Attempting to ride a wave of corporate and judicial disenchantment with aspects of the current patent system, a new project was unveiled Thursday designed to, as its name bluntly indicates, End Software Patents. (Press release is here. The group’s “first yearly report” on the state of software patents is here.)

The group is intended to become a clearinghouse for information and a hub for those strategizing legal challenges, according to its executive director, Ben Klemens. Though End Software Patents will not initiate litigation of its own, it will be on the lookout for appropriate test cases to support as they arise, he says.

Though the project is being sponsored and funded by leaders of the Free and Open Source Software movement, it hopes to attract support from the wider community of businesses, financial institutions and universities that have all been blindsided in recent years by lawsuits over software patents and their close-cousins, business-method patents.

The End Software Patents Web site, here, highlights a long list of diverse businesses that have been sued for allegedly infringing software patents, including the Green Bay Packers, OfficeMax, Caterpillar, Kraft Foods , ADT Security Services, AutoNation, Wal-Mart , Walgreen , Barnes & Noble, Circuit City Stores , Ford Motor , E I du Pont de Nemours and Co. , and so on. In most cases, the companies have been sued because of certain basic, routine functions performed on their Web sites — the way images are displayed, the way data is gathered or transmitted — which are said to infringe software patents.

The group also hopes to attract support from the many financial institutions, including JP Morgan , Merrill Lynch , and NCR Corp. , that have been asked to pay patent holding company DataTreasury for permission to send check images over the Internet. (For a Washington Post story about remarkable proposed federal legislation directed specifically at the DataTreasury patent, click here.)

The point, explains Klemens, is this: “If you’re running a business of any sort, you have to care about the software and business method patents.” That’s because nearly every business today operates a Web site and employs a staff of in-house IT programmers who enable them to conduct business in the digital age. In that sense, every business is now a software business.

Klemens is a mathematician (a guest scholar at the Brookings Institution since 2003) who uses algorithms to analyze data. In a recent article, for instance, he and his co-authors use data analysis to link certain genes to bipolar disorder. “I often run into patents on statistical methods and mathematical algorithms of the type that I implement,” Klemens says. “I don’t think I violate the ones I’ve seen, but I could be wrong, and I don’t know what else is out there. . . . That’s the thing that really woke me up: by doing pure math, I face legal liability. As far as I know, that’s a first in human history.” Klemens’s personal Web site is here.

In a 2005 book, Mathematics You Can’t Use, Klemens criticizes software patents from an economic and legal perspective, and does so in unusually crystalline, easy-to-understand terms. (For chapter one, see here, and for chapter six, see here.)

The book attracted the attention of the Free Software Foundation, whose president, Richard Stallman, has been railing against software patents since at least 1991, for related, but narrower, reasons: they posed a potentially mortal threat to his brainchild, free software — i.e., software, like Linux, that programmers are able freely to examine, modify, and redistribute without fear that their work will ever be taken out of circulation, declared off-limits, or placed behind a toll-booth by private proprietors. (For a feature story on the tension between patents and free and open software, “Microsoft Takes On the Free World,” see here. Generally speaking, though, software patents present dangerous traps for any programmer. Unlike copyrights, which are difficult to infringe inadvertently, a programmer can easily write software that inadvertently infringes someone else’s patent. That happens whenever the programmer independently comes up with an innovation that, unbeknownst to him, someone else has already staked a claim to. While copyrights are relatively easy to write around — since they protect only particular sequences of words or code — patents present broader, vaguer, and more durable obstacles, since they purport to proprietize implementations of ideas.)

In Klemens, the Free Software Foundation saw a potential ally who, thanks to the breadth of his critique and clarity of his writing, could attract a broader audience than just free and open source programmers. “We came to him,” says Peter Brown, the foundation’s executive director, “and said, we really want to fund your work. And he said yes.”

At the moment, the End Software Patents project is formally an offshoot of the Free Software Foundation. It also enjoys the “sponsorship” — though not monetary support — of the Software Freedom Law Center, which is led by Eben Moglen (an outside lawyer for the FSF and its former general counsel), and of the Public Patent Foundation, an organization led by the center’s legal director Dan Ravicher. The Software Freedom Law Center is itself funded largely by such Linux-supporting corporate patrons as IBM (IBM), Hewlett-Packard (HPQ), Red Hat (RHT), Novell (NOVL), Oracle (ORCL), and Sun Microsystems (JAVA).

