initial fears that Oracle could lose as much as 30 percent of the customer contracts it got as part of its $10.3 billion acquisition of PeopleSoft in 2005.

That deal sparked SAP's interest in TomorrowNow, since TomorrowNow supported PeopleSoft software.

SAP insists that it owes far less than Oracle is demanding because TomorrowNow stole far fewer customers than Oracle thought it would. SAP's lawyers have repeatedly cited SAP's claim that TomorrowNow stole only 358 Oracle customers, out of the thousands that came to Oracle through the acquisition.

HP Sued by Shareholders Over Kickback, Foreign Bribery Claims

Bloomberg

Directors at Hewlett-Packard Co., the world’s largest computer maker, were sued by shareholders over claims they permitted or encouraged violations of federal kickback and foreign bribery laws.

From 2007 to 2009, HP violated the federal anti-kickback law by paying government vendors “influencer fees” to win contracts to design information technology systems, according to the complaint filed in federal court in San Jose, California. The company is also under investigation for possible violations of the U.S. Foreign Corrupt Practices Act.

Current and former directors at HP “consciously condoned HP’s illegal and unethical marketing practices,” according to the Oct. 19 complaint. The misconduct has “put the company at risk of having its U.S. government contracts rescinded,” the shareholders claim, adding that HP sales to U.S. agencies from 2007 to 2009 totaled more than $880 million.

The case relies in part on HP’s announcement in August that it agreed to pay $55 million to settle a Justice Department probe of whether the company overcharged taxpayers through a General Services Administration contract. That settlement also resolved a False Claims Act lawsuit, first filed by a whistleblower and joined by the government, alleging that the company paid kickbacks.

While the U.S. made HP aware of its illegal marketing practices in “late 2006/early 2007,” the directors allowed the unlawful conduct to continue until Dec. 31, 2009, according to the shareholder complaint.

The complaint also cites HP’s disclosure last month that the Justice Department and U.S. Securities Exchange Commission joined a probe by the German Public Prosecutor’s Office examining whether the Palo Alto, California-based company engaged in bribery overseas.

“It is painfully obvious that HP’s board has not and will not act as a disinterested and independent check on illegal corporate action, and that to remedy this misconduct, HP’s shareholders need to bring suit,” according to the complaint.

The case seeks to recover the False Claims Act fines and repayment of the salaries paid to the directors serving from 2007 to 2009.

HP spokeswoman Mylene Mangalindan didn’t immediately return a call seeking comment. John McCool, an outside spokesman for the company, said HP is reviewing the complaint.

US Suing Oracle Alleging Software Contracts Fraud

Associated Press

 

The U.S. Justice Department said Thursday it is joining a fraud lawsuit against Oracle Corp. related to software contracts worth hundreds of millions of dollars.

The agency said Oracle failed to offer government customers the same discounts on its software that it offered commercial customers, as it was required to do. As a result, the lawsuit alleges, Oracle overcharged the government on a contract that ran from 1998 to 2006.

Paul Frascella, Oracle's senior director of contract services, filed the original lawsuit in May 2007 under the False Claims Act, which allows whistleblowers to sue on the government's behalf and share in any damages recovered.

Oracle did not immediately return messages for comment.

"We take seriously allegations that a government contractor has dealt dishonestly with the United States," Assistant Attorney General Tony West said in a statement. "When contractors misrepresent their business practices to the government, taxpayers suffer."

Possible Lawsuit over iPhone Problems

Examiner

Northern California law firm calls for customers in class action lawsuit

The Northern California based law firm of Kershaw, Cutter and Ratinoff call for customers to contact them for a class action law suit in response to the continuing problems of Apple’s iPhone 4.

Seeking a suit against Apple, Inc. and AT&T the law firm is looking for consumers experiencing dropped calls, bad reception and weak signals.

Unhappy with Apple’s ridiculous response and placing blame on user error for inaccurate holding of the iPhone, purchasers are replying in record numbers to the proposal of a legal remedy.

For iPhone users that want to pursue information on legal recourse read the statement on the investigation by Kershaw, Cutter & Ratinoff.

Consumers Sue Apple, AT&T over iPhone Antenna Problems

Reuters

"Avoid holding it in that way."

Apple Inc has been sued by iPhone customers in at least three complaints related to antenna problems on its newest model.

Apple launched the iPhone 4 last week to a huge groundswell of demand. But the launch was also plagued by complaints from some customers about poor call reception on the device when they held it in a certain way.

The problems have been a hot topic on the Internet, but it is unclear how many people have been affected. The issue does not seem to have hurt iPhone sales so far. Apple sold 1.7 million new iPhones in the first three days.

A putative class action filed Tuesday in the U.S. District court for the Northern District of California against Apple and AT&T Inc (T.N) -- the iPhone's exclusive wireless carrier in the United States -- includes allegations of fraud by concealment, negligence, intentional misrepresentation and defective design.

"The iPhone 4 manifests design and manufacturing defects that were known to defendants before it was released which were not disclosed to consumers, namely, a connection problem caused by the iPhone 4's antenna configuration that makes it difficult or impossible to maintain a connection to AT&T's network," the lawsuit said.

It said Apple and AT&T have failed to provide customer support and customers have been left with only thee remedies: "hold their phones in an awkward and unnatural manner," pay a 10 percent restocking fee and return their phones, or pay $29.95 to buy one of Apple's cases that are said to fix the reception problem.

The iPhone 4 represents a complete redesign over the previous model. A band around the rim of the smartphone acts as its antenna.

