Oracle 2009 Annual Report Download - page 218

LEGAL PROCEEDINGS
LEGAL PROCEEDINGS
(USD $)
12 Months Ended
05/31/2010
LEGAL PROCEEDINGS 18.LEGAL PROCEEDINGS
Securities Class Action
Stockholder class actions were filed in the United States District Court for the Northern District of California against us and our
Chief Executive Officer on and after March 9, 2001. Between March 2002 and March 2003, the court dismissed plaintiffs'
consolidated complaint, first amended complaint and a revised second amended complaint. The last dismissal was with prejudice.
On September 1, 2004, the United States Court of Appeals for the Ninth Circuit reversed the dismissal order and remanded the case
for further proceedings. The revised second amended complaint named our Chief Executive Officer, our then Chief Financial Officer
(who currently is Chairman of our Board of Directors) and a former Executive Vice President as defendants. This complaint was
brought on behalf of purchasers of our stock during the period from December 14, 2000 through March 1, 2001. Plaintiffs alleged
that the defendants made false and misleading statements about our actual and expected financial performance and the performance
of certain of our applications products, while certain individual defendants were selling Oracle stock in violation of federal securities
laws. Plaintiffs further alleged that certain individual defendants sold Oracle stock while in possession of material non-public
information. Plaintiffs also allege that the defendants engaged in accounting violations. On July 26, 2007, defendants filed a motion
for summary judgment, and plaintiffs filed a motion for partial summary judgment against all defendants and a motion for summary
judgment against our Chief Executive Officer. On August 7, 2007, plaintiffs filed amended versions of these motions. On October 5,
2007, plaintiffs filed a motion seeking a default judgment against defendants or various other sanctions because of defendants'
alleged destruction of evidence. A hearing on all these motions was held on December 20, 2007. On April 7, 2008, the case was
reassigned to a new judge. On June 27, 2008, the court ordered supplemental briefing on plaintiffs' sanctions motion. On September
2, 2008, the court issued an order denying plaintiffs' motion for partial summary judgment against all defendants. The order also
denied in part and granted in part plaintiffs' motion for sanctions. The court denied plaintiffs' request that judgment be entered in
plaintiffs' favor due to the alleged destruction of evidence, and the court found that no sanctions were appropriate for several
categories of evidence. The court found that sanctions in the form of adverse inferences were appropriate for two categories of
evidence: e-mails from our Chief Executive Officer's account, and materials that had been created in connection with a book
regarding our Chief Executive Officer. The court then denied defendants' motion for summary judgment and plaintiffs' motion for
summary judgment against our Chief Executive Officer and directed the parties to revise and re-file these motions to clearly specify
the precise contours of the adverse inferences that should be drawn, and to take these inferences into account with regard to the
propriety of summary judgment. The court also directed the parties to address certain legal issues in the briefing.
On October 13, 2008, the parties participated in a court-ordered mediation, which did not result in a settlement. On October 20,
2008, defendants filed a motion for summary judgment, and plaintiffs filed a motion for summary judgment against our Chief
Executive Officer. The parties also filed several motions challenging the admissibility of the testimony of various expert witnesses.
Opposition briefs were filed on November 17, 2008, and reply briefs were filed on December 12, 2008. A hearing on all these
motions was held on February 13, 2009.
On June 16, 2009, the court issued an order granting defendants' motion for summary judgment and denying plaintiffs' motion for
summary judgment against our Chief Executive Officer, and it entered a judgment dismissing the entire case with prejudice. On July
14, 2009, plaintiffs filed a notice of appeal. Plaintiffs filed their opening appellate brief on November 30, 2009. Defendants filed
their opposition brief on February 4, 2010, and plaintiffs filed their reply on March 15, 2010. The court has scheduled oral argument
on this appeal for July 13, 2010. Plaintiffs seek unspecified damages plus interest, attorneys' fees and costs, and equitable and
injunctive relief. We believe that we have meritorious defenses against this action, and we will continue to vigorously defend it.
EpicRealm/Parallel Networks Intellectual Property Litigation
On June 30, 2006, we filed a declaratory judgment action against EpicRealm Licensing, LP (“EpicRealm”) in the United States
District Court, District of Delaware, seeking a judicial declaration of noninfringement and invalidity of U.S. Patent Nos. 5,894,554
(the '554 Patent) and 6,415,335B1 (the '335 Patent). We filed the lawsuit following the resolution of an indemnification claim by one
of our customers related to EpicRealm's assertion of the '554 Patent and '335 Patent against the customer in a patent infringement
case in the United States District Court for the Eastern District of Texas.
On April 13, 2007, EpicRealm filed an Answer and Counterclaim in which it: (1) denies our noninfringement and invalidity
allegations; (2) alleges that we have willfully infringed, and are willfully infringing, the '554 Patent and '335 Patent; and (3) requests
a permanent injunction, an award of unspecified money damages, interest, attorneys' fees, and costs. On May 7, 2007, we filed an
Answer to EpicRealm's infringement counterclaim, denying EpicRealm's infringement allegations and asserting affirmative
defenses. In August 2007, the patents-in-suit were sold to Parallel Networks, LLC, which thereafter substituted in as the defendant in
place of EpicRealm.
The parties have completed discovery and filed briefing on claim construction and summary judgment motions. A Markman hearing
and oral argument on summary judgment motions were held October 3, 2008. A court-ordered mediation was held on October 8,
2008, which did not result in a settlement. On December 4, 2008, the court issued an order granting summary judgment that our Web
Cache, Internet Application Server, and RAC Database do not infringe the patents. The court also denied our motion for summary
judgment that the patents are invalid, and denied in part and granted in part Parallel Networks's motion for summary judgment that
certain prior art references do not invalidate the patents through anticipation. Trial was scheduled to begin on January 12, 2009, on
issues of invalidity and inequitable conduct. On December 23, 2008, the parties reached an agreement allowing Parallel Networks to
immediately appeal the court's summary judgment order and preserving Oracle's invalidity and inequitable conduct claims in the
event that the matter is remanded for trial at a later time. On January 23, 2009, Parallel Networks filed a notice of appeal. A
court-ordered mediation was held on June 1, 2009, which did not result in a settlement. The appellate court heard oral argument on
December 10, 2009 after full briefing. On April 28, 2010, the Federal Circuit issued a decision vacating the district court's grant of
summary judgment of noninfringement in Oracle's favor and remanding the case to the district court for further proceedings. On
May 28, 2010, Oracle filed a Petition for Rehearing with the Federal Circuit which was denied on June 11, 2010. We believe that we
have meritorious defenses against this action, and we will continue to vigorously defend it.
SAP Intellectual Property Litigation
On March 22, 2007, Oracle Corporation, Oracle USA, Inc. and Oracle International Corporation (collectively, Oracle) filed a
complaint in the United States District Court for the Northern District of California against SAP AG, its wholly owned subsidiary,
SAP America, Inc., and its wholly owned subsidiary, TomorrowNow, Inc., (collectively, the SAP Defendants) alleging violations of
the Federal Computer Fraud and Abuse Act and the California Computer Data Access and Fraud Act, civil conspiracy, trespass,
conversion, violation of the California Unfair Business Practices Act, and intentional and negligent interference with prospective
economic advantage. Oracle alleged that SAP unlawfully accessed Oracle's Customer Connection support website and improperly
took and used Oracle's intellectual property, including software code and knowledge management solutions. The complaint seeks
unspecified damages and preliminary and permanent injunctive relief. On June 1, 2007, Oracle filed its First Amended Complaint,
Source: ORACLE CORP, 10-K, July 01, 2010 Powered by Morningstar® Document Research℠