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Software Thievery Claimed: Compuware Says IBM Tried to Kill It

February 17, 2005

By Jewel Gopwani
Free Press Business Writer

After three years of legal wrangling, a jury is to decide if Armonk, N.Y.-based IBM stole information from Compuware to develop its own software to compete with Compuware and force the software on Compuware customers with deep discounts.

For damages, Compuware is asking for millions of dollars it considers lost profits. If the two sides had negotiated a licensing agreement for the software, Compuware argues, the deal would have been worth $500 million.

"This case is real simple. This is about theft of technology worth millions and millions of dollars," Compuware attorney Daniel Johnson told the jury. "This is about IBM, one of the largest companies in the world, going out and embarking on a plan—not an accident—a plan to kill Compuware." IBM's goal was to crush Compuware, Johnson said, referring to an IBM document that dubbed the new product releases as "Compuware Killer."

"They called it a plan to displace Compuware's most successful products," said Johnson, who also introduced the jury to Compuware Chairman and CEO Peter Karmanos Jr., whom he described as starting the company with a refund check from the IRS in the early 1970s. IBM tied the sale of its software to its hardware, Johnson said, and in some cases charged nothing. The strategy, he said, "caused millions and millions of dollars in business to shift from Compuware to IBM."

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