International Business Machines has sued a software developer it has worked with for two decades, claiming that the collaborator copied crucial software for its own main frame computer programs.
IBM accused Micro Focus International of England and Micro Focus (US) Inc. of Rockville, Maryland of copyright infringement in a complaint filed last month in U.S. District Court in White Plains.
“IBM cannot stand idle,” the complaint states, while a collaborator is “creating a derivative work and then promoting and profiting from that pirated software.”
Micro Focus says it will “robustly defend our intellectual property,” in a statement posted on its website, and “we look forward to addressing what we consider to be baseless allegations.”
Micro Focus is an enterprise software provider that books about $3 billion in revenue annually and is valued at $6 billion in a deal by OpenText to acquire the company early next year.
IBM, based in Armonk, booked $60.5 billion in the past year and is worth about $133 billion by market capitalization.
IBM routinely collaborates with software developers such as Micro Focus, according to the complaint, to promote productivity, innovation and reduced costs.
IBM gives collaborators discounts on software and products, and the collaborators promise not to copy or reverse engineer IBM’s work.
The dispute involves IBM’s latest mainframe system, the z16 server, that enables users to run multiple operating systems and access various web services.
IBM claims that a new Micro Focus software suite uses strikingly similar architecture and designs.
“There is no way such extensive similarity could arise,” the complaint states, “as a result of coincidence.”
Micro Focus did not have to copy IBM’s computer programs, according to the complaint, because there are a lot of ways it could have created the same features.
IBM claims Micro Focus deprived it of revenues by distributing software to customers such as Citi Bank, Deutsche Bank USA, McGraw Hill Education, and the New York State Division of Criminal Justice.
IBM terminated Micro Focus’s development agreement as of Aug. 31.
Now IBM is asking the court to find that Micro Focus infringed copyrights and breached the collaboration deal; to stop the company from distributing the allegedly pirated computer programs; to order a full accounting of profits received from the programs; and to direct the company to compensate IBM for lost profits and expenses incurred in investigating misconduct.
IBM is represented by Kirkland & Ellis attorneys Dale M. Cendali, Joshua L. Simmons and James J. Lomeo.
