Judge orders IBM to pay software firm $1.6 billion in AT&T contract dispute

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RESEARCH TRIANGLE PARK – A federal judge ruled that IBM must pay $1.6 billion in damages to BMC Software Inc.

U.S. District Judge Gray Miller’s decision came after a seven-day non-jury trial held in March.

Judge Miller rejected IBM’s claim that the company “acquired the mainframe software account of one of BMC’s major customers, AT&T Corp., fairly and squarely,” according to Bloomberg reports.

The Caseknown as BMC Software Inc v. International Business Machines Corp, US District Court for the Southern District of Texas, No. 4:17-cv-02254, is described in a court document as “a long-running business dispute in which the parties allege breaches of contract and other wrongful conduct related to the parties’ Master License Agreement (MLA) and associated Outsourcing Attachments (OA) and their respective services provided to AT&T Non-Party.

Judge Miller’s decision fell on Monday.

According reports from Reuters, the ruling was that, by fraud, IBM convinced BMC Software “to enter into a contract that allowed IBM” to exercise rights without paying for them, obtain other contractual benefits, and ultimately acquire the one of BMC’s main customers”.

Reuters also noted that IBM said in a statement that the decision was “not supported by facts and law” and that the company intended to appeal the decision.

Part of a decades-old, billion-dollar lawsuit between IBM and Linux was settled last year.

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