Complaint For Copyright Infringement, Misappropriation Of Trade

DET_C\476962.30

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN

COMPUWARE CORPORATION,a Michigan corporation,

Plaintiff, Case No. 02-70906

v. Hon. George Caram Steeh Magistrate Judge Capel

INTERNATIONAL BUSINESSMACHINES CORPORATION,a Delaware corporation,

Defendant.

DANIEL JOHNSON (CSB No. 57,409)STUART MEYER (CSB No. 136,394)FENWICK & WEST LLPTwo Palo Alto SquarePalo Alto, CA 94306Telephone: (650) 494-0600Facsimile: (650) 494-1417Attorneys for Plaintiff

DAVID A. ETTINGER (P26537)HONIGMAN MILLER SCHWARTZ ANDCOHN, LLP2290 First National Building660 Woodward AvenueDetroit, MI 48226-3583Telephone: (313) 465-7368Facsimile: (313) 465-7369Attorneys for Plaintiff

COMPLAINT FOR COPYRIGHT INFRINGEMENT, MISAPPROPRIATION OFTRADE SECRETS, INTENTIONAL INTERFERENCE WITH CONTRACTUAL

RELATIONS, UNLAWFUL TYING, MONOPOLY LEVERAGING, ATTEMPTEDMONOPOLIZATION, TORTIOUS INTERFERENCE WITH BUSINESS

EXPECTANCY, UNFAIR COMPETITION AND UNFAIR TRADE PRACTICES

DEMAND FOR JURY TRIAL

http://www.findlaw.com/

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Now comes Plaintiff Compuware Corporation (“Compuware”), for its claims for relief

against Defendant International Business Machines Corporation (“IBM”), and alleges as follows:

PRELIMINARY STATEMENT

1. This complaint is being filed to challenge unlawful copyright infringement and

anticompetitive behavior by IBM directed at Compuware and other firms selling software

products which aid companies in their mainframe computer testing, data management and fault

management (the “mainframe software tools.”). IBM has copied and misappropriated portions

of Compuware’s mainframe software tools, and wrongfully used Compuware’s technology to

develop competing products, including, among other things, File Manager. IBM’s wrongful

conduct is depriving Compuware of goodwill, revenues, and profits from the sale of its tools.

2. IBM is also using its monopoly power in the sale of mainframe computers and

related software to subvert competition on the merits. In particular, IBM is (a) denying critical

information to Compuware and others in an effort to undermine their development efforts, (b)

tying the licensing of its monopoly software to mainframe software tools licensed in competition

with Compuware and other ISVs so that customers are forced to obtain mainframe software tools

from IBM, and (c) using its position operating the information technology departments of

thousands of major corporations to steer their purchases of the mainframe software tools. IBM is

thus using its monopoly power to harm competition and interfere with free customer choice and

suppress product innovation. This threatens to cause great harm to the thousands of large

corporations that use mainframe software tools to better run their computer systems and develop

new computer applications.

3. This action arises under the Copyright Act, 17 U.S.C. §§ 101, et seq., and for

misappropriation of trade secrets and intentional interference with contractual relations, unlawful


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tying, monopoly leveraging, denial of an essential facility and attempted monopolization under

the Sherman Act, 15 U.S.C. §§ 1 & 2, tortious interference with business expectancy, unfair

competition, and unfair trade practices.

JURISDICTION AND VENUE

4. This Court has jurisdiction under 15 U.S.C. §§ 4, 15 and 26, 28 U.S.C. §§ 1331,

1337, 1338(a) and 1338(b) and supplemental jurisdiction under 28 U.S.C. § 1367. This Court

also has subject matter jurisdiction under 28 U.S.C. § 1332 because plaintiff Compuware is

incorporated and has its principal place of business in Michigan, defendant IBM is incorporated

in Delaware and has its principal place of business in New York, and the amount in controversy

exceeds $75,000, exclusive of interests and costs.

