Inside story of HP deal to be told in trial of fallen tech star
Meg Whitman is not on trial, but a 2011 acquisition of software maker Autonomy she inherited after joining Hewlett Packard as its CEO has led to charges for others.
SAN FRANCISCO — An $11 billion acquisition that backfired on Silicon Valley pioneer Hewlett Packard more than a decade ago was resurrected during a trial Monday that will explore whether the deal was an illegal rip-off or a case of botched management.
The criminal trial in San Francisco federal court revolves around HP’s acquisition of British software maker Autonomy, a deal that was celebrated as a coup when it was announced in 2011, only to become a costly debacle.
Before HP wrapped up the deal, Meg Whitman was hired to be CEO of the company started 85 years ago by Bill Hewlett and Dave Packard in a Palo Alto, California, garage that has become a Silicon Valley shrine.
Whitman, who rose to fame and fortune while running online commerce site eBay in its formative years, had hoped the Autonomy deal would bolster her efforts to lift HP out of the doldrums; instead, it became an albatross that dragged the company down.
As HP’s fortunes continued to sag, Whitman laid off thousands of workers and eventually engineered a breakup that split the storied company into two entities in 2015. She stepped down as CEO of the spunoff company, Hewlett Packard Enterprises in 2018.
The alleged villains in the trial are former Autonomy CEO Mike Lynch, who once was lionized as a shining example of British ingenuity, and Stephen Chamberlain, Autonomy’s former vice president of finance. Both are defending themselves against 16 felony counts of fraud and conspiracy in a trial expected to run until late May or June and include testimony from more than 40 witnesses.
Autonomy’s former chief financial officer, Sushovan Hussain, was convicted on 16 criminal counts of fraud and conspiracy and sentenced to five years in prison in 2019.
The trial targeting Lynch and Chamberlain is also expected to cast a spotlight on Whitman, who dipped into her estimated fortune of $3 billion to finance an unsuccessful campaign to become California governor as the Republican Party nominee in 2010.
Not long after that political setback, Whitman joined HP’s board and then was tapped to replace company CEO Leo Apotheker, who had negotiated the Autonomy acquisition before being replaced in September 2011 just before the deal was completed.
At the time, HP was struggling to remain relevant amid a technological shift to mobile computing being driven by the then-rising popularity of smartphones. The upheaval depressed demand for desktop and laptop computers, a market that had been one of HP’s financial cornerstones. In an effort to lessen its dependence on PCs, HP snapped up Autonomy to gain ownership of software focused on helping businesses quickly sift through vital information stored in email, phone records and other repositories.
But HP uncovered evidence that Autonomy had inflated its value after the takeover, prompting Whitman to write off nearly $9 billion of the acquisition price.
NEW YORK — The New York Times is fighting off Wordle “clones” — arguing that numerous games inspired by the mega-popular word-guessing game infringe on its copyright protections.
Hundreds of copycats have emerged since Wordle skyrocketed to internet fame less than three years ago. And now the Times, which purchased the game in 2022, is sending takedown notices to people behind some of the lookalikes.
The Times has filed several Digital Millennium Copyright Act, or DMCA, takedown notices to developers of Wordle-inspired games, which cited infringement on the Times’ ownership of the Wordle name, as well as its look and feel — such as the layout and color scheme of green, gray and yellow tiles.
In a statement, a New York Times Co. spokesperson said the company has no issue with people creating similar word games that do not infringe on its Wordle “trademarks or copyrighted gameplay.” But the company took action against one user on software developer platform GitHub who created a “Wordle clone” project that included instructions on how to create “a knockoff version” of Wordle and against others who shared his code.
“As a result, hundreds of websites began popping up with knock-off ‘Wordle’ games that used The Times’ Wordle trademark and copyrighted gameplay without authorization or permission,” the spokesperson said.
GitHub gave the user an opportunity to alter the code and remove Wordle references, the spokesperson added, but he declined.
The New York Times is fighting off Wordle “clones,” arguing that numerous games inspired by the popular word-guessing game infringe on its copyrights.
The Times’ DMCA takedown notices were first reported this month by tech outlet 404. Numerous affected developers have also taken to social media to share their frustrations. Many said their games would be taken down.
Vignesh Venkat, a California-based software engineer, said he built his variant of Wordle several years ago, when the game first gained popularity. He said he had since forgotten about his game, only playing it sporadically in recent years when reminded by friends.
“I don’t know what they’re really going to get out of this,” he said. “I mean, (the Times) probably have like millions of people (playing) their game, and there’s like hundreds or thousands of people playing mine.”
Robert Brauneis, a professor at George Washington University’s Law School, added that a German-language Wordle spinoff that he and his wife used to play, which was once found at “wordle.at,” appeared to have been removed in the past week or two — suggesting that it may have also received a takedown notice.
As of March 11, a message on wordle.at’s site, now named Gridgames, says the game was voluntarily removed after receiving a “complaint with reference to US trademark law.”
DMCA notices act as a tool for copyright holders to get content that infringes on their intellectual property taken down. Affected users can fight to keep what they published up, but that opens up the possibility of costly litigation. As a result, many don’t dispute takedowns.
Still, Brauneis said he believes the Times’ arguments for Wordle copyright infringement are on “a little bit shaky ground” for several reasons. Rules of a game, for example, are not covered by copyright — and that can include the layout of the game itself.
“If you’re using that six-by-five grid to implement game rules (of correctly guessing a word) ... I think that grid is not copyrightable,” Brauneis, who specializes in intellectual property law, told the AP. “It is dictated by the rules of the game.”
Brauneis added that the trademark to Wordle’s name, while enforceable, does not belong in a DMCA notice because copyright law is separate from trademark law.
Software engineer Josh Wardle created the daily puzzle and made it public in 2021. In January 2022, he sold Wordle, which marked its 1,000th game Friday, to the Times for a reported seven-figure payday.