To be sure, the goal of abolishing software patents remains a radical position in the sense that very few corporations endorse it. (A surprising exception is pharmaceutical manufacturer Eli Lilly & Co. See here. Evidently Lilly recognizes that poor quality software patents are among the problems spurring the tech industry to seek patent reforms, and it hopes to find of way of placating the tech industry without weakening protections for the drug patents that are the lifeblood of the pharmaceutical industry.)

Though many information technology companies, like IBM, Hewlett-Packard, and Cisco, are publicly championing patent reform, they only favor improving the quality of software patents, not abolishing them. After all, there are estimated to be more than 200,000 active, issued software patents in the United States, and most major tech companies have acquired, at considerable expense, substantial portfolios of them. Companies like Philips Electronics also argue that drawing the line between hardware and software is no longer easy, and that many patents relate to processes that were once accomplished using hardware but are now accomplished using software. Why should the modernization of the medium deprive Philips of recognition for its inventions, its lawyers have argued (albeit, in a slightly different context). See here.

Still, Klemens expects his group to find much common ground with the more moderate IT industry reformers, as well as with those whose main bugaboo is business-methods patents. “Pretty much every argument we make, top to bottom, applies to business methods as well,” Klemens says. In addition, the group’s supporters hope that the major tech players are coming to conclude that the vast number of software patents they have accumulated is part of the problem. “There are so many rights in so many hands,” says Moglen, of the Software Freedom Law Center, “everybody is at risk all the time.”

In any case, even if End Software Patents’ goals are extreme, they are not far-fetched. The U.S. Supreme Court has never ruled on the patentability of software, and at one time the predominant assumption among lawyers was that it could not be, because it amounted to nothing more than mathematical algorithms, which, in turn, were considered nonpatentable “laws of nature.”

That assumption was gradually turned upside down through a series of decisions rendered in the 1990s by the U.S. Court of Appeals for the Federal Circuit, a specialized court that had been set up to handle patent appeals, among other things, in 1984. Those decisions suggested that even if pure software itself was not patentable, software when loaded onto a general-purpose computer created, in effect, a new physical device that could then be patented. Some of the same rulings that opened the door to software patents effectively opened the door to “business method” patents, too.

In the past two years, however, it has become clear to all that the U.S. Supreme Court is extremely unhappy with the patent environment that the Federal Circuit has fostered in the two decades since its creation. In eBay v. MercExchange (May 2006), the Court unanimously junked one longstanding rule of that court, and last term, in KSR International v. Teleflex (April 2007), it unceremoniously dispatched another. (In eBay, the Supreme Court ruled that judges need not always enjoin defendants from infringing, even after a patent-holder has proven its case, and in KSR it made it much easier for judges and patent examiners to invalidate patents due to obviousness.)

For Klemens, however, the most encouraging ruling for his agenda was one that, technically, wasn’t. In LabCorp v. Metabolite Laboratories (June 2006), the Supreme Court had been asked to review the Federal Circuit’s precedents on patentability – the issue that ultimately also determines whether software patents and business-method patents are permissible. After hearing oral argument, the Court punted, deciding that, for technical reasons, it never should have heard the case in the first place. But three justices dissented, writing that they would have overturned the Federal Circuit and invalidated the patent in question, because it clearly amounted to an attempt to patent a nonpatentable “natural phenomenon,” though the phenomenon had been recast in the patent application as a patentable “process.” For that opinion, see here. Klemens contends that software patents amount to much the same thing.

Though only three justices signed the dissent, it does appear that it, in combination with the Supreme Court’s back-of-the-hand treatment of other key Federal Circuit precedents, has led the patent appeals court to engage in some soul-searching. Just two weeks ago, it announced, without having been spurred to do so by the parties, that it would rehear an important patentability case, In re Bilski. (See generally here.) It even asked the parties to brief whether a key ruling it rendered in 1998, State Street Bank & Trust v. Financial Signature Group – one of the pivotal ones greenlighting software and business-method patents — was correctly decided.

