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IBM Software The Courts

IBM Must Pay $1.6 Billion in BMC Case, Federal Judge Orders (bloomberg.com) 23

Posted by msmash from the moving-forward dept.
IBM must pay $1.6 billion to BMC Software for swapping in its own software while servicing their mutual client, a Houston federal judge ruled. From a report: US District Judge Gray Miller, after a seven-day non-jury trial, rejected IBM's claim that their mutual client AT&T opted to switch software products on its own and ruled that IBM's role in the decision to dump BMC "smacked of intentional wrongdoing." For more than a decade, IBM serviced AT&T's mainframe computers, which ran on rival BMC's software products. IBM and BMC have long operated under a carefully negotiated agreement that forbids IBM from encouraging mutual clients, like AT&T, to switch to IBM's competing software product line. BMC sued IBM in 2017 claiming its rival intended to breach their agreement and poach AT&T's software business when the two companies renewed their power-sharing deal in 2015. IBM countered that AT&T dumped BMC's products and jumped to IBM for its own reasons, which IBM claims is fair game under its BMC agreement.
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IBM Must Pay $1.6 Billion in BMC Case, Federal Judge Orders More

IBM Must Pay $1.6 Billion in BMC Case, Federal Judge Orders

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  • Poor legal strategy (Score:2, Insightful)

    by Anonymous Coward

    IBM should have tried the "there is no such thing as data" defense. If there is no data then how can there be data processing? I submit that there *are* no software products for AT&T to dump.

  • Why not ask the client? (Score:3)

    by King_TJ ( 85913 ) on Tuesday May 31, 2022 @12:04PM (#62580382) Journal

    It sounds like this entire lawsuit hinged on whether AT&T willingly wanted to switch software vendors to IBM or not.

    If they said "No... we never asked them to switch software from BMC to their own stuff.", then game-over for IBM. They lose.

    • Re: (Score:1)

      by splutty ( 43475 )

      Unfortunately they signed an NDA that they're not allowed to say that.

      • IANAL, but I would have thought legal Discovery overruled an NDA.

        • Re: (Score:2, Interesting)

          by Virtucon ( 127420 )

          Only in criminal matters and only with the Judge's consent. Since AT&T isn't a party to the litigation their NDA agreements with IBM and BMC would still be maintained.

      • Re:Why not ask the client? (Score:4, Interesting)

        by Anubis IV ( 1279820 ) on Tuesday May 31, 2022 @12:27PM (#62580494)

        Unfortunately they signed an NDA that they're not allowed to say that.

        Actually, reps from AT&T testified in this case with regards to this exact issue and said exactly that, so, no, their NDAs did not preclude them from doing what you said.

        IANAL, but every resource I can find agrees that subpoenas trump NDAs. Any NDA that suggests otherwise is almost certainly incapable of being enforced. Some NDAs include provisions requiring that you notify the other party of the subpoena so that they have the opportunity to object to it should they so choose, but an NDA cannot preclude you from testifying as part of a deposition or other court proceeding. Trying to do so will likely find you in contempt of court.

        • This is, I think, an example of the general rule that contracts contrary to public policy are not enforceable.

      • Re: (Score:2)

        by Z00L00K ( 682162 )

        Not all NDAs are worth the paper they are written on.

      • NDAs do not override court orders. If subpoenaed to testify, you testify. Or you go to jail for contempt.

    • Re:Why not ask the client? (Score:5, Insightful)

      by UnknowingFool ( 672806 ) on Tuesday May 31, 2022 @12:33PM (#62580530)
      The case was not about if ATT was "willing" to switch. The case is about whether IBM breached their agreement with BMC by pursuing and encouraging ATT to switch.
      • AT&T: "BMC's software won't do what we want it to."

        IBM: "Our Software can do that, but we're not supposed to encourage you to switch."

        AT&T: ....
        • Can you cite where ATT said that? According to the summary, "intentional wrongdoing" is how the judge described IBM's actions.

      • Only lesson I can really take away from all this is that it's not worth it trying to strike a deal with a competitor to make money supporting their product when you also sell something similar!

        I mean, IBM was essentially stuck here, because if AT&T decided they wanted to switch to IBM's software and IBM wasn't actively fighting them NOT to do it (and documenting all of that!)? BMC could run to court with this claim that they "encouraged" it.

        BMC would have to have some evidence - but it's pretty likely i

  • For those who never worked in the mainframe arena, there are reasons that BMC and others came into existence. Management and other key software elements weren't that good in terms of IBM's offerings. The sad reality is that AT&T could have saved themselves 100s of millions by ditching the tightly coupled technology that creates this kind of lock-in strategy.

  • IBM shady (Score:3)

    by awwshit ( 6214476 ) on Tuesday May 31, 2022 @12:32PM (#62580528)

    IBM? Shady business practices? Who would have guessed?

    • I worked for a company that had multiple divisions, one bought a used System 36 from a retailer. IBM refused to certify the IBM software running on the system until an IBM hardware installation audit was performed. This effectively wiped out the incentive of buying a used System 36 for price savings.

      We started encouraging that division to come over to the dark side of VMS and Unix systems other divisions were running. After a year that System 36 was retired and our corporate directive was no more IBM anythi

      • I once worked at an insurance company where the CTO was previously their IBM sales person. I think he pretty much made a job for himself and took over. It was impossible to not buy IBM after that.

  • Why is it? (Score:5, Insightful)

    by RitchCraft ( 6454710 ) on Tuesday May 31, 2022 @12:48PM (#62580604)
    Why does it seem that when one business screws another business the fines and rewards are huge, but when businesses screw the general public the fines are paltry and the public *might* receive a few dollars for compensation with the only real winners being the lawyers?

  • That's some unholy trio of companies with crappy product right there...

  • Judge made the wrong decision (Score:1)

    by Anonymous Coward
    BMC and IBM participated in COLLUSION, promising not to poach each other's customers in a non-competitive agreement. Judge should have thrown out the case, fined them both, and made them agree to decades-long monitoring and auditing requirements.

    • Re: (Score:2)

      by Luthair ( 847766 )
      While I don’t know whether the trial judge had that power, but it definitely seems like a case of IBM and BMC operating as a cartel.

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