In Battle Against Fraud in Free Phone Service, the Poor Might Pay the Price

“If it weren’t for my free phone, there were a few times I wouldn’t have made it to the hospital,” said Ms. James, who is unemployed because of chronic health problems and has no other telephone or Internet connection in her home. She is among the 15.3 million people in the United States who receive the Lifeline telephone service because they meet income guidelines or are enrolled in programs like Medicaid or food stamps.

But the fundamental feature of the program on which Ms. James relies — 250 minutes of free wireless service a month — is at the center of a legal battle linked to a new tactic to reduce fraud in the program. The outcome could have far-reaching consequences for the telecommunications industry and for millions of impoverished Americans.

Alarmed by accounts of households that have more than one subsidized phone — a breach of federal guidelines — and other allegations of fraud, the Georgia Public Service Commission voted this year to make this state the first to require phone companies to collect a fee of at least $5 a month from Lifeline users.

As an alternative, in an effort to force the service providers to better police phone usage, the commission also said that the companies could, for the same compensation they already receive from the government, offer participants 500 minutes a month. But the companies denounced that option.

Georgia regulators made their move about three years after the Government Accountability Office reported that officials from 21 states “indicated that they were somewhat or very concerned about consumer fraud in the Lifeline program.”

Georgia’s mandate, which had been scheduled to take effect in January before a judge in Atlanta granted an injunction last week, prompted outrage from some advocates for the poor, and a legal challenge from a trade group that represents cellphone companies. The group argued that Georgia was circumventing federal law to set rates.

But the author of the regulation has argued that the fee’s benefits outweigh the risks, and that it would do much to reduce Georgia’s share of fraud in the Lifeline program, which began in 1985 and was expanded to include wireless coverage two decades later.

“There’s always going to be collateral damage when you’re having a war, and we’re having a war with fraud and abuse,” Commissioner H. Doug Everett told WABE Radio in October.

Stan Wise, one of two public service commissioners who voted against the new regulation, conceded that the Lifeline program has been rife with misconduct, but warned that the fee would be ineffective and damaging.

“What it really does is harm those in the most need and the ones that the program was designed to help,” Mr. Wise said. “If you have three Lifelines and it’s important to you to have the three phones, what’s $15 to you if you’re promoting fraud?”

The program’s troubles have received widespread attention. Aware of the criticisms, the Federal Communications Commission, which cited the potential for “a significant burden on some classes of Lifeline consumers” when it turned back a plan in 2012 to impose monthly fees across the country, has started a campaign to clean up the program, including the introduction of new national databases tracking eligibility and participation.

But if Georgia’s new policy can survive in court, it could be replicated elsewhere by anxious state regulators.

“These sorts of cases are relatively unusual,” said James B. Speta, a professor at Northwestern University who specializes in telecommunications law. “So in a second state or a third state, they will certainly look at what happened in Georgia.”

As the legal battle plays out, Georgia residents who have Lifeline phones are beginning to contemplate what they will do if the fee is put in effect.

Ms. James, who has a monthly budget of about $350, said she was likely to have to choose between her phone and one of the six prescription medications she takes every day.

“I’ve got medicines I’ve got to buy with $5,” said Ms. James, 47, who lives just northwest of Atlanta and said she has medical debts well into six figures after numerous hospitalizations and health issues that include chronic bronchitis and gastrointestinal ailments.

Others who have the Lifeline phones, including Brenda Florence, said they would immediately return them.

“They’re supposed to be free,” said Ms. Florence, 60, who pays for a home landline and cell service but also participates in Lifeline because she receives Medicaid benefits. “I’m going to put it in the box and mail it back.”

In Georgia, where nearly 721,000 people use Lifeline, the debate has also exposed a fissure among those who work to aid people in poverty.

At the Christian Aid Mission Partnership, which provides food and clothing to the region’s poor and sometimes hosts phone providers offering their wares, officials said they endorsed the state’s new effort to stem fraud.

“I think there should be some skin in the game,” said Linda Oviatt, the organization’s outreach director. But she added that she generally supported the Lifeline program because it was “a godsend” for many of her clients.

Other advocates for the poor, though, have been sharply critical of Georgia’s plan.

“The proposed fee simply serves as a penalty on the poor,” the Rainbow PUSH Coalition wrote in an October letter to commissioners. “It is, in essence, a tax being arbitrarily applied to those who can least afford it and an incursion by the P.S.C. on the free market business practices of private companies.”

Back on Lot 54, Ms. James, whose kitchen on a recent day was cluttered with boxed and canned foods, said she thought the debate should focus less on complex legal arguments. She merely wants to keep her aging flip phone.

“It’s so hard on someone who is on a fixed, fixed income,” she said. “It was just an honor to get something that is going to help me.”

DealBook: Icahn Bolsters His Assault on Dell, as Odds Mount Against Him

Judge Rules Against Apple in E-Books Trial

“Without Apple’s orchestration of this conspiracy, it would not have succeeded as it did in the spring of 2010,” the judge, Denise L. Cote of United States District Court in Manhattan, said in her ruling. She said a trial for damages would follow.

Government lawyers argued in court last month that Apple had colluded with five big American publishers to raise prices for electronic books across the publishing market.

The Justice Department brought the antitrust case against Apple and the publishers a year ago. The publishers settled their cases, but Apple executives insisted that the company had done nothing wrong, and the company continued to insist that on Wednesday.

“Apple did not conspire to fix e-book pricing and we will continue to fight against these false accusations,” Tom Neumayr, an Apple spokesman, said. “When we introduced the iBookstore in 2010, we gave customers more choice, injecting much needed innovation and competition into the market, breaking Amazon’s monopolistic grip on the publishing industry. We’ve done nothing wrong and we will appeal the judge’s decision.”

The Justice Department said the judge’s decision was a victory for people who buy e-books.

“Companies cannot ignore the antitrust laws when they believe it is in their economic self-interest to do so,” the Justice Department said in a statement. “This decision by the court is a critical step in undoing the harm caused by Apple’s illegal actions.”

It appears unlikely that the ruling will have an immediate effect on the book-buying public. The publishers who have already settled with the government are operating under the settlement’s terms, which prohibit publishers from restricting a retailer’s ability to discount books.

Since those settlements have gone into effect, prices on many newly released and best-selling e-books have gone down. One New York Times best-seller, “And the Mountains Echoed,” by Khaled Hosseini, is sold on Amazon.com for $10.99. But other e-books seem to have held closer to pre-settlement prices: “The Ocean at the End of the Lane,” by Neil Gaiman, is listed for $12.80 on Amazon.