“There are test cases all over the place,” observes Klemens. Plainly, his timing is propitious.

Correction:  As a commenter points out, in an earlier version I misused the legal term of art “reads on.” Then I did it again in a comment. Regret both errors.

With only a wee bit of provocation, Mark Hurd raised an alarming prospect Tuesday afternoon: He won’t be the CEO of Hewlett-Packard forever. “It’s important to know when your work is done,” he told me during a 50-minute interview in the conference room across from his corner office at HP’s headquarters in Palo Alto, Calif. “CEOs can stay too long.”

Let’s be clear: Hurd isn’t leaving. Not even close. In short, he doesn’t think his work his done. Unlike Meg Whitman, who famously predicted to Fortune that she’d leave eBay (EBAY) after 10 years — an accurate forecast, as it turned out — he isn’t even offering a guess as to the length of his tenure. Indeed, one of his favorite expressions, “We’ve got a lot of work to do here,” illustrates the point: So long as Hurd thinks there’s more to do he’ll be around.

It’s just that the CEO who may be the best big-company operator in the country is all about making uncomfortable observations that so far have ended up being the right call for his company: Market share isn’t the best goal to shoot for; even good businesses need to be examined carefully (especially their cost structures); and strategy and execution trump vision any day of the week.

Hurd has every right to be satisfied. Largely on the strength of its non-U.S. businesses, HP (HPQ) reported Tuesday that it grew revenue 13 percent in its first fiscal quarter, which ended in January. Earnings jumped 31 percent. Even more importantly, the company raised its guidance for the full year, which ends in October. The midpoint of that range, profits of $3.52 per share, or more than $9 billion, represents a 5 percent increase over what Wall Street had been forecasting. In a rare sign of the market perfectly assimilating new data, HP’s shares had jumped about 5 percent in after-hours trading by the time I sat down to talk with Hurd.

What you see after watching Hurd for a few years, as I have, is that part of his style simply isn’t to be satisfied. Despite nearly three years of focusing on improving the selling process at HP, Hurd says the company is still not good enough at sales. “It isn’t in our DNA,” he says, echoing past comments. He announced Tuesday the company had added 2,000 salespeople in the last year alone. HP’s computer business has improved dramatically, but its famous printer business needs to focus more on high-end systems and has done a poor job of forecasting the high-volume inkjet business. The size of its non-U.S. business currently is a source of great strength, but Hurd says HP needs to invest for more aggressively in selling in its home market. “You should think of HP as a company of transformation with a bunch of mini-transformations within that,” he says.

So the edgy dissatisfaction that has made Hurd such a success is still there. (He pointedly told analysts an hour earlier he was “not happy” by the inkjet performance.) At the same time, Hurd is in his element. HP’s stock price has roughly doubled since he took over in March, 2005. Yet at $46, it trades for only about 13 times forecasted 2008 earnings, the low end of HP’s historic range and a discount to the overall market. That’s both frustrating to Hurd and an opportunity. (He nods his head — and initially says nothing — as I make this observation.) “I try not to get into that dialogue,” he says. “Sectors get multiples, not just companies,” he adds, noting that the IT hardware sector currently is out of style.

Hurd loves to talk business, but there are a few topics he won’t touch. I ask, if Dell (DELL) can get its act together will that will hurt HP? Hurd doesn’t talk about the competition. I’m curious to know his perspective on Microsoft’s (MSFT) bid for Yahoo (YHOO). Both are partners, he notes, and leaves it at that. (On Feb. 13 News Corp. (NWS) announced that Hurd is joining its board, undoubtedly making him even more reticent on the subject than he already would have been.) He completely stays away from the subject of his predecessor, Carly Fiorina, even by implication. He boils down the CEO’s responsibilities to three tasks: setting strategy (not offering a vision); aligning operations and modeling ways to execute on the strategy; get the best team to help the CEO. “There are a thousand distractions that keep you from doing that,” he says. But that’s where the focus needs to be.

So far so good.

You can sum up the success of Hewlett-Packard’s (HPQ) solid first-quarter results in one word: Globalization. HP, an iconic Silicon Valley company, long has been a globetrotter. It was early into China, for example, and one reason its painful periods of cost-cutting have been noteable is its sizeable workforce in Europe, where it’s tough to fire people.

