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Did new HP CEO Léo Apotheker mastermind the theft of intellectual property from Oracle, America's third largest company?  (Source: Bloomberg)

SAP AG, Mr. Apotheker's former employer has already admitted to the theft. And Oracle Corp. CEO Larry Ellison claims he has proof that HP's new CEO was involved.  (Source: Sharp/AP)
Court documents lend credence to Oracle's claims

Hewlett-Packard Co. has plenty to worry about these days.  Not only did it lose the CEO who masterminded its ascent to the world's top computer-maker spot to a sexual harassment scandal, but it also now faces a growing rift with Mark Hurd's new employer, Oracle Corp.

On Wednesday, Oracle CEO Larry Ellison blasted Léo Apotheker, HP's incoming CEO, accusing him of masterminding a scheme while CEO of German enterprise software vendor SAP AG to steal Oracle's technology.

Mr. Ellison remarked, "A few weeks ago I accused HP's new CEO, Léo Apotheker, of overseeing an industrial espionage scheme centering on the repeated theft of massive amounts of Oracle's software. A major portion of this theft occurred while Mr. Apotheker was CEO of SAP."

Indeed court documents seem to back Mr. Ellison's claims that under Mr. Apotheker's leadership SAP AG committed intellectual property theft.  In a case currently ongoing in San Francisco court, SAP admitted that it stole Oracle's property.  

The case now goes to a trial by jury to determine damages, starting next Monday.  Oracle says that SAP should pay it around $2B USD, but SAP contends it should only have to pay tens of millions of dollars for the damage its dirty tactics caused.

Oracle wants to subpoena Mr. Apotheker to testify, but is having difficulty in doing so because he resides outside the country.  However, the executive is set to make the move to HP's headquarters in Silicon Valley on Monday, which allow him to be forced to testify after all.

Mr. Ellison states, "HP's Chairman, Ray Lane, immediately came to Mr. Apotheker's defense by writing a letter stating, 'Oracle has been litigating this case for years and has never offered any evidence that Mr. Apotheker was involved.' Well, that's what we are planning to do during the trial that starts next Monday."

HP spokeswoman Mylene Mangalindan in a statement to 
Reuters refused to comment on the possible subpoena.  She accuses Oracle of being the one committing dirty tactics, despite the fact that her company's new CEO's former company admitted to wrong-doing.  She states, "Given Leo's limited knowledge of and role in the matter, Oracle's last-minute effort to require him to appear live at trial is no more than an effort to harass him and interfere with his duties and responsibilities as HP's CEO."

For Oracle, the loss of HP, who long sold bundled hardware with Oracle software to the corporate world, is of little consequence.  The company is increasingly relying on recent acquisition Sun Microsystems for its hardware needs.  The company could also easily broker increased deals with Dell or Taiwanese manufacturers, should it need to increase its bundle options.

For HP, though, the loss  -- and the scandal surrounding its latest CEO -- is more troubling.  There are few enterprise software makers as powerful or with as much name recognition as Oracle, and those there are oft have dedicated hardware units already (e.g. IBM).  Oracle is the world's third largest software company behind Microsoft and IBM.

Probably HP's greatest hope is that its latest CEO scandal just quietly go away.  That must strike former scorned former CEO Mark Hurd, now a co-President at Oracle, as awfully ironic.

Aside from the scandal, though, HP has plenty of concerns looking ahead to Mr. Apotheker's campaign.  Mr. Apotheker has little experience in the consumer sector and faces a serious culture clash in jumping from one of Germany's software giants to one of America's hardware giants.  And aside from the Oracle conflict, SAP AG suffered during his time as CEO, leading many to wonder if he was a good choice for HP.  His appointment has been criticized and questioned by many analysts.



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RE: Accusations...
By drycrust3 on 10/27/2010 5:09:05 PM , Rating: 2
quote:
If you read the article, SAG is stating that it did indeed engage in theft of IP


I'm from New Zealand and, ok, it is a completely different country with different laws, but we had a case where a guy left a company and started his own using information from the first company. The first company took the guy to court for theft. The guy won his case because he said he had remembered lots of details, not because he had taken anything physical from the first company.
The difficulty here is Oracle employed this guy because of what he knew (learnt from school + industrial knowledge + how to use it), and they continued to employ him for a while because he was able to learn new stuff and learnt how to use that information reasonably effectively, and so when he left ... he has what he knew before + the new information + how to use it in his head. The exact reason they employed him in the first place is the exact reason they are now going to court.
Mozart heard of a concert where the producers refused to release the music, so Mozart went to the concert, listened to it just once, and then wrote it out note for note without a mistake. Sure, copyright didn't exist then, but the point is when you give someone knowledge you can't erase it legally, all you can do is make sure they don't know the whole picture (e.g. as in KFC's "secret recipe", where nobody in the company is allowed to know the whole formula) or that the knowledge becomes useless fairly quickly after they leave.
Unless Oracle can prove they guy walked out with a stash of DVD-ROMs under his arm I don't think they have much of a case.


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