The antitrust battle underscores the turmoil in the book industry as readers shift from ink and paper to electronic devices like tablets and smartphones, where they can buy content with the push of a button. While the publishers want to embrace new media, they are also trying to protect their profits and retain control of their businesses. Apple’s lawyers noted at the trial that the publishers had long complained that Amazon.com’s uniform pricing of $9.99 for new e-book titles was too low.

A recent survey of the publishing industry revealed that in the United States, e-books account for 20 percent of publishers’ revenue, more than $3 billion, up from 15 percent the year before. E-books have had a slower rate of adoption in Europe and the rest of the world, but analysts expect that major growth will develop in the next several years. A report by Forrester predicted that by 2017, Europe will be the largest e-book market in the world, generating revenue of $19 billion.

In his testimony, Eddy Cue, Apple’s senior vice president of Internet software and services, who was in charge of negotiating deals with the publishers, conceded that Apple opened the door for book publishers to raise prices in its own e-book store. But he said that the company was not intending to push Amazon, the dominant player in the e-book market, to raise its prices, too.

“Amazon could have negotiated a better deal,” Mr. Cue said in his testimony. “They had a lot more power.”

But the Justice Department said Apple’s deal with the publishers left Amazon with no choice but to raise prices. When Apple entered the e-book market in 2010, it changed the way publishers sold books by introducing a model called agency pricing, where the publisher — not the retailer — sets the price, and Apple took a cut of each sale. As a result, the publishers were able to set e-book prices higher. Apple proposed price caps of $12.99 and $14.99.

A Vulnerable Age: Fraud Against Seniors Often Is Routed Through Banks

Bruno Koch, 83, told the telemarketer on the line that, yes, of course he would like to update his health insurance card. Then Mr. Koch, of Newport News, Va., slipped up: he divulged his bank account information.

What happened next is all too familiar. Money was withdrawn from Mr. Koch’s account for something that he now says he never authorized. The new health insurance card never arrived.

What is less familiar — and what federal authorities say occurs with alarming frequency — is that a reputable bank played a crucial role in parting Mr. Koch from his money. The bank was the 140-year-old Zions Bank of Salt Lake City. Despite spotting suspicious activity, Zions served as a gateway between dubious Internet merchants and their marks — and made money for itself in the process, according to newly unsealed court documents reviewed by The New York Times.

The Times reviewed hundreds of filings in connection with civil lawsuits brought by federal authorities and a consumer law firm against Zions and another regional bank that has drawn even more scrutiny, First Bank of Delaware. Last November, First Delaware reached a $15 million settlement with the Justice Department after the bank was accused of allowing merchants to illegally debit accounts more than two million times and siphon more than $100 million.

The documents, as well as interviews with state and federal officials, paint a troubling picture. They outline how banks profit handsomely by collecting fees while ignoring warnings of potential fraud and, in some instances, enabling dubious merchants to prey on consumers.

Anyone, young or old, can be targeted by unscrupulous marketers. But for several reasons — financial worries, age, loneliness — older people are particularly vulnerable to what is known as mass market fraud, deceptive pitches that arrive by telephone, mail and the Internet.

The problems at Zions and First Delaware, where the banks became financial conduits and quiet enablers for questionable businesses, extend well beyond those two institutions, federal authorities say. Indeed, banks across the country, from some of the largest to smaller regional players, help facilitate billions of dollars of fraud each year, according to interviews with consumer lawyers and state and federal prosecutors.

Officials at the Justice Department say they are taking aim at banks’ role in giving predatory lenders and fraudulent merchants access to the United States financial system. The department is considering civil and criminal actions against a number of banks for allowing tainted money to flow through branches, for failing to safeguard against suspicious merchants, and for originating transactions on behalf of businesses that they know make unauthorized withdrawals from customer accounts, according to people with direct knowledge of the matter.

“You can’t close your eyes anymore to the fraud that you are allowing to happen,” said Michael Blume, the director of the consumer protection branch at the Justice Department. “Banks are in business to make a profit. Unfortunately, this is a moneymaking operation at consumers’ expense.”

Zions did not interact directly with the company that called Mr. Koch, National Health Net Online. What the bank did was establish a banking relationship with an intermediary, Modern Payments, that handled payments for National Health. Mr. Koch’s account at a small Virginia bank was debited by National Health, which in turn paid Modern Payments for processing the transaction. Modern Payments gave its bank, Zions, a cut of its fee.

In all, Zions in effect let roughly $39 million be withdrawn from hundreds of thousands of accounts from 2007 to 2009. Much of that money was ultimately transferred to bank accounts in Canada, India and the Caribbean, according to a Times review of court records. Many of the Internet merchants’ customers were older people and others on shaky financial footing. But that, too, worked in banks’ favor: the withdrawals set off a cascade of insufficient fund fees — more than $20 million in all, court records show.

DealBook: Sprint and SoftBank Shore Up Defenses Against a Dish Counterbid

In raising its bid for Sprint Nextel, SoftBank of Japan is doing its best to make sure Dish Network will have a harder time fighting back.

Announced late on Monday, SoftBank’s new offer will give shareholders additional cash, bumping up the effective value of the deal to about $7.48 a share from $6.30 a share. That’s significantly above the $7 a share that Dish had proposed.

In exchange for that higher price, however, SoftBank requested and received a number of tougher protections. Chief among them is a new stipulation that any superior counterproposal have fully committed financing, which would force Dish to sign papers with its lenders.

While the satellite television company has said that it has the money — it has assembled some $9.3 billion in debt from a group of banks — it hasn’t provided formal commitment letters to its would-be merger partner.

Sprint has also put into effect a shareholder rights plan, commonly known as a poison pill, that effectively limits any one investor outside of SoftBank from owning more than 17 percent of the cellphone service provider. That helps prevent Dish from trying to make an end run around the board by making a tender offer directly to Sprint shareholders, much as it is doing at the wireless network operator Clearwire, of which Sprint is seeking full control.

Both are meant to try to box in Dish and its chairman, Charles W. Ergen, who have confounded Sprint and SoftBank with assaults on a number of fronts. Beyond bidding for Sprint itself, Dish also topped the company’s bid for Clearwire shortly before a shareholder vote on Sprint’s offer.

And with SoftBank prepared to close its offer around July 1, it is betting that it can win over shareholders with additional certainty. Any Dish bid is likely to take months to close, primarily because of a lengthy and complex review by the Federal Communications Commission.

But in some ways, Dish has already forced SoftBank into a more uncomfortable position. SoftBank shifted about $3 billion worth of cash from a planned infusion into Sprint to payouts to Sprint’s shareholders. While that won over skeptics like Paulson & Company, Sprint’s second-biggest shareholder, it will take away from a planned transfusion of money meant to strengthen the cellphone service provider and finance an overhaul of its data network.