Tuesday, though, a big part of HP’s success is the very nature of its non-U.S. sales. The company gets 69% of its sales outside the United States, and it’s reaping the benefits. Revenue grew 13% to $28.5 billion in the quarter that ended in January, an astounding feat for a company that estimates its overall revenues this fiscal year will total as much as $114 billion. Earnings, minus one-time events, grew 31% to $2.8 billion. The company threw off $3.2 billion in cash.

It’s a sign of the times we live in that CEO Mark Hurd is positively giddy about HP’s performance outside the U.S. He told journalists Tuesday afternoon that U.S. revenue growth of 6% wasn’t too shabby but that consumer spending at home isn’t “as robust as we’ve seen in the past.” It’s good news, he said, that HP’s “Americas” business isn’t as big a part of the company’s overall business as it used to be. In a sense, he echoed comments Goldman Sachs (GS) CEO Lloyd Blankfein made at a Fortune conference last October, noting that Goldman has to go where the capital is. HP, in turn, goes where the tech buyers are.

Giddy, by the way, is a good word to describe Hurd Tuesday afternoon. Anyone who knows the HP chief executive knows that he’s about as no-nonsense as they come. That hasn’t changed. But he’s clearly charged up. He rifled through his talking points with reporters — cost cutting, adding sales people (2,000 new ones last year alone), and a diverse product base are the three legs of his operational stool — and then good-naturedly answered quesitons for 15 minutes.

Hurd, who tends to run from the limelight, and, by extension, from journalists, almost seemed to be enjoying himself. Who can blame him?

A few weeks ago, when Oracle (ORCL) reported fine quarterly results, the company said it was no closer to persuading the board of BEA Systems (BEAS) to accept its earlier takeover offer. Clearly, Larry Ellison’s minions don’t quit easily. Instead, Oracle announced Wednesday it would acquire BEA for $8.5 billion, or about $7.2 billion when you subtract out the cash on BEA’s balance sheet.

A few lessons here. Pundits will say that business software increasingly is a game played only by the biggest of the big. That list that includes Oracle, Microsoft (MSFT), SAP (SAP) and three companies long known more for their hardware than software: IBM (IBM), Hewlett-Packard (HPQ) and Sun Microsystems (JAVA), which announced Wednesday a smaller acquisition of the Swedish database software maker MySQL. But, while the giants dominant the business software market, startups continue to flourish, especially of the Web variety. Salesforce.com (CRM) and NetSuite (N) are two good examples. (Though, what’s this? NetSuite’s IPO bubble appears to have sprung a bit of a leak.)

A second lesson: Silicon Valley companies that refuse to adhere to modern financial theory become takeover bait. BEA is a solid cash generator whose growth has slowed. That’s what attracted raider Carl Icahn, who saw value in BEA’s stalled shares. The fact that BEA had more than a billion dollars of cash and a mere $20 million in debt shows that it suffers from a common tech-company disease: a failure to use its balance sheet to reward shareholders. (BEA’s debt-to-equity ratio, according to Yahoo Finance, is a mere 1.4 percent; By comparison, Oracle’s is a far more aggressive 32 percent.)

Here’s the final lesson. Larry Ellison gets what he wants in the end. The seer of Silicon Valley has long been quickly dismissed for picking unneccessary fights with Microsoft earlier in his career and for his flamboyant lifestyle. While Microsoft has been battling Google (GOOG), Oracle trained its balance-sheet guns on the business it knows best, spending $25 billion in the process. The results have been impressive.

I realize only now that the signals that Dell (DELL) still hasn’t gotten its act together were apparent a month ago at the Fortune Global Forum, when CEO Michael Dell took to our stage in New Delhi with my colleague David Kirkpatrick. I tried listening carefully to the conversation. But Dell wasn’t making much sense. He was going on about “simplicity.” Here’s a Dellbabble sampler, courtesy of a writeup in India eNews.

With legacy costs and inflexibility built into the system, we now need to simplify to reduce costs and to create new systems. You can make money by making things complex or you can make money by keeping things simple. We’ve chosen to make money by keeping things simple. There is a large business opportunity to drive costs down by simplifying.

