International Business Machines Corp. Settles Trade Secrets Dispute

Cravath defended International Business Machines Corp. (“IBM”) in an action in the U.S. District Court for the Eastern District of Michigan alleging that IBM misappropriated Compuware’s trade secrets in its mainframe software applications, File-AID and Abend-AID, and used those secrets to create two of IBM’s mainframe software applications, File Manager and Fault Analyzer. Compuware also accused IBM of violating antitrust laws by tying the sale of certain products, including high-end mainframe computers and database programs, to the sale of mainframe software that competes with Compuware’s products. During cross examination, we obtained testimony from Compuware’s chief technical expert that, after approximately 15,000 hours of work, she and her staff had identified only a single line out of 26 million lines of code that was identical among the programs. During the sixth week of a seven-week jury trial we secured a settlement on terms favorable to IBM.