It will also leave Sprint carrying more debt, though less than it would with the proposed Dish offer.

And thanks to Dish’s $4.40-a-share bid for Clearwire, the smaller telecommunications company’s stock is trading well above the $3.40 a share that Sprint is offering, just days before a shareholder vote on the proposal. Sprint and SoftBank haven’t announced any plans to raise their bid yet, though SoftBank has said that it would be fine with owning 65 percent of Clearwire instead of the entire company.

On the other hand, Dish’s coy approach appears to have cost it ground as well. Among the points of contention between it and Sprint was the size of the breakup fee in any deal between the two companies, according to a person briefed on the matter. While Dish had offered a payout of about $1 billion if a merger fell apart because of regulatory concerns, Sprint wanted about $3 billion to provide extra comfort.

It’s unclear what Dish will do next. The company’s current bid already envisions adding a significant amount of debt onto Sprint’s balance sheet, and some analysts have questioned whether any cost savings from a merger of the two could support ladling on more debt. That said, Dish has argued that the debt level would be manageable.

For now, Dish has said that it’s evaluating the new SoftBank offer as it considers its options.

E-Book Antitrust Case Against Apple to Begin

But the evidence in the case will not just determine whether Apple has violated antitrust laws. It will also tell a broader story of how the introduction of e-books created upheaval in the publishing industry — with guest appearances by major players like Amazon and Barnes & Noble and e-mails from the late Steven P. Jobs, Apple’s former chief executive.

In the case, brought a year ago, the Justice Department accused Apple and five book publishers of conspiring to raise e-book prices. The idea, the government said, was to allow publishers to set their own prices rather than letting retailers do so.

Their motivation, according to the Justice Department, was to defend themselves against Amazon, which was setting the price of most new e-books at $9.99 and becoming increasingly dominant in the market. Simon & Schuster, HarperCollins and the Hachette Book Group settled the day that charges were filed; Penguin and Macmillan settled months later.

Complaints by Amazon, which now controls at least 60 percent of the e-book market, are widely believed to have incited the investigation. Amazon declined to comment.

After the lawsuit was filed, the expectation was that e-book prices would drop sharply; the publishers that settled agreed to allow retailers to discount their e-books for two years. But the price drop has still not happened.

A government victory against Apple, which would not involve monetary damages, might also not affect e-book prices.

“Are consumers going to be better off as a result of any government win here?” said Charles E. Elder, an antitrust lawyer at Irell & Manella, which is not involved in the case. “That’s going to have to be seen depending on what happens to book publishing generally. It’s in trouble, and e-books are either the savior or they’re going to hasten the demise of book publishers.”

Apple declined to comment, but has said it has done nothing wrong.

“The e-book case to me is bizarre,” Timothy D. Cook, Apple’s chief executive, said during an onstage interview at a business conference last week in Southern California. “We’ve done nothing wrong there, and so we’re taking a very principled position of this. We were asked to sign something that says we did do something, and we’re not going to sign something that says we did something we didn’t do. And so we’re going to fight.”

Apple certainly has the money to fight, and a brand to protect, at a time when its stock is sagging and its tax practices and manufacturing processes are under scrutiny. Yet it is bigger than ever — with hundreds of millions of its iPhones and iPads in the hands of customers all over the globe.

The trial, before Judge Denise L. Cote of United States District Court, is expected to feature testimony from chief executives from the five publishers, who will offer a window into their world of fierce price negotiations. But the star witness may well be Mr. Jobs, even though he died in October 2011.

In the case, the government cast Apple as the “ringmaster” of the conspiracy. It said that when the company entered the e-book industry in 2010 with the introduction of the iPad, it wanted to pressure Amazon to raise its prices above its uniform $9.99 for new e-books.

At the time, publishers’ agreements to sell e-books were made under the so-called wholesale model of print books; publishers charged retailers about half the cover price for a book, and the retailers then set their own prices. The government said Mr. Jobs had persuaded publishers to agree to agency pricing, which allowed publishers to set their own prices for e-books, giving Apple a 30 percent commission for books sold in its online store.

The publishers’ contracts with Apple included a “most favored nation” clause, requiring that no other retailer sell e-books for a lower price; if they did, the publisher would have to match the price of the e-book in Apple’s store. That, the Justice Department said, resulted in higher prices that harmed consumers.

Cyberattacks on Rise Against U.S. Corporations

The targets have primarily been energy companies, and the attacks appeared to be probes, looking for ways to seize control of their processing systems. The attacks are continuing, officials said. But two senior administration officials said Sunday that they were still not certain exactly where the attacks were coming from, or whether they were state-sponsored or the work of hackers or criminals.

“We are concerned by these intrusions, and we are trying to make sure they don’t lead to something much bigger, as they did in the Saudi case,” said one senior American official. He was referring to the aggressive attack last summer that affected 30,000 computers at Saudi Aramco, one of the world’s largest oil producers. After lengthy investigations, American officials concluded that Iran had been behind the Saudi Aramco attack.

Another official said that in the new wave of attacks, “most everything we have seen is coming from the Middle East,” but he did not say whether Iran, or another country, appeared to be the source.

Last week’s warning was unusual because most attacks against American companies — especially those coming from China — have been attempts to obtain confidential information, steal trade secrets and gain competitive advantage. By contrast, the new attacks seek to destroy data or to manipulate industrial machinery and take over or shut down the networks that deliver energy or run industrial processes.

That kind of attack is much more like the Stuxnet worm that the United States and Israel secretly used against Iran’s nuclear enrichment plants several years ago, to slow Iran’s progress toward a nuclear weapons capability. When that covert program began, President Obama, among other officials, expressed worry that its eventual discovery could prompt retaliatory attacks.

Two senior officials who have been briefed on the new intrusions say they were aimed largely at the administrative systems of about 10 major American energy firms, which they would not name. That is similar to what happened to Saudi Aramco, where a computer virus wiped data from office computers, but never succeeded in making the leap to the industrial control systems that run oil production.

The Washington Post first reported the security warning on Friday. Over the weekend the Obama administration described what had led to the warning. Those officials began describing the activity as “probes that suggest someone is looking at how to take control of these systems.”

According to one United States official, Homeland Security officials decided to release the warning once they saw how deeply intruders had managed to penetrate corporate systems, including one that deals with chemical processes. In the past, the government occasionally approached individual companies it believed were under threat. Last week’s warning “is an effort to make sure that the volume and timeliness of the information improves,” in line with a new executive order signed by the president, one senior official said.