Huh? Dell was speaking as if his company were a startup out to undo all the junk the big companies had sold customers for years. The only problem is that Dell is the company that has sold the aforementioned, er, systems for years. The next day Dell’s grinning mug appeared on the front page of The Economic Times of India under the headline: “Michael Dell keeping IT plain & simple.” Dell used the interview as an opportunity to bash IBM (IBM). As for what Dell actually is doing to regain its balance, not so much.

True, Dell generates $1 billion a quarter in cash. But it has lost the No. 1 PC maker slot to Hewlett-Packard (HPQ), a turnabout I detailed in June. Adding insult to injury, Dell the entrepreneur has been vanquished by Mark Hurd, the manager.

Can Dell get its act together? Sure, but it’s not guaranteed. HP struggled for years to make retailing PCs work; Dell’s a newbie there. But it also will have to start making sense. Dell sucked up to Wall Street by announcing 10% workforce cutbacks. But the Wall Street Journalon Friday quotes CFO Don Carty saying that so far Dell has “seen little net reduction in its overall employee base of about 81,000 people.” (Acquisitions are partly to blame.)

Fortune’s Colin Barr sums things up nicely with this reaction to a Dell statement Thursday that discussed its “strategic priorities” rather than its plan for action. Writes Barr: “Statements like that are never a good sign, because when execs have good news to offer investors they typically don’t hide it behind nonstatements about strategic priorities.”

Back when we all were in India, Dell’s share topped $30 a share. They fell about 10% in after-hours trading Thursday to around $25.

Let’s take a moment to praise the William and Flora Hewlett Foundation for its decision to give $113 million to the University of California at Berkeley for the purpose of endowing 100 chairs for professors. I wrote an article several years ago about how the Hewlett and Packard foundations had deployed different strategies to manage their wealth, nearly all of which derives from the fortunes of their respective founders, William Hewlett and David Packard. Hewlett got the better end of the story because it had diversified far earlier than Packard. As a result, it suffered far less when tech stocks imploded after the bubble burst. (Today, just 6% of the Hewlett Foundation’s $87.3 billion in assets are held in shares of Hewlett-Packard (HPQ) or Agilent (A), an HP spinoff.)

I didn’t write this in my article, but I came away from the experience of researching both foundations completely wowed by the brain power and commitment of its professional staff members. These are people who literally want to change the world, and they go to work — and travel the globe — daily trying to satisfy that mission. With apologies to other noble ways of spending your days, it’s so much more inspirational than building industry standard servers, designing derivative securities or, dare I say, writing magazine articles. These are good people, making a difference. Now, at a time when most people can say only whether their school’s football team won or lost last weekend, the Hewlett Foundation steps up and makes sure that Calfornia’s premier public university can continue to compete for talent with the likes of Stanford and Harvard. And they did this even though their namesakes famously got their start at Stanford, not Berkeley. Way to go, Hewlett Foundation.

(The sun shines recently on Cal, by the way. Its football team is 2-0.)

In his new blog, the famous technologist Marc Andreessen has been sharing with the world what a few of us who’ve known him in his post-Netscape/AOL days have understood for a while now: The guy has got a lot to say about a lot of things. Andreessen is like a rare fish you might see snorkeling or diving. Yes, he swims with the other fishes, but he’s somehow different, more colorful, a standout who isn’t uncomfortable paddling along a bit off to the side.

One of Andreessen’s favorite topics on his blog has been entrepreneurialism and the art of startups. What’s interesting, though, is that it’s only today that the co-founder of Netscape joins the pantheon of truly successful entrepreneurs. Sure, Netscape was a massive financial success. But he was just a kid when it started, and he never was completely in control of its tortured path. Now in his mid-thirties, Andreessen has come into his own. He and his co-founders sold Opsware (OPSW) today to Hewlett-Packard (HPQ) for $1.6 billion, a 38% premium over its closing value on Friday. Andreessen’s stake, according to the company’s most recent proxy, is worth $138 million.

The sale also is a success for a handful of Silicon Valley bold-faced names who aren’t all that well known beyond. People like board members (and noted restaurateurs) Bill Campbell and Mike Homer. And investor Ron Conway. And longtime CEO Ben Horowitz, who, like Homer, worked with Andreessen at Netscape.

