Judge: Oracle Can See Competitors’ Info

SAN FRANCISCO — UPDATED: A federal judge today opened the door for Oracle’s
lawyers to view sensitive company information from
PeopleSoft and other third-party competitors such
as
Microsoft .

In a pre-trial hearing at the U.S. District Court here, Judge Vaughn
R.
Walker denied the U.S. Department of Justice’s request for a two-tiered
system for Oracle’s attorneys. The motion would have prevented Oracle’s
lawyers from seeing trade secrets the government has collected
as
part of its case to block Oracle’s controversial $9.4 billion
PeopleSoft
bid.

DoJ lead attorney Bruce McDonald said the system was needed to
protect
sensitive company information from Pleasanton, Calif.-based PeopleSoft,
as
well as some 33 other third-party partners and Oracle competitors as
part of
its case.

“Some are Oracle competitors, some are competitors in the
mid-market,
some are customers of and suppliers to Oracle,” McDonald said. “They
have
expressed concern that the information could be used in judicial
proceedings
and they want to make sure that the information does not go into
Oracle’s
inner council.”

Microsoft was not identified directly as one of the 33 companies
contacted by the Justice Department, but the Redmond, Wash.-based
software
giant has reportedly cooperated with the DoJ in support of its case. McDonald said the sensitive information could be available to Oracle lawyers as early as the end of the week.

Judge Walker set a trial date of June 7 and instructed both sides to
give
updates in a March 19 phone conference. Lawyers are expected to be back
in
the courtroom on April 16 to set additional pre-trial motion dates. The
trial date gives each side about 60 days for discovery and to compile a
witness list.

At trial, each side would have as much as eight days to present
evidence.
One issue still being hotly debated is Oracle’s “Discount Forms”, which
the
company uses in selling software and services. Judge Walker asked
Oracle to
supply all forms filed from Jan. 1, 2002 to the present.

McDonald argued that the “Discount Forms” would help establish a
pattern
of business practices with Oracle.

Oracle lead attorney Dan Wall complained that the DoJ has a
six-month
lead in gathering evidence. He said the DoJ’s case is ambiguous at best
and that it is time to “fish or cut bait,” before the trial, which is slated to start on June 7th.

“The scope of what they are asking will pick up thousands and
thousands
and thousands of these forms for what they call the mid-market
companies,
which is not relevant to the case,” Wall said.

Judge Walker, siding with the Justice Department, said he didn’t “know the volume of the forms or the logistical problems in getting them together, but they should produce admissible evidence.”

Oracle’s legal strategy is to prove that its hostile play for
PeopleSoft
is not anti-competitive, as the DoJ alleges. Central to its case is the
premise that the applications market for large businesses includes more
than
just the big three of German giant SAP , Oracle and
PeopleSoft.

Oracle prompted the litigation after the DoJ said it opposed Oracle’s latest offer for rival PeopleSoft. The DoJ filed suit to
block the deal February 27. Oracle has vowed
to challenge the DoJ’s suit at trial. Judge Walker said if there is an
appeal, it should be expedited directly to the Supreme Court given the nature
of the case.

Yankee Group senior analyst Mike Dominy who has been following
Oracle’s
bid to take over PeopleSoft since the acquisition was announced last
June
observed that the case may never even get to a full trial.

“What they will need to do is settle out of court if this trial
looks
like it will take a long time to resolve,” Dominy told
internetnews.com “I believe that Oracle has had multiple
contingency
plans well before the DoJ made its ruling. If Oracle stumbles at all
on their revenue, they will get pressure from shareholders. Given the
assets of
Oracle, they can keep this suit with the Justice Department going for a
while, but it is messy and it is a distraction.”

Oracle is expected to report its third-quarter financial statements
Thursday after the market closes. Analysts expect the company to report
earnings of 12-cents per share.