The warning was issued by an agency called ICS-Cert, which monitors attacks on computer systems that run industrial processes. It said the government was “highly concerned about hostility against critical infrastructure organizations,” and included a link to a previous warning about Shamoon, the virus used in the Saudi Aramco attack last year. It also hinted that federal investigations were under way, referring to indications “that adversary intent extends beyond intellectual property to include use of cyber to disrupt business and control systems.”

At Saudi Aramco, the virus replaced company data on thousands of computers with an image of a burning American flag. The attack prompted the defense secretary at the time, Leon E. Panetta, to warn of an impending “cyber 9/11” if the United States did not respond more efficiently to attacks. American officials have since concluded the attack and a subsequent one at RasGas, the Qatari energy company, were the work of Iranian hackers. Israeli officials, who follow Iran closely, said in interviews this month that they thought the attacks were the work of Iran’s new “cybercorps,” organized after the cyberattacks that affected their nuclear facilities.

David E. Sanger reported from Washington, and Nicole Perlroth from San Francisco. Michael S. Schmidt contributed reporting from Washington.

Bits Blog: Tech Investor Files Defamation Suit Against Rape Accuser

Araya Diaz/Getty Images, for TechCrunch Michael Arrington, the founder of the TechCrunch news site and now an investor in start-ups.

1:37 p.m. | Updated with link to Valleywag, which first reported news of the suit.

Michael Arrington, the founder of the TechCrunch news site and now an investor in start-ups, has filed a lawsuit against a former girlfriend who has for several weeks alleged in various online forums that Mr. Arrington raped and threatened to kill her.

Mr. Arrington’s lawsuit, filed on Tuesday in federal court in Seattle, alleges that the former girlfriend, Jennifer Allen, has made repeated defamatory, false statements about Mr. Arrington “to smear the plaintiff’s name on the Internet, to destroy his reputation, and to deter third persons from associating with him.” The lawsuit alleges that Ms. Allen, who lives in San Francisco, was motivated by her frustration over her “intermittent romantic involvement” with Mr. Arrington.

Mr. Arrington’s suit doesn’t specify the amount of damages he is seeking, though it said the figure is over $75,000. A letter that Mr. Arrington’s attorney sent to Ms. Allen last month, in which he threatened to sue her if she did not retract her statements, said that Mr. Arrington has pledged to donate any damages to charity.

Ms. Allen didn’t respond to a message sent to her through Facebook. Valleywag, Gawker’s tech industry gossip site, first reported news of the lawsuit.

Mr. Arrington, who now lives in Washington State, is a well-known figure throughout the technology industry. He founded TechCrunch, a news site that he turned into an influential chronicler of the start-up scene. He sold the site to AOL in 2010 for $30 million. He left the next year amid a controversy over potential conflicts of interest stemming from his plan to start a venture capital fund.

Mr. Arrington’s lawsuit notes that his problems with Ms. Allen began March 29, with a post on her Facebook page in which she said she had known him for more than eight years and that it “hurts when you love someone borderline and they can’t feel anything at all for you, and threaten to murder you if you told anyone about the physical abuse — all for keeping his reputation.”

The lawsuit also alleges that Ms. Allen later accused him more explicitly of raping her through posts in the comments section of the Gawker Web site and on her Twitter account. It also alleges that Ms. Allen in various posts on the matter said that the assaults occurred on different dates in March 2012, which she seemed to acknowledge when she referred to the disparity as an “unintentional date mixup.”

E.U. Rules Against Patent Play by Google’s Motorola Unit

The finding, which could lead to a steep fine, comes as the commission tries to ensure that companies do not wield their patent portfolios to block others from using the technologies vital to developing some of the most popular consumer electronics.

“I think that companies should spend their time innovating and competing on the merits of the products they offer — not misusing their intellectual property rights to hold up competitors to the detriment of innovation and consumer choice,” Joaquín Almunia, the European Union’s competition commissioner, said in a statement.

Motorola Mobility obtained an injunction from a German court preventing Apple from using patents called standard-essential for the industry.

The commission said it regarded some injunctions to enforce patent claims as legitimate. But it said that holders of standard-essential patents who had already agreed to fair, reasonable and nondiscriminatory licensing terms had to meet certain standards before resorting to injunctions.

Google referred questions to Katie Dove, a spokeswoman for Motorola, who said the company had followed the procedure in a German court ruling.

“We agree with the European Commission that injunctions should only be sought against unwilling licensees,” Ms. Dove said in a statement.

Motorola has two months to respond to the charges.

Of concern to regulators in Europe is how certain national courts, in particular in Germany have made it relatively easy to win injunctions in such cases, and how that could eventually result in a manufacturer having to take a popular device off the market.

“The patent wars are now widespread,” said Michael A. Carrier, a Rutgers Law School professor who specializes in antitrust law. “But there hasn’t yet been an injunction that has really taken phones out of people’s pockets, and that’s probably one thing that the Europeans are probably really worried about.”

Google completed its acquisition of Motorola Mobility last year to take advantage of patents to bolster its Android operating system. Google picked up 17,000 patents, including many relating to wireless devices that Motorola, a pioneer in the wireless phone business, had pledged to license on reasonable terms.

Those commitments were made to technology standards organizations, intended to assure that basic technical innovations were widely available, stimulating growth in the industry.

While virtually all the major tech companies have sought legal or regulatory intervention, one of the biggest battles has been between Apple and Samsung, the South Korean maker of smartphones and tablets. Apple has complained about Samsung’s using designs and packaging from the iPhone and iPad while Samsung has accused Apple of infringing its wireless telecommunications patents.

Samsung came under formal investigation by Mr. Almunia late last year for the way it has used standard-essential patents and sought injunctions against its competitors.

Google’s acquisition of Motorola Mobility, worth about $12.5 billion, won regulatory approval in Europe last year. But in a warning at the same time, Mr. Almunia said his decision to approve that acquisition would not exonerate any wrongdoing by Motorola in the past.

Mario Mariniello, a competition expert at Bruegel, a research organization in Brussels, said the case is a difficult one to decide. “That judgment may be very difficult,” he said, “but the commission still looks like it wants to set a strong precedent in this case by punishing Motorola for making it so difficult for Apple to win a license.”

He added that “for an injunction to be abusive, so much depends on a licensee, like Apple in this case, showing that it was actually willing to pay a fair price for the technology.”

Mr. Almunia announced formal investigations last April against Motorola Mobility after complaints by Apple, which is concerned about access to other wireless patents for the iPhone and iPad, and by Microsoft, which is concerned about access to video and wireless patents for its products including the Xbox.