The company responded to user complaints last week by saying the antenna performance of every wireless phone is impacted in some way by the how it is held, depending on where the antenna is located.

Apple and AT&T both decline to comment on Thursday.

In another purported class action complaint filed on Wednesday against Apple and AT&T, in the U.S. District Court for the District of Maryland, Kevin McCaffrey and Linda Wrinn said they were sold "defective" iPhone 4 units, which drop calls and data service, "when held in a manner consistent with normal wireless phone use."

Both suits cite emails reportedly sent from Apple Chief executive Steve Jobs, responding to iPhone customers complaints' about reception. Those responses were widely circulated on the Internet.

In one response, Jobs said: "Just avoid holding it (the iPhone) in that way."

The cases are 10-02862 Goodglick v. Apple Inc, and 10-01776 McCaffrey et al v. Apple Inc. et al.

VirnetX Files Second Lawsuit Against Microsoft

cNet News

After scoring big in one court case against Microsoft this week, VirnetX is hoping for seconds.

VirnetX announced on Thursday that it has launched another lawsuit against Microsoft, this time claiming that the same patent violations found in Windows XP and Vista from the first suit also exist in Windows 7 and Windows Server 2008 R2.

On Tuesday, a Texas jury ruled against Microsoft attorneys in a patent infringement case initiated by VirnetX in 2007. VirnetX, which develops software to secure instant messaging and VoIP (voice over Internet Protocol) communications, alleged that Microsoft had violated two of its patents concerning virtual private network (VPN) technology.

After finding that Microsoft willfully violated the patents in question, the jury awarded VirnetX damages of $105.75 million.

In addition to charging Microsoft with patent violations in XP and Vista, the first suit also targeted Microsoft Live Communications Server and Office Communications Server. The initial suit did not cover Windows 7 or Windows Server 2008 R2 because it was launched before those two products hit the marketplace.

Initiating a new lawsuit so quickly after winning the first one is part of VirnetX's strategy.

"This is a tactical and procedural post-trial action to ensure and protect our property rights, as we proceed to final resolution with Microsoft," VirnetX President and CEO Kendall Larsen said in a statement.

In response to the new lawsuit, Kevin Kutz, Microsoft's director of public affairs, issued the following statement: "While we can't comment specifically about the new complaint because we have not been served, Microsoft respects intellectual property, and we believe our products do not infringe the patents involved. Moreover, we believe those patents are invalid. We will challenge VirnetX's claims."

VirnetX's lawsuit claims that Microsoft violated its U.S. patents 6,502,135 and 7,188,180. Both patents cover specific ways of better securing IP-based communications through VPNs and other technologies.

Intel Sued For Muscling Out Rivals

BBC News

Intel, the world's biggest maker of computer chips, is being sued by a US competition authority.

The Federal Trade Commission (FTC) has accused the company of using its market dominance to squash competitors and prevent innovation.

It said Intel had deliberately tried to "hamstring" its smaller competitors.

Intel said the FTC's case was "misguided". The FTC's move comes a month after the New York attorney general launched a similar lawsuit.

In that case, New York attorney general Andrew Cuomo accuses Intel of using "illegal threats" to dominate microchip sales.

Last month Intel also reached a $1.25bn (£770m) settlement with rival Advanced Micro Devices to end an anti-competition legal dispute between the two firms.

'Hamper competition'

Shares in AMD rose 5.2% on news of this latest action, while Intel dropped 0.7%.

"This is clearly a good day for Advanced Micro Devices, there's no question about it," said analyst Peter Kenny of Knight Equity Markets.

Intel is also appealing against a record $1.45bn anti-competition fine from European regulators.

The FTC said it is asking for an order that would bar Intel from using "threats, bundled prices, or other offers to encourage exclusive deals, hamper competition, or unfairly manipulate the prices of its" chips.

It accuses Intel of using both threats and rewards to keep some of the biggest computer makers from buying other companies' chips or marketing computers that carried them.

The complaint names Dell, Hewlett-Packard and IBM as Intel's targets.

Dell settles financing, rebate lawsuit with states

As posted by: The Associated Press

SEATTLE — Dell said today it has agreed to a legal settlement with states that claimed the computer company made misleading financing and service offers to PC buyers.

Dell said in a statement it will pay $3.85 million to at least 45 states participating in the settlement. A portion of the money will be used to reimburse states for legal costs.

Shares of Dell dropped 62 cents, or 5.6 percent, to $10.50 in afternoon trading.

Spokesman David Frink said Dell was contacted by the attorneys general from Connecticut and Washington, representing a larger group of states, last year.

"Consumers who sought and believed they received zero-percent financing were then ambushed by high interest rates and fees," said Connecticut Attorney General Richard Blumenthal in a statement. "Many consumers faced unacceptable obstacles obtaining warranty service on their Dell computers and others said they never received promised rebates."

Under the terms of the settlement, Dell agreed to give customers more information up front about what kind of financing they qualify for and allow them to cancel orders once they review final credit terms.

Dell also agreed to mail rebate payments and fulfill warranty obligations within a reasonable amount of time.

The settlement requires Dell to tell customers whether they must troubleshoot problems by phone before qualifying for in-person technical support at home. Dell must also justify claims about its customer service. For example, if it wants to use the term "award-winning," it must have won a customer service award in the past 18 months.

In its statement, Dell said the states' issues "represented only a very small percentage of the tens of millions of Dell consumer transactions in the states."
Round Rock, Texas-based Dell also said it had addressed these problems with many customers directly.

People who bought a computer or service on or after April 1, 2005, and had a problem with a financing offer, rebate or service can file a claim within 90 days with their state attorney general.