In the BMC case, a federal appeals court reverses a $1.6 billion decision against IBM

BMC case: In response to a ruling by a federal appeals court, IBM was able to successfully reverse a $1.6 billion verdict in favor of BMC Software. Allegations that IBM had inappropriately replaced BMC’s mainframe software at AT&T with its own led to the original decision.

The 5th US Circuit Court of Appeals in New Orleans declared that the culpability determination made by a lower court judge was incorrect. Writing on behalf of a three-judge panel, US Circuit Judge Edith Jones declared that BMC had lost to IBM via fair competition and that AT&T’s choice to switch to IBM software was autonomous.

While an IBM spokeswoman thanked the court for its ruling and said that the business had operated in good faith throughout the engagement, a BMC representative chose not to respond.

Despite not being a party to the lawsuit, AT&T has not yet offered a statement.

BMC is a Houston-based company that specializes in proprietary mainframe software solutions. As per the verdict, IBM was granted permission to manage and administer mainframes that were running BMC software, as long as it didn’t swap customers’ software with IBM’s.

IBM was accused of breaking this agreement when AT&T switched to using IBM software for mainframe operations, according to the complaint, which was filed in federal court in Houston.

The current judgment reverses a 2022 finding by U.S. District Judge Gray Miller, who cited IBM’s purported covert agreement to replace BMC’s software at AT&T during contract talks in 2015 and ordered IBM to pay $1.6 billion in damages to BMC.