On Monday, Mr. Almunia’s department said in a statement that the Motorola Mobility injunction against Apple could amount to “an abuse of a dominant position prohibited by E.U. antitrust rules.” E.U. officials said they were still considering whether to act on Microsoft’s complaint.

Much of the behavior under investigation in this case occurred before Google purchased Motorola Mobility, according to E.U. officials. But Google, as the parent company, may still face costs to cover any fine incurred by Motorola for any past behavior and continuing harm to Apple.

Google has already settled a similar case in the United States by agreeing to license its standard-essential patents to other companies on “fair and reasonable” terms. It also agreed not to seek court injunctions to halt the shipment of smartphones, tablets and other devices that use its standard patents.

This article has been revised to reflect the following correction:

Correction: May 6, 2013

An earlier version of this article misstated the timing of the American and European approval of Google’s acquisition of Motorola Mobility. It was in February 2012, not February of this year. 

Judge Rules Against Viacom in Copyright Suit Against YouTube

The $1 billion lawsuit, first filed in a New York federal court in 2007, became a symbol of the tug of war between media companies and Internet video outlets. In 2010, a judge sided with YouTube. Viacom appealed and last year the United States Court of Appeals for the Second Circuit in New York abandoned the original ruling.

On Thursday, Judge Louis L. Stanton of Federal District Court in New York sided with YouTube, which is now owned by Google, saying the Web video service was protected by the “safe harbor provisions” of the Digital Millennium Copyright Act, which would require YouTube to have knowledge of copyright infringement.

“The burden of showing that YouTube knew or was aware of the specific infringements of the works in the suit cannot be shifted to YouTube to disprove,” Judge Stanton said.

Viacom said on Thursday that it would appeal the decision. “This ruling ignores the opinions of the higher courts and completely disregards the rights of creative artists,” a company spokesman, Jeremy Zweig, said in a statement. “We continue to believe that a jury should weigh the facts of this case and the overwhelming evidence that YouTube willfully infringed on our rights.”

Chad Hurley, YouTube’s co-founder and former chief executive, responded to the ruling by sending a tweet directed at Philippe Dauman, Viacom’s chief executive.

“Hey Philippe, wanna grab a beer to celebrate?!” Mr. Hurley wrote to his nearly 485,000 followers. “YouTube Again Beats Viacom’s Massive Infringement Lawsuit.”

Attacks on Spamhaus Used Internet Against Itself

The short answer is: Not easily. The digital “fire hose” being wielded by the attackers to jam traffic on the Internet in recent weeks was made possible by both the best and worst aspects of the sprawling global computer network. The Internet is, by default, an open, loosely regulated platform for communication, but many of the servers that make its communication possible have been configured in such a way that they can be easily fooled.

The latest attacks, which appeared to have subsided by Wednesday, have demonstrated just how big a problem that can be.

On Tuesday, security engineers said that an anonymous group unhappy with Spamhaus, a volunteer organization that distributes a blacklist of spammers to e-mail providers, had retaliated with a cyberattack of vast proportions.

In what is called a distributed denial of service, or DDoS, attack, the assailants harnessed a powerful botnet — a network of thousands of infected computers being controlled remotely — to send attack traffic first to Spamhaus’s Web site and later to the Internet servers used by CloudFlare, a Silicon Valley company that Spamhaus hired to deflect its onslaught.

This kind of attack works because the botnet exploits Internet routing software and fools Internet servers into responding to requests for information sent simultaneously by a large group of computers. The Internet servers that answer the requests are tricked into sending blocks of data to the victims, in this case Spamhaus and CloudFlare.

The attack was amplified because each of the servers in this case was asked to send a relatively large block of information. The data stream grew from 10 billion bits per second last week to as much as 300 billion bits per second this week, the largest such attack ever reported, causing what CloudFlare estimated to be hundreds of millions of people to experience delays and error messages across the Web.

On Wednesday, CloudFlare described the highly technical game of cat-and-mouse between itself and Spamhaus’s opponents that has played out over the course of the last nine days. After the attackers discovered that they could not disable CloudFlare, which had been hired by Spamhaus to absorb its attack traffic, they changed their strategy.

They took aim at the networks that CloudFlare connected to and began to attack the computer servers that serve as the network’s foundation. These are specialized “peering” points at which Internet networks exchange traffic. The attackers took aim at organizations like the London, Amsterdam, Frankfurt and Hong Kong Internet exchanges, which route regional Internet traffic and are also used by sites like Google, Facebook and Yahoo to pass traffic efficiently among one another.

Here, too, they were unable to stall the Internet completely, but they did slow it, particularly by focusing on the London exchange, known as LINX.

“From our perspective, the attacks had the largest effect on LINX,” said Matthew Prince, CloudFlare’s chief executive, in a description posted on the company’s Web site on Wednesday. For a little over an hour on Saturday, he said, the traffic passing through the LINX infrastructure dropped significantly.

The attacks were episodic, stopping and starting and shifting targets over nine days through Tuesday morning. On Wednesday, Mr. Prince said that there some indications that the attackers were planning further actions, although he said he did not know if they would include DDoS attacks.

Veteran Internet engineers said the attack was made possible by a combination of defects, loopholes and sloppy configuration of Internet routing equipment. Indeed, a number of computer security specialists pointed out that the attacks would have been impossible if the world’s major Internet firms simply checked that outgoing data packets truly were being sent by their customers, rather than botnets. Unfortunately, a relatively small number of Internet companies actually perform this kind of check.

This article has been revised to reflect the following correction:

Correction: March 30, 2013

An article on Thursday about a broad online attack said to have been waged by a group unhappy with the activities of the anti-spam organization Spamhaus rendered incorrectly, in one reference, part of the name of the organization that oversees the Internet domain name system. As the article correctly noted elsewhere, it is the Internet Corporation for Assigned Names and Numbers, not the International Corporation for Assigned Names and Numbers.

Spanish Magazine Publisher Bets Against the Crisis

MADRID — Andrés Rodríguez, the publisher and founder of SpainMedia, has the most at stake in the debut this month of a Spanish-language edition of Forbes, the U.S. business magazine, in crisis-hit Spain.

For Forbes Inc., the New York-based publisher of Forbes Magazine and his partner in the Spanish licensing venture, “their only risk is if the magazine really proves a failure, because that could hurt their image,” Mr. Rodríguez said Thursday during an interview in his office, inside what had been an abandoned printing-equipment plant. “I’m also betting my image, as well as my money and my work.”

SpainMedia is swimming against a tide that has driven many other Spanish media entrepreneurs out of business amid a recession and credit squeeze. Since the start of the financial crisis, dozens of Spanish publications have shut down and more than 8,000 journalists have lost their jobs, according to the Federation of Spanish Journalist Associations.