The famous co-founder is onto other things, including his new software company Ning, which had an unfortunately timed service outage this morning. But having started a company that had little to do with Netscape, nurtured it through tough times (read his blog entry today for a description), patiently kept at it for eight years or so, and sold successfully to a surging tech behemoth down the road, Andreessen certainly deserves to take a moment and enjoy his success.

Am I being too cornball about a smallish software company cashing out? Perhaps. But for every story of lottery-like bonanzas in Silicon Valley there are ten stories about startups that gut it out for years and never make it. And then there’s one about one that does.

On June 18 lawyers for Hewlett Packard (HPQ) asked a federal judge in Tyler, Texas, to hold a hearing to investigate who leaked an e-mail to Fortune reporter Nicholas Varchaver. A portion of the e-mail, which HP says was protected by a confidentiality order, was quoted in Varchaver’s recent article about the charges and countercharges in a $100 million suit HP filed against former HP vice president Karl Kamb, Jr. (HP has not asked that the reporter be questioned.)

In the last two days, in what may or may not be a related development, Kamb’s two main law firms have sought permission to withdraw from the case. They have each cited Kamb’s nonpayment of bills, and one also mentions a “breakdown of communication.”

The Fortune article, entitled “A Pretext for Revenge,” came out on May 31 (in the issue dated June 11) and is available here. HP’s letter in response to the article is here.

HP sued Kamb and six associates in November 2005, accusing them of misappropriating HP money and trade secrets. The company said they’d tried to launch a flat-screen TV company at the same time Kamb was working on a flat-screen TV project at HP. In response, Kamb has maintained that he told HP about his work for the other company — a startup called byd:sign of Japan (pronounced “by design”) — and that HP also knew what he was doing with the money in question: spying on Dell (DELL) at HP’s behest. Documents made public in the suit suggest that HP did, indeed, somehow obtain detailed information about Dell’s confidential plans to enter the printer business in early 2003. Kamb also alleges that when HP began to suspect him of wrongdoing in the summer of 2005 that its investigators tried to get his private phone records through pretexting-the unsavory practice in which an investigator pretends to be the phone customer himself. Varchaver argues that HP’s much better known pretexting scandal — the one in which HP pretexted directors and journalists in a ham-fisted attempt to plug a board press leak-may not have been as aberrational as HP maintained when the episode came to light in September 2006. (HP denies trying to get Kamb’s records through pretexting.)

In his 5,300-word story about the case, Varchaver quotes from a January 21, 2004 e-mail Kamb sent to a then-HP employee, David Colf, which tends to support his claim that he told HP something about his moonlighting. In it, according to the article, Kamb wrote: “My good friend Katsumi Iizuka (he was founder of Dell Japan) is the bydsign company, in Tokyo. I know him very well … He has provided endless CI [i.e., competitive intelligence] for me regarding Dell, and it’s been a very covert op. I have provided him with much support and advice on his project.”

HP contends that the e-mail, which was unearthed during the discovery process, was covered by a confidentiality order. “No one associated with HP provided the document . . . to Mr. Varchaver,” the motion states. It asks that the court hold a hearing to determine who did, and then to consider holding the transgressor in contempt.

Varchaver declines comment on who showed him the e-mail. His article states that it is based on “interviews with 20 lawyers or participants in Kamb’s saga,” including both Colf and Kamb.

Attached to HP’s motion was the e-mail correspondence between an HP attorney and two defense lawyers, including Kamb’s. David Alexander of McDermott Will & Emery, who represents a different defendant in the case, told the HP attorney that he didn’t know who had given the e-mail to Varchaver, and that whatever knowledge his client might have was protected by the attorney client privilege. He also parried, “Maybe you should have one of H-P’s gumshoes figure out who gave it to Virchaver [sic] . . . just don’t use any ‘pretexting’ to do so. Have a nice weekend.’”

An attorney for Kamb and certain other co-defendants, Will Ellerman of Jackson Walker in Dallas, told the HP lawyer that he didn’t know who turned it over and that “my clients’ substantive position on this is that they did not provide the document . . . nor did they direct anyone to provide the document to anyone at Fortune.” Ellerman also posed, in turn, a question to Hine: “Why did HP fail to include the document in question in its production, despite its obvious relevance?”