5. Venue is proper in this district under 28 U.S.C. §§ 1391(b), (c) and 1400(a) and

15 U.S.C. §§ 15 and 22. IBM is found within this judicial district, transacts substantial business

within this judicial district, and has agents in this judicial district. IBM has sold substantial

volumes of products contained in the relevant market into this judicial district and maintains

offices in this judicial district. This Court has personal jurisdiction over defendant IBM because

IBM transacts business within this district and the State of Michigan.

PARTIES

6. Plaintiff Compuware is a Michigan corporation with its principal place of

business at 31440 Northwestern Highway, Farmington Hills, Michigan.

7. Compuware is informed and believes and thereon alleges that defendant IBM is a

Delaware corporation with its principal place of business at Armonk, New York.

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INTERSTATE COMMERCE

8. Compuware and IBM are substantially engaged in interstate and foreign

commerce and in activities substantially affecting interstate and foreign commerce, selling their

products and services to purchasers located throughout the United States and the world.

Compuware and IBM have also purchased substantial products and services in interstate

commerce which are used in the sale and/or licensing of the products at issue in this complaint.

9. As alleged below, Compuware is informed and believes that IBM has engaged in

copyright infringement and antitrust violations, and related causes of this action, that have been

within the flow of, and have substantially affected, interstate and foreign trade and commerce.

IBM’s practices at issue here are being undertaken as part of a global strategy directed by, and

with the benefit ultimately inuring to, IBM in the United States. If not enjoined, IBM’s practices

will impair the flow of interstate and foreign commerce by reducing the quality of, and

increasing the price of, the products sold in the mainframe software tools markets described

below and otherwise restraining competition as further described below. The effect of these

practices on Compuware is worldwide, with the ultimate injury inuring to Compuware in the

United States.

GENERAL ALLEGATIONS

10. As explained in more detail below, IBM dominates the mainframe market and

many of the markets involving software products that are needed to serve the mainframe

“environment.” Independent Software Vendors (ISVs) such as Compuware develop and provide

software “tools” that work in this environment. Customers, in order to maintain and use their

mainframe computers develop programs (software tools) to diagnose and eliminate any software

or hardware problems. These software tools work with IBM’s hardware and software. ISVs

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developing these tools must have access to IBM technical information in order to develop and

service customers in the IBM environment.

11. Much of the hardware and software needed to operate in this IBM environment is

developed by IBM. Further, IBM has its own division, IBM Global Services, that operates the

computer systems of, and performs programming for, thousands of corporations, making

decisions for many of them as to the software tools they will purchase. For these reasons, it is

impossible for a third party to supply mainframe software without the cooperation of IBM.

Mainframe Market

12. One relevant market in this case involves “high end” mainframe computers.

These computers are large, powerful computers used for processing very high volumes of

information. Most of the world’s largest corporations and government entities rely on these

mainframe computers for their high volume and mission-critical data processing needs, including

matters such as billing, accounting, order entry, record keeping and transaction processing.

There is no reasonable substitute for mainframe computers for these functions, since no other

type of computer can process the required information as rapidly, reliably and economically.

13. The vast majority of mainframe computers have been manufactured by and sold

by IBM, including, particularly, its z Series 900 and S/390 systems. In excess of 85% of high

end mainframe computers currently being utilized and maintained worldwide are IBM

computers.

14. IBM’s two most significant mainframe competitors, Amdahl and Hitachi, have

exited the mainframe market within the last three years. IBM’s remaining mainframe

competitors sell relatively few mainframes, primarily to particular geographic niches (Bull in

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France, Fujitsu and NEC in Japan, and FSC in Germany) or to particular kinds of customers

(Unisys). IBM does not face any across the board competition for mainframe customers.

15. Entry into the manufacture and sale of mainframe computers is extremely

difficult. Development of a new mainframe computer takes many years and requires a very

substantial volume of sales to justify the investment. Customer acceptance of such products is

extremely slow, since mainframe computers are used for many mission-critical functions, and no

customer would purchase a mainframe computer if there were any doubt about its reliability.