In this climate, SpainMedia is adding its incarnation of Forbes to a roster that includes Spanish editions of three other well-known periodicals: Esquire and Harper’s Bazaar — both owned by Hearst — and Robb Report, which is owned by CurtCo Media Labs in Malibu, California. SpainMedia also publishes its own travel magazine, Orizon.

Mr. Rodríguez’s outlook on the future of magazines in Spain goes beyond being merely optimistic. “I’m a publisher who believes that paper as a product is more alive than ever,” he said.

He also sees the sector returning to its “golden era” of 50 years ago when advertising mushroomed and magazines set the benchmark for photojournalism.

“Magazines have their own language and we need to return to the origins of that language,” he added. “It’s also about walking into a bar and sending a very clear message by the way you’re holding the magazine under your arm – and that’s an experience that anything digital will never give you.”

Yet no matter how much Mr. Rodríguez values paper, the transition from print to digital magazines “is now happening, even if it is slower than for daily newspapers,” according to the journalist Pedro Cifuentes, director of a master’s degree program in digital journalism at the IE Business School in Madrid. Mr. Cifuentes said early estimates suggested that circulation for digital magazines had risen 15 percent in Spain last year, compared with a 5 percent decline in printed copies, in line with what happened in markets like Britain. Meanwhile, advertising has fallen about 40 percent overall since the start of the global economic crisis in 2008.

Forbes already published 26 other licensed editions of its magazine, including several in East European countries like Poland and Romania. Spain is the first foray by the family-controlled Forbes into Western Europe.

Asked about the timing of its Spanish entry, Miguel Forbes, a family member who is in charge of the publisher’s worldwide development, said by telephone recently that “the time to launch is when a market is in the process of recovery.”

The Spanish edition of Forbes, a monthly released March 6, had a print run of 65,000 copies. Neither Mr. Forbes nor Mr. Rodríguez would disclose financial details about their venture, which involves SpainMedia paying a licensing fee to Forbes based on its magazine sales and advertising revenues.

“Andrés has shown that he’s able to put out very strong titles with a very lean staff,” Mr. Forbes said of Mr. Rodríguez. “A lot of publishers have a big staff, but it’s hard to make money when you have a large headcount.”

SpainMedia, which has annual sales of about €10 million, or $13 million, operates out of the former printing facility, which Mr. Rodríguez bought two years ago “in the midst of the property collapse” and then renovated. The company has only 30 employees, with an average age of 28. Half the staff members are journalists.

Patent Office Rejects Apple Patent Used Against Samsung

The United States Patent and Trademark Office has dealt a blow to Apple in its legal battle with Samsung Electronics over smartphone patents, declaring that a patent that helped Apple win $1.05 billion in damages against Samsung in a jury trial should not have been granted.

The patent office’s action this week was made public by Samsung in a filing on Wednesday in Federal District Court in San Jose. In the court document, Samsung, the Korean electronics giant, said the action should be weighed in evaluating its petition for a new trial and its challenge to the damages award.

Apple is expected to appeal the patent office’s ruling, so the patent has not been invalidated yet.

The patent, No. 7,844,915, is one of six that a jury in August found that Samsung had infringed. It covers usability software that distinguishes between single-touch and multitouch gestures on a smartphone or tablet screen.

The patent is widely known as the “pinch to zoom” patent, but the software is actually narrower in scope. Apple’s legal documents refer to it as controlling a “scroll versus gesture” feature.

Of the six patents that were the basis of the ruling against Samsung, this is the second that the patent office has concluded, on re-examination, should not have been granted.

In October, the office came to the same conclusion about the patent for Apple’s “rubber-banding” or “bounce” feature, which makes a digital page bounce when a user pulls a finger from the top of the touch screen to the bottom.

“It’s a strike against Apple, but it is far from the whole ballgame,” said Mark A. Lemley, a Stanford Law School professor.

Apple is likely to challenge the patent office’s action this week, as it did the October decision.

If the patent office’s rejections hold up after Apple makes its appeals, the court could grant Samsung’s motion for a new trial. It is more likely, however, that the damages award will be considerably reduced, said James Bessen, a patent expert at the Berkman Center for Internet and Society at Harvard University.

F.T.C. Pushes Antitrust Inquiry Against Google Into January

WASHINGTON — Google was prepared to start the holidays early this week, by settling its antitrust dispute with federal regulators without a harsh punishment.

But in shelving its inquiry until January, the Federal Trade Commission has put stronger penalties back on the bargaining table, people briefed on the investigation who were not authorized to speak publicly about it said Wednesday.

For two years, the F.T.C. has been looking into whether Google abuses its market power by favoring its own services over rivals in search results. Google and the agency had been planning to sign a settlement this week that would have said Google would change some of its behavior but that would not have been subject to court action.

The agency may now demand a consent decree — a formal order detailing anticompetitive behavior and an agreement that if the company does the same thing again, it could be fined and subject to court sanctions. Google has instead offered voluntary concessions.

But the people briefed, and others close to the negotiations, said the agency was unlikely to take a second look at one of the major issues — Google’s dominance in specialized search, like travel and local reviews — because the legal hurdles remain high.

Google has long said that it does not believe it has broken antitrust laws and that the agency’s case against it is weak. Jill Hazelbaker, a Google spokeswoman, said that it continued to cooperate with the F.T.C. but declined to comment further.

Cecelia Prewett, an F.T.C. spokeswoman, declined to comment.

Competitors of Google called for the agency to use the additional time to take harsher legal action against Google. Failing to do so would hurt consumers in many ways, including by allowing Google too much control over private data, said Pamela Jones Harbour, a former F.T.C. commissioner and a lawyer representing Microsoft.

Supporters of Google said its case had already been made.

“If in 19 months they did not offer the kind of evidence and facts to support a case or conclude the behavior was such that it was posing legal difficulties, then frankly another couple weeks isn’t going to make a difference,” said Ed Black, chief executive of the Computer and Communications Industry Association, of which Google is a member.

Regulators’ decision to delay resolution of the case offered a glimpse of the tense negotiations and a series of missteps that have bedeviled the negotiations.

As details of a possible settlement appeared in news reports over the last week, Google’s competitors began arguing that a settlement without court-enforced sanctions was meaningless.

At the F.T.C., people close to the agency said, commissioners grew irked that they were being portrayed as spineless. In a parallel investigation, European regulators were said to be wringing a more stringent agreement from Google.

But it was unclear that Jon D. Leibowitz, the F.T.C. chairman, could get the two votes necessary to approve a tougher case against Google.

