US District Judge Gray Miller has found that IBM has resorted to violations by moving AT&T from BMC mainframe software to its own
IBM CHQ in Armonk, NY, USA. (Credit: Treesmittenex/Wikipedia)
A US federal court judge has ordered IBM to pay $1.6bn to Houston-based IT firm BMC Software in a final judgement for a five-year old case.
US District Judge Gray Miller has found that IBM has resorted to violations by moving AT&T from BMC mainframe software to its own.
As per the judgement, BMC is entitled to receive $717m for lost licensing fees, and $168m interest on it. IBM will also have to pay another $717m in punitive damages.
In 2007, BMC signed a master purchase agreement with AT&T to offer mainframe software services. At that time, IBM was a mainframe outsourcer for the telecommunications company.
IBM and BMC entered into a contract in 2008, defining the way the two companies would work for mutual clients.
Later, in 2015, an amendment was made to the contract that prevented IBM from shifting mutual clients to its software, DCD reported.
AT&T launched an internal project in the same year to move to IBM software.
Miller said: “The court finds by clear and convincing evidence that IBM fraudulently induced BMC into entering the 2015 OA so that it could exercise rights without paying for them, secure other contractual benefits, and ultimately acquire one of BMC’s core customers.”
However, IBM was found to have not violated other terms of its contract with BMC.
In a statement, IBM said that it intends to appeal the judgment.
In April this year, the company has posted a net income of $733m for the first quarter of 2022 (Q1 2022) that ended 31 March 2022. The net income decreased by 23% compared to $955m in the same quarter of the previous year.
IBM’s software unit that includes hybrid platform and solutions and transaction processing earned revenues of $5.8bn in the quarter, which is a year-over-year (YoY) increase of 12.3%,