Moreover, any new mainframe which did not utilize an IBM operating system could not succeed

unless customers were willing to switch operating systems, which would involve substantial

additional barriers, as explained below. There has been no new entry into the mainframe market

for at least 20 years. For all these reasons, IBM possesses monopoly power in the high end

mainframe market.

Operating System Market

16. Another relevant market in this case is the market for operating systems for high

end mainframe computers. The operating system is a software system that controls the

operational resources of the computer and allows application software to run on the computer.

Virtually all operating systems compatible with IBM mainframe computers are sold by IBM.

The most common operating systems in use on large mainframe computers are IBM’s OS/390

and z/OS operating systems with thousands of customers worldwide.

17. As with computer hardware, a new operating system for a mainframe is

extraordinarily complex and takes many years to develop. Because of the mission-critical nature

of the work performed on IBM mainframes, it is extremely unlikely that a customer would

choose an operating system that has not been thoroughly developed, tested and proven over

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many years. Additionally, customers are extremely reluctant to utilize an operating system that

has not been developed by IBM, because of concerns that such a system might not be fully

effective or would be incompatible with present or future IBM mainframe computers.

18. Even more importantly, a new competitor would be very unlikely to be able to

match the “applications” advantages of IBM operating systems. Thousands of software products

(referred to as “application software”) have been developed by ISVs to work on the IBM

operating systems. These products make programming on the IBM mainframe much easier and

more efficient. For any new operating system to be considered a reasonable substitute for IBM’s

systems, an equally wide variety of comparable application software would need to be developed

to make the use of the system competitive with IBM’s products. This would be extremely

unlikely, since any new operating system would not possess the volume of business that would

provide an incentive for ISVs to write many application programs for use on the new system.

19. An even greater application advantage arises from the “customized” applications

developed to work on the IBM operating systems by the firms using those systems. Purchasers

would not switch from the use of mainframes and mainframe operating systems due to small but

significant changes in price (and have not done so) because of their very substantial investments

in the training of their own programmers on the mainframe operating systems and the millions of

dollars invested in customized computer programs that work on these operating systems. A firm

would have to duplicate those multimillion dollar investments if it chose to use a new operating

system and the computer that would run it.

20. For these reasons, entry into the production and sale of operating systems for use

on high end mainframe computers is extremely difficult. There has been no new entry into the

mainframe operating system market for at least 10 years. Because of its entrenched market

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position and disproportionate market share, IBM possesses monopoly power in the sale of

operating systems for use on high end mainframe computers.

Compilers and Utilities Software

21. In addition to operating systems, IBM provides other software used by large

numbers of the major corporations utilizing mainframe computers. This software includes

products permitting use of the COBOL, C/C++ and PL/I computer languages; database

management; and high volume online transaction processing software. Each of these kinds of

software represents another relevant market in this case.

22. COBOL and C/C++ are the dominant computer languages used for high volume

business processing applications around the world. PL/I is a language, developed by IBM,

which is used widely by large businesses in Europe, Canada and Japan. These languages enjoy

many millions of users, including most of the world’s major corporations, which use them for

programming on their mainframes. It is estimated that the core business applications of large

companies running mainframe computers worldwide are written in COBOL, and comprise at

least 100 billion lines of code, written by between 2 and 3 million programmers.

23. Most of these major users have utilized COBOL, PL/I or C/C++ for many years –

decades for COBOL. Such users conduct many computer operations in these languages and

have multimillion dollar investments in programming and personnel training in the use of each of

these languages. A decision by one of the corporations to adopt other programming languages in

place of one of these languages would require the corporation to undertake a tremendously

expensive replacement of custom programs and retrain its programmers. Moreover, because of

the thousands of application programs developed in each of these languages, each of these

languages is especially effective. For these reasons, users have a very substantial investment in

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the use of each of these languages on IBM mainframes, and customers would not stop the use of

any of these languages even if costs increased by a small but significant amount relative to other

alternative computer languages. IBM’s terms and policies relating to such software have been set

long after most users have made their investments in these programming languages.

