US Supreme Court Rejects IBM’s $1.6 Billion Contract Win Against BMC Software
Earlier, the Court of Appeals had overturned a judgment;
US Supreme Court Rejects IBM’s $1.6 Billion Contract Win Against BMC Software
Earlier, the Court of Appeals had overturned a judgment
The U.S. Supreme Court has turned down the $1.6 billion contract dispute between IBM and BMC Software.
Earlier, the Court of Appeals for the Fifth Circuit overturned a judgment in BMC's favor. It noted that AT&T independently chose to replace its mainframe software with that of IBM. It stated that BMC "lost out to IBM fair and square."
Houston-based BMC develops and licenses proprietary mainframe software products.
The company had an agreement with IBM that allowed the latter to maintain mainframes running BMC software with a ‘non-displacement’ provision. It limited IBM from switching BMC clients' software to its own.
AT&T hired IBM to manage its mainframe operations.
It led BMC to file a lawsuit in Houston federal court accusing IBM of breaching the contract when AT&T abandoned its software for IBM.
In 2022, District Judge Gray Miller held that IBM owed BMC $1.6 billion in damages for breaking the agreement. He said that IBM secretly agreed to replace BMC's software at AT&T in 2015, when it negotiated the non-displacement provision.
However, in April last, the Court of Appeals overturned the decision. It observed that AT&T chose to replace its mainframe software independently of IBM's influence.
BMC argued before the Supreme Court that the decision of the Court of Appeals would "do lasting damage to businesses throughout the Fifth Circuit, especially in the technology space, where license restrictions are common and necessary."
IBM requested the judges to deny BMC's petition and "bring BMC's quest to revive a windfall judgment to a definitive end."