Though the HP attorney did not respond at the time, an HP spokesperson says in an email for this article that HP didn’t possess a copy of the email for two reasons. “First,” he writes, “when the defendants in this lawsuit were terminated from HP they attempted to erase data from the hard drives of their computers and, unfortunately, succeeded to a large extent.” (Kamb disputes this claim.) Second, the HP spokesman continues, since the lawsuit began almost two years after the e-mail was generated, any copies that might have existed on other HP computers “had been deleted in the ordinary course of business.”

As for why HP filed the motion, the spokesperson writes that every attorney has “an affirmative ethical obligation to ensure that all parties comply with the Court’s orders” and that HP was merely fulfilling that duty.

On June 27, Ellerman and his firm, Dallas-based Jackson Walker, filed a request to withdraw from the case, citing Kamb’s failure to pay fees already owed, and the firm’s facing a new round of expensive depositions in July. Then, yesterday, Kamb’s other law firm, Las Vegas’s Hale Lane Peek Dennison and Howard, moved to withdraw on the same grounds, while also citing a “breakdown in communication.” Only Kamb’s local Tyler, Texas counsel, has not asked to be relieved.

U.S. District Judge Michael Schneider has not yet ruled on any of the motions.

There’s a new parlor game in tech circles: Analyzing Dell’s (DELL) spectacular fall from grace and Hewlett-Packard’s (HPQ) seemingly miraculous rejuvenation. Like any important history, revisionism abounds. For starters, it’s as if Dell just started re-thinking retail. In fact, it has been dabbling with mall kiosks for years. A sensitive sub-issue is: how much credit Carly Fiorina deserves for HP’s turnaround, which Mark Hurd largely has overseen. In a review today of a new book by journalist Michael Malone about HP’s founders, Wall Street Journal columnist Lee Gomes contributes these trenchant points:

Mr. Malone’s exuberance reaches its climax toward the end of “Bill & Dave.” First he describes the rise and fall of Ms. Fiorina, the CEO hired in 1999 to give a push to the company’s lagging stock price. Mr. Malone portrays her as a self-promoting harridan who is heedless of the H-P Way and drags the company into calamitous business deals, notably, he claims, the Compaq acquisition. Her successor, Mark Hurd, by contrast, is the founders’ second coming, bringing profits and tranquility back to their kingdom.

But this is a cartoon version of events. If H-P is now back in the game, a certain amount of the credit goes to the dirty work done on Ms. Fiorina’s watch, like the big staff cuts. And Mr. Hurd has himself continued the dismantling of some of the relics of the Bill-and-Dave years, including their generous pension plan.

In short, easy answers are hard to come by. Another WSJ piece this week (it’s free here) suggests that HP’s shift to retail is what enabled it to take share from Dell. That’s true. But it’s also true that HP had been pushing retail for a while (it wasn’t very good at selling directly to consumers, Dell’s strength) and benefited tremendously from the shift in interest from desktops to notebooks. Consumers overwhelmingly prefer to buy notebooks at retail. (Also see David Whitford’s recent take on Dell in Fortune.)

A final point. Perhaps Dell’s biggest mistake was setting artificial revenue goals, first of $60 billion in 2002 and then $80 billion in 2005. Dell had revenue of $57 billion for  its  most recent fiscal year, so it’s still got a ways to go. Goals are fine. But setting them too aggressively can get a company making the wrong decisions for the wrong reasons.

Hewlett Packard (HPQ) reached a settlement with the Securities and Exchange Commission yesterday in a dispute that arose from HP’s now infamous, runaway leak probe of 2005 and 2006. The SEC found that HP had failed to properly disclose the reasons for board member Thomas Perkins’s abrupt resignation in May 2006, but it imposed no fine. HP admitted no wrongdoing, and agreed to “cease and desist” from such failures to disclose in the future. (The SEC filing is available here. )