24. Particular software products are necessary for users to program in these languages

on IBM mainframes. This software includes “compilers” -- programs that translate the human-

readable source code of each program (such as a COBOL source program) into machine readable

object code that is an executable program. There is no substitute for using such compilers in

developing COBOL, PL/I or C/C++ programs on a mainframe computer, and the software

containing such compilers with respect to each of these languages (“utilities software”) therefore

each represents a relevant market in this case.

25. IBM sells virtually all the software including compilers permitting the use of

COBOL, C/C++ and PL/I on IBM mainframe operating systems. The few competing products

have seen sales decline significantly, and are now rarely used. Users of COBOL, PL/I and

C/C++ on mainframes need IBM’s updated releases of COBOL, PL/I and C/C++ compilers to

properly operate their IBM mainframe computers. IBM therefore possesses monopoly power in

the markets consisting of each of these utilities software releases.

The Database Market

26. IBM also possesses monopoly power with respect to other software products that

it provides for use on IBM mainframes. One such product is DB2 for z/OS and OS/390

(“DB2”). DB2 competes in the market for high volume database management software used on

mainframe computers, which is another relevant market in this case. Such software is necessary

to rapidly and economically organize and access data used on a mainframe computer in high

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volume applications. Virtually all large organizations utilizing mainframe computers purchase

such software, because there is no reasonable substitute for it. Entry into this market is difficult

because users have a significant investment in the software and the application development

barrier to entry described above also exists with respect to this software. There has been no

competitive entry into this market in at least ten years.

27. Through DB2 and its other database products such as IMS/DB, IBM possesses

monopoly power in the market for high volume database software used on mainframes.

According to IBM, DB2 for OS/390 supports key data applications for 80% of the Fortune 1000

companies.

The “Real-time” Transaction Market

28. Another relevant market is the market for high volume transaction-processing

software for use on mainframe computers. Such software is critical for firms engaged in high

volume “real time” transactions such as online ordering, bill-paying and banking. There is no

technically viable alternative for such software in performing these functions.

29. IBM offers its CICS product as the critical software to conduct high volumes of

online, interactive transactions. IBM states on its web site that CICS handles greater than

30 billion transactions per day, and that each day more than $1 trillion in transactions are

processed in CICS. In fact, the use of CICS increased by more than 50% from 1998 to 2000.

IBM also states that more than 30 million people use CICS, and that thousands of software

companies support it with specific applications. IBM claims that CICS provides “unmatched

scalability, performance, reliability, security and data integrity . . . .”

30. There is no significant competition for CICS in the market. Moreover, successful

competitive entry into the market would be very difficult and time-consuming. As is the case for

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the relevant markets discussed above, there is a substantial application development barrier to

entry into the high volume on line transaction processing software market, because of the

thousands of applications developed for use with CICS and the likely reluctance of most ISVs to

develop new applications for a competing product without a substantial volume of business.

Customers are also very unlikely to switch from CICS, given their substantial investments in

employee training and the development of computer programs to work on CICS. For these

reasons, IBM, through its CICS software, possesses monopoly power with respect to high

volume online transaction processing software.

Mainframe Software Tools Markets

31. Three other relevant markets are the markets for particular application

development software, which aid computer programmers and system administrators in

performing certain functions on their mainframes (the “mainframe software tools markets”).

32. The first relevant mainframe software tools market includes software that can be

used for reviewing, finding, editing and manipulating databases and data files for use on

mainframe computers. This is called the file and data management tools market.

33. The remaining mainframe software tools markets are comprised of software

products sold to mainframe users to help them analyze their computer problems, design and

develop their application development software, and test that software. These markets are as

follows:

a. Debugging tools for use on mainframe computers. These productsprovide automated functions which allow a software developer to moreefficiently find and correct problems in the program that he or she iscreating.

b. Fault diagnosis tools for use on mainframe computers. These productshelp mainframe computer users deal with problems that may stop theprogram from running, often referred to as “abends”, “dumps” or“crashes”. Fault diagnosis tools identify the location in the program where

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the fault occurred, and provide diagnoses regarding the source of theproblem.