The five commissioners had yet to vote on possible sanctions. Julie Brill, a Democrat commissioner, supported strong antitrust action, while Edith Ramirez, the commission’s other Democrat, has resisted the strictest sanctions, said the people who have been briefed on the inquiry.

J. Thomas Rosch, a Republican, questioned whether the agency had the evidence to bring a case on search manipulation, but also expressed skepticism at a settlement that did not involve a consent decree, the people briefed said. Maureen K. Ohlhausen, the other Republican commissioner, opposed the government’s interference in private enterprise, they said.

Each of the commissioners and an F.T.C. spokeswoman declined to respond to queries about their views on the settlement.

Throughout the deliberations, both sides have complained about leaks to the news media of details of private meetings and settlement terms.

Edward Wyatt reported from Washington and Claire Cain Miller from San Francisco.

This article has been revised to reflect the following correction:

Correction: December 21, 2012

An article on Thursday about the Federal Trade Commission’s investigation of Google misspelled the surname of the commission’s chairman. He is Jon Leibowitz, not Liebowitz.

Apple Loses Copyright Appeal Against Samsung in Britain

LONDON (AP) — The Court of Appeal in Britain on Thursday backed a judgment that the Samsung Galaxy tablet computer was “not as cool” as the Apple iPad, and therefore did not infringe on Apple’s rights.

The panel’s upholding of the findings by a lower court endorses a decision that made headlines around the world when it was issued in July. Judge Colin Birss at the time praised Apple’s design while rejecting the company’s case against its rival.

“The extreme simplicity of the Apple design is striking,” Judge Birss wrote at the time, pointing out its “undecorated flat surfaces,” as well as its “very thin rim” and “crisp edge.”

“It is an understated, smooth and simple product,” Judge Birss wrote, saying that Samsung’s products were “not as cool.”

On Thursday, the Court of Appeal agreed unanimously with Judge Birss, with Judge Robin Jacob ordering Apple to publicize the court rulings to make sure consumers knew that Samsung did not infringe on Apple design patents.

“The acknowledgment must come from the horse’s mouth,” Judge Jacob said. “Nothing short of that will be sure to do the job completely.”

Kim Walker, a partner with the English law firm Thomas Eggar, said the ruling was an endorsement of Samsung’s originality.

“It appears that you don’t have to be cool to be original when it comes to intellectual property rights,” she wrote in an e-mail.

The case, which Apple can appeal to the Supreme Court, is one of several in Apple and Samsung’s copyright battle, which has intensified across Europe and the United States.

F.T.C. Staff Prepares Antitrust Case Against Google Over Search

The government’s escalating pursuit of Google is the most far-reaching antitrust investigation of a corporation since the landmark federal case against Microsoft in the late 1990s. The agency’s central focus is whether Google manipulates search results to favor its own products, and makes it harder for competitors and their products to appear prominently on a results page.

The staff recommendation is in a detailed draft memo of more than 100 pages that is being shared with the five F.T.C. commissioners, said two people briefed on the inquiry.

The memo is still being edited and changes could be made, but these are mostly fine-tuning and will not alter the broad conclusions reached after an inquiry that began more than a year ago, said these people, who spoke on the condition that they not be identified.

Google said in a statement on Friday, “We are happy to answer any questions that regulators have about our business.” In the past it has said many times that “competition is a click away.”

The commission is also building a team to take Google to court, if it comes to that. Last spring, it hired a seasoned litigator to help with the case, Beth A. Wilkinson, a partner in the firm Paul, Weiss in Washington. In a further sign that it means business, last week it brought on a well-known economist as a consultant: Richard Gilbert of the University of California, Berkeley.

The F.T.C. staff memo does not mean that the government will sue Google for antitrust violations. Next, the vote of three of the five F.T.C. commissioners would be required. And each step is a further prod for Google to make concessions to reach a settlement before going to court. Last month, Jon Leibowitz, chairman of the F.T.C., said a final decision on whether to sue Google would be made before the end of this year.

The Google investigation echoes the Microsoft case in a basic way. Google, like Microsoft in the personal computer industry, has drawn complaints from rivals and antitrust regulators as it has expanded its business beyond its dominant product, search and search advertising. Google has aggressively built off this main business to fields including online commerce and smartphone software.

As it expands its empire, Google takes on new competitors and brings formidable resources. Rivals may suffer, Google says, but the company is improving its products and services, benefiting consumers and the economy.

The American inquiry is moving in tandem with a major antitrust investigation in Europe. The European authorities are pressing ahead and seeking changes in Google’s behavior.

Speaking in New York last month, Joaquín Almunia, the European Union’s competition commissioner, pointed to antitrust regulators’ concerns that Google is “using its dominance in online search to foreclose rival specialized search engines and search advertisers.”

Google is also being investigated by the attorneys general of six states: Texas, Ohio, New York, California, Oklahoma and Mississippi.

Given the momentum of the investigations, antitrust experts say, the F.T.C. staff recommendation was to some extent expected.

The F.T.C. investigators have looked at a wide range of Google’s business practices, according to companies that have been questioned and received subpoenas from the agency.

The areas of inquiry include accusations of manipulating the search results it displays to favor Google commerce services it has developed like Google Shopping for buying goods and Google Places for advertising local restaurants and businesses. In the civilian subpoenas, the F.T.C. calls this “preferencing.”

The investigators are also looking into whether Google’s automated advertising marketplace, AdWords, discriminates against advertisers from competing online commerce services like comparison shopping sites and consumer review Web sites.

Claire Cain Miller and Edward Wyatt contributed reporting.

Rage Against The Machine — NEW ALBUM IN THE WORKS … Maybe

Rage Against The Machine
NEW ALBUM IN THE WORKS!
(Maybe)

 
It's been twelve years since Rage Against the Machine broke up ... but now, the band's bassist is totally hinting to TMZ that the guys are secretly working ON A BRAND NEW ALBUM!!!

Tim Commerford was leaving a cafe in Malibu when we asked if Rage had anything new in the works -- and in a very coy way ... like he really WANTED to tell us something but couldn't ... Tim replied, "Maybe ... maybe."

Of course, a new album would be HUGE -- Rage broke up in 2000 when singer Zack de la Rocha left the band. The remaining members later reformed as Audioslave with singer Chris Cornell, but it just wasn't the same.

As for Commerford's missing tooth -- the bassist says he's now into "removing teeth" ... like, for fun. Watch the video.

AT&T’s Stephenson and a Personal War Against Texting While Driving

He’s been saying it a lot lately, at investor conferences, the annual shareholder meeting in April, town halls and civic club meetings, and in conversations with chief executives of other major companies.

AT&T is not the first or only carrier to raise awareness on this issue, but the message is starting at the top and it’s personal.

