(Bloomberg) -- International Business Machines Corp. must pay $1.6 billion to BMC Software Inc. for swapping in its own software while servicing their mutual client, a Houston federal judge ruled.
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US District Judge Gray Miller, after a seven-day non-jury trial, rejected IBM’s claim that their mutual client AT&T Corp. 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.
“This verdict is entirely unsupported by fact and law, and IBM intends to pursue complete reversal on appeal,” IBM said in a statement. “IBM acted in good faith in every respect in this engagement. The decision to remove BMC Software technology from its mainframes rested solely with AT&T, as was recognized by the court and confirmed in testimony from AT&T representatives admitted at trial.”
BMC didn’t immediately respond to a message seeking comment on the order.
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