IBM settles court case with Compuware

IBM has agreed to pay $400m (£222m) to settle a legal battle with Compuware.

IBM has agreed to pay $400m (£222m) to settle a legal battle with Compuware.

The court case got under way last month, with Compuware accusing IBM of stealing its mainframe technology. The pair have now settled out of court.

In a statement, IBM said, "IBM has agreed to license $140m of Compuware software and purchase $260m of Compuware services over the next four years. IBM and Compuware have also entered into a patent cross-licence agreement." 

IBM said the settlement would not have a material impact on its first-quarter 2005 earnings.

Compuware went to its lawyers in March 2002 on the back of fierce competition with IBM in the mainframe market and accused the company of stealing a file management program and a mainframe troubleshooting system for its own solutions.

IBM denied the charge and countersued, accusing Compuware of stealing some of its own mainframe patents. IBM’s claim was due to be dealt with in a separate hearing, but as part of the settlement, this claim has been shelved.

While Compuware is much smaller than IBM, it is doing well in the market. For its last reported quarter it almost doubled its net profits to over £23m on the back of a 23% jump in licence sales and a 14% increase in professional services.

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