Mr. Stephenson said in an interview that a few years ago someone close to him caused an accident while texting. As he has become more vocal about texting and driving, he said people were coming up to him and writing him with their own stories of tragedy, including admissions that they caused accidents.

The smartphone, he says, “is a product we sell and it’s being used inappropriately.” For him, that means the company he runs has to get involved in a public awareness campaign. “We have got to drive behavior.”

Safety advocates say for the moment that they are particularly impressed by AT&T’s persistent and broad efforts to draw attention to the problem of texting while driving.

They say history shows that public service campaigns have had limited success on issues like drunken driving or seat belt use unless they are paired with strong laws, something Mr. Stephenson opposes.

“AT&T in particular has invested quite a bit in messaging and I’m hopeful it will make consumers aware,” said Bill Windsor, the chief safety officer at Nationwide Insurance. “It certainly can’t hurt,” he added, “But law enforcement is the other step that’s needed to curb behavior.”

David D. Teater, senior director of the National Safety Council, whose son was killed by a driver talking on her phone, said he was pleased to see telecommunications companies, including AT&T, no longer lobbying against laws aimed at curbing driver distraction caused by electronic devices.

“We’d love their support on the legislative side,” he said of AT&T’s position. “But the fact they’re not opposing us is good.”

Mr. Stephenson said he would prefer market-driven solutions to legislative ones. He hopes that changing the culture can work. Verizon Wireless supports state and federal legislation to ban texting by drivers and has been credited by safety advocates for raising awareness years ago.

Currently, 39 states ban texting while driving. Research shows that the activity sharply increases the risk of a crash, even beyond the risk posed by someone driving with a .08 blood alcohol level, the legal limit in many states. Yet researchers say that there is no indication drivers are less inclined to text and drive, and there is some indication that the behavior is increasing.

To that end, Mr. Stephenson also appeared on Wednesday at an event in Washington with Julius Genachowski, chairman of the Federal Communications Commission, and Ray LaHood, the transportation secretary, who has called distracted driving an epidemic. They called on people to take a lifelong pledge not to text and drive.

On Sept. 30, AT&T will offer a free, revised version of its DriveMode app for Android and BlackBerry phones that will automatically disable texting when the phone is traveling more than 25 miles an hour. There is no app, though, for the popular iPhones.

The motivation is to bypass a driver’s urge to answer the chime of the incoming text or e-mail. Mr. Stephenson said the technology might eventually block phone calls to drivers. There are several such apps like DriveMode on the market, from Verizon, T-Mobile and Sprint, but they have thus far had limited adoption, said Mr. Windsor, from Nationwide Insurance.

The app is part of a broader campaign called “It Can Wait,” that began in 2010. It has included gripping and graphic videos and commercials, like a recent one with a testimonial from a young man who suffered brain damage in an accident caused by a texting driver. The tagline is, “Last Text.”

The company won’t say exactly how many millions it is spending on the campaign.

“I told people that what we’re going to do is make people a bit uncomfortable and maybe be a bit impolite,” Mr. Stephenson said.

He added that he had to curb his own behavior, too. “When I went public, I told my wife: ‘You know what this means? I can no longer touch this iPhone or BlackBerry in the car.’ ” He puts his devices in a cup holder and silences them. “It was a habit I had to break.”

H.P. Wins Suit Against Oracle Over Support for Servers

Hewlett-Packard accused Oracle of violating a contract when it decided last March that it would no longer make new versions of its database software compatible with H.P.’s high-end servers based on the Intel Corporation’s Itanium chips. Oracle maintained that it had no such contract.

The servers are used mostly by large corporations with rigorous computing needs.

Judge James P. Kleinberg of Santa Clara County Superior Court wrote on Wednesday that a contract existed between Hewlett and Oracle, and that Oracle was required to continue to offer its product suite on Hewlett’s Itanium server platform.

Oracle is required to port its products to Hewlett’s Itanium-based servers without charge, the judge ruled.

“The parties had a long history of trust and collaboration, the promises made by the Oracle executives were clear and unambiguous,” Judge Kleinberg wrote in the preliminary ruling, “and the parties’ relationship was very profitable for both companies.”

Oracle said it planned to appeal the decision.

“We made the decision as we became convinced that Itanium was approaching its end of life and we explained our rationale to customers,” Oracle said in a statement. “Nothing in the court’s preliminary opinion changes that fact.”

The dispute began after the companies became rivals when Oracle bought Sun Microsystems. The purchase moved Oracle into the server hardware field, in which it previously was a partner with Hewlett-Packard.

Also, Oracle hired Mark Hurd, H.P.’s former chief executive, in 2011 after he left Hewlett amid questions over his relationship with a female contractor.

Judge Kleinberg’s ruling did not address damages. It is possible that a jury will decide the issue.

Hewlett-Packard, which seeks as much as $4 billion in damages, called the ruling “a tremendous win” and said it expected Oracle to comply with its “contractual obligation as ordered by the court.”

H.P. Wins Suit Against Oracle Over Support for Servers

Hewlett-Packard accused Oracle of violating a contract when it decided last March that it would no longer make new versions of its database software compatible with H.P.’s high-end servers based on the Intel Corporation’s Itanium chips. Oracle maintained that it had no such contract.

The servers are used mostly by large corporations with rigorous computing needs.

Judge James P. Kleinberg of Santa Clara County Superior Court wrote on Wednesday that a contract existed between Hewlett and Oracle, and that Oracle was required to continue to offer its product suite on Hewlett’s Itanium server platform.

Oracle is required to port its products to Hewlett’s Itanium-based servers without charge, the judge ruled.

“The parties had a long history of trust and collaboration, the promises made by the Oracle executives were clear and unambiguous,” Judge Kleinberg wrote in the preliminary ruling, “and the parties’ relationship was very profitable for both companies.”

Oracle said it planned to appeal the decision.

“We made the decision as we became convinced that Itanium was approaching its end of life and we explained our rationale to customers,” Oracle said in a statement. “Nothing in the court’s preliminary opinion changes that fact.”

The dispute began after the companies became rivals when Oracle bought Sun Microsystems. The purchase moved Oracle into the server hardware field, in which it previously was a partner with Hewlett-Packard.

Also, Oracle hired Mark Hurd, H.P.’s former chief executive, in 2011 after he left Hewlett amid questions over his relationship with a female contractor.

Judge Kleinberg’s ruling did not address damages. It is possible that a jury will decide the issue.

Hewlett-Packard, which seeks as much as $4 billion in damages, called the ruling “a tremendous win” and said it expected Oracle to comply with its “contractual obligation as ordered by the court.”