Oracle argues for dismissal of PeopleSoft suit

Lawyers for Oracle have tried to persuade a California judge to change his mind about rejecting Oracle's motion to dismiss a...

Lawyers for Oracle have tried to persuade a California judge to change his mind about rejecting Oracle's motion to dismiss a PeopleSoft lawsuit against it.

California superior court judge Ronald Sabraw ruled mostly against Oracle, clearing the way for the suit for libel and unfair competition to proceed.

Counsel for Oracle argued that PeopleSoft's suit has no legal ground because Oracle's comments about PeopleSoft and its products are simply competitive comments.

Furthermore, PeopleSoft has not proved the part of its suit which alleges that Oracle knowingly interfered with contracts between PeopleSoft and its customers, David Balabanian, counsel for Oracle told the judge.

PeopleSoft claimed one customer suspended its contract after Oracle launched its takeover offer for PeopleSoft, but PeopleSoft has not proven that Oracle knew about this contract, Balabanian said.

The judge asked whether Oracle's statements about PeopleSoft are actionable and noted that competition is tough in the enterprise software space.

Sabraw's tentative ruling rejected Oracle's argument that PeopleSoft had not alleged any actions by Oracle falling outside the bounds of accepted competitive practices.

He found that PeopleSoft's complaint offered sufficient allegations of false statements by Oracle, interference with PeopleSoft's existing customers, trade libel and deceptive advertising for the case to proceed.

PeopleSoft sued Oracle in June after the competitor made a hostile bid to acquire it.

PeopleSoft believed Oracle launched its offer only to undercut PeopleSoft's business by disparaging its products, services and potential customers and to undermine PeopleSoft's viability by creating fear, uncertainty and doubt around the company and its products, PeopleSoft's counsel said.

Oracle and its executives made false and misleading statements, said PeopleSoft. For example, the promise that a migration from PeopleSoft's software to Oracle's software would be "graceful" is misleading.

Balabanian continues to dismisses PeopleSoft's lawsuit as "distracting litigation".

Oracle's bid for PeopleSoft, valued at $7.3bn, has been extended several times and is now set to last until 31 December. Both companies are awaiting a decision from antitrust regulators on whether the proposed hostile takeover can proceed.

Joris Evers writes for IDG News Service


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