The action signals to companies what is expected of them in the future. It also amounts to a mild, implicit rebuke of HP’s then general counsel Ann Baskins, who resigned last September, and the board’s then outside counsel, Larry Sonsini, of Wilson Sonsini Goodrich & Rosati, who presumably advised the company that no such disclosure was legally mandated. (The Wilson Sonsini firm declined comment; a comment from Baskins’s counsel was just solicited, and will be added to this post when received.)
Perkins resigned on May 18, 2006, when the head of HP’s audit committee revealed to the full board the identity of the board member who had been found to be the source of certain press leaks, George Keyworth, and the full board asked him to resign. Keyworth refused to resign, but Perkins immediately quit. HP then disclosed Perkins’s resignation, but not the reasons for it. The law requires that reasons be disclosed when a director resigns because of “a disagreement with the company . . . relating to the company’s operations, policies, or practices.”

Though Perkins later contended (and it was widely reported) that he had resigned due to his outrage over the methods HP had employed during its probe into the source of leaks — methods that, it was ultimately determined, included surveillance of board members and, most notoriously, tricking phone companies into revealing private phone records of directors and journalists (a practice now known as “pretexting”) — other board members, including chairman Patricia Dunn, said that the methodology of the probe hadn’t come up at the meeting. They said that Perkins had complained at the time only that Dunn had violated an agreement he said she’d had with him that the identity of the leaker, if determined, would not be disclosed to the full board, and that the leaker would only be asked to pledge not to do it again. (Dunn denied having ever had such an agreement with Perkins, and said she had been advised by counsel that such an agreement would be improper.) At the board meeting, Perkins protested that Dunn had “betrayed” him by breaching their agreement, according to Dunn’s later accounts before Congress and elsewhere.

In an Feb. 19, 2007, article in The New Yorker, available here, James Stewart reports on a conversation that Perkins and HP outside counsel Sonsini, who had not been present at the board meeting, had subsequently.

Shortly after Perkins returned to his office in San Francisco, Larry Sonsini, the outside counsel, called to discuss the resignation. Perkins had worked with Sonsini on various matters for forty years, and liked and trusted him.

“I hear you and Pattie had a real set-to,” Sonsini began. “Have you really resigned?”

“Yes, and I’m not going back,” Perkins answered.

A post-Enron reform requires that resignations by directors be reported to the S.E.C., and if the resignation stems from any disagreement with the company or the board the reasons must also be disclosed. Sonsini mentioned this, and added, “If it’s a personal matter, it doesn’t need to be disclosed. How would you characterize this? Is the dispute between you and the company?”

“No. It’s between me and Pattie. I can’t breathe the same air with that woman.”

“What should we say in the press release?”

“Just say I resigned. But please—don’t say I resigned to spend more time with my children.”

After this exchange, HP decided only to disclose Perkins’s resignation, providing no statement of reasons. (Stewart’s account is consistent with a less detailed account Sonsini gave before a U.S. House of Representatives subcommittee in September.)

In its cease and desist order, issued yesterday, the SEC makes no reference to Perkins’s subsequent claims that the methodology of the leak probe had played a role in his decision to resign. It finds, nonetheless, that disclosure was still required. In yesterday’s order the SEC writes that Perkins’s resignation was prompted by two board actions: “(1) the decision to present the leak investigation findings to the full Board; and (2) the decision by majority vote of the Board of Directors to ask the director identified in the leak investigation to resign.” The commission then concludes, “Mr. Perkins’ disagreement related to important corporate governance matters and HP policies regarding handling sensitive information, and thus constituted a disagreement over HP’s operations, policies or practices.”

Perkins’s counsel, issued the following statement on behalf of Perkins: “I am delighted that the HP boardroom drama is now satisfactorily concluded. Fortunately, it was never about hp itself — the company is going from strength to strength under chairman and CEO Mark Hurd’s leadership. I had the greatest training possible in formerly reporting directly to the two founders, and more recently the honor of serving on the board. I am proud of HP as the world’s biggest and best high-tech enterprise.”
My own earlier analysis of the disclosure issue, which the SEC obviously did not share, is available as a comment to Mark Obbie’s legal journalism blog here. A December 2006 American Lawyer article, entitled “Where Will the Troubles End for Sonsini and HP?,” which viewed HP’s and Sonsini’s handling of the disclosure issue as egregious, is here. A November 2006 Fortune magazine feature story profiling Sonsini (by me) is available here.