A federal judge Friday ruled that the U.S. Department of Defense and
several IT companies must let lawyers for Oracle view
their trade secrets, but only under certain conditions.
During a pretrial hearing at the U.S. District Court in San Francisco,
Judge Vaughn Walker said that Oracle’s two in-house lawyers should not be
“handicapped” in viewing the evidence presented by the Department of
Justice. The government and seven states are looking to block Oracle’s
unsolicited $9.4 billion bid for rival PeopleSoft .
Representatives with the Department of Defense and Fidelity Employer
Services
— both premier customers of Oracle’s — as well as rivals like Microsoft
, SAP
, Siebel Systems, Sungard Bi-Tech
and niche software vendors such as Lawson Software and
QAD have asked the court to block certain parts of their
business technology and best practices from being entered as evidence. The
documents could contain detailed data on customers, competitive bids on
contracts, pricing details, budgets and product information.
To prevent suspicion from Oracle’s rivals, Judge Walker ruled that the
documents would need to be stored on a non-Oracle server and remain on each
company’s individual servers. The Judge said Oracle’s lawyers would need to
be supplied with special, secure and restricted access to the filings.
SAP said it wants to hold back about 5 percent of the 81,000 documents it
has handed over to the DoJ. Earlier this week, Microsoft filed paperwork
requesting similar protections, saying about 1,000 of its files are too
sensitive for even Oracle’s lawyers to view.
Microsoft and the others are among 33 different entities working with
the Justice Department and supporting its case. The government’s argument
suggests that the number of firms offering a full array of enterprise
resource planning (ERP) tools (Human Resource Management or Financial
Management Services) is currently limited to three: German-owned SAP, Oracle and PeopleSoft; and that a merger between Oracle and
PeopleSoft would limit a customer’s choices. Oracle’s defense identifies the
Redwood Shores, Calif.-based software vendor as a competitor in the broader
software market, facing stiff competition in the mid-tier sector from
Microsoft, IBM and others.
Judge Walker gave the third parties until the end of business on Monday,
March 22 to deliver their evidence to the courts. A source close to the
proceedings said the third parties are expected to appeal.
The Judge also held back on an official ruling but opened the door for
the case filed by the seven states to be ruled separately from the one filed
by the DoJ. The court also turned down a request to bring in additional
technical advisors for the case, opting instead to hold a tutorial to define
Oracle’s place in the “product landscape.”
During a keynote speech in Germany Friday, PeopleSoft president and CEO
Craig Conway said it is difficult to fully assess the delayed sales and lost
revenue created by Oracle’s unsolicited tender offer.
“As I talk with customers, their concerns about Oracle’s unsolicited
offer appear to be lessening following recent actions by antitrust
regulators. However, it is too early to assess whether this will result in
any positive impact in the short term,” Conway said.
Its quest for PeopleSoft is taking its toll on Oracle, too. The company filed
papers with the SEC this week saying it has now spent more than $48.4
million in the last ten months pursuing the deal.
“Given the assets of Oracle, they can keep this trial going for awhile,
but it’s really up to Oracle investors to say. Trials are messy and a
distraction,” Yankee Group senior analyst Mike Dominy told
internetnews.com in a recent interview.
Dominy said recent SEC filings that show a nearly 20 percent slip in
PeopleSoft’s license revenue also aid Oracle’s pursuit.
The trial is scheduled to begin on June 7. Lawyers are expected to be
back in the courtroom April 16 to settle additional pre-trial motions.