34. Each of the categories of mainframe software tools (file and data management

tools, debugging tools, and fault management tools) is a relevant market because each tool

performs unique and important functions on an automated basis for customers utilizing

mainframe computers. No other products can perform these functions effectively, and small but

significant changes in the prices of these products would not cause significant numbers of

customers to shift to other products. Nor would producers of other software products develop

and sell products in one of the mainframe software tools markets in response to a small but

significant change in price. As a result, most users of IBM mainframes purchase products in

each of these mainframe software tools markets.

Geographic Market

35. The relevant geographic market in which all the foregoing products compete is

worldwide.

Compuware’s Mainframe Software Tools

36. Compuware deve lops, markets and supports an integrated line of computer

software products and professional services designed to improve the productivity of information

technology departments of businesses worldwide. Among other products, Compuware offers

testing and implementation software products that focus on improving the productivity of

programmers and analysts in application testing, test data preparation, error analysis and

maintenance of systems running on IBM and IBM-compatible mainframes. The Compuware

software product families and associated user manuals pertinent to this action (which are sold in

the mainframe software tools markets) are as follows (hereinafter collectively referred to as

“mainframe software tools”):

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37. File and Data Management Products. Compuware’s File-AID® family of file

and data management products gives programmers immediate and direct access to the data

needed for test and production work. File-AID products provide for quick, straightforward

creation of test data, the automated movement and conversion of large volumes of data between

platforms, and a controlled method of examining and correcting production data. These products

function across all the principal data access methods and database management systems

employed on IBM and IBM-compatible mainframe computers, including VSAM, ISAM,

sequential files, IMS and DB2.

Fault Diagnosis Products. Compuware’s Abend-AID® family of fault diagnosis

products comprise automatically invoked, knowledge-based systems that intercept system error

messages from the abnormal end (“abend”) of live program executions, pinpoint the location and

cause of the failure, and recommend corrective action. By using these tools, programmers

reduce the time required to analyze failures and increase the accuracy of analysis. Compuware

offers fault diagnosis tools for both batch processing and on line environments and for the IMS,

IDMS and DB2 database management systems.

Interactive Analysis and Debugging Products. Interactive debugging products enable

programmers and analysts to identify and resolve errors in complex software efficiently and

accurately. These products enable a programmer at a terminal using either test or production

data to step through the program being debugged one statement or statement group at a time.

When an error is detected, the products permit immediate correction of both program logic and

data, which can then be followed by further step by step testing and debugging until the program

is error free. Compuware’s Xpediter family of interactive debugging products supports both

batch processing and on line environments and is linked with certain of Compuware’s fault

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diagnosis and file and data management tools to provide a comprehensive debugging

environment.

Compuware’s Proprietary Rights

38. Compuware’s mainframe software tools contain a substantial amount of material

that is wholly original to Compuware and its predecessors in interest and is copyrightable subject

matter under the laws of the United States. Compuware has complied in all respects with the

Copyright Act of 1976, 17 U.S.C. § 101, et seq. and all other laws governing copyright.

Compuware is, and at all relevant times has been, the owner of the copyrights in its mainframe

software tools, and holds, inter alia, the following certificates of registration granted by the

Copyright Office.

Registration Date Title

TX-2-975-052 10/23/90 CICS Abend-AID for Release 4.1.

TX-3-461-937 02/02/93 Abend-AID, release 6.0.3

TX-3-461-938 02/02/93 CICS Abend-AID, release 5.2.0

TX-3-461-941 02/02/93 File-AID, release 6.5

TX-4-074-987 06/17/95 File-AID, release 8.0.

TX-4-075-254 07/17/95 Abend-AID, release 8.1.

TX-4-075-340 07/17/95 File-AID/related data XPERT.

TX-4-096-647 07/17/95 Abend-AID, MVS version.

TX-4-164-219 07/17/95 Abend-AID MVS version : release 8.0.

TX-4-057-617 07/31/95 File-AID for DB2, release 3.5.

TX-4-057-618 07/31/95 CICS Abend-AID/FX, release 1.1.

TX-4-057-500 08/05/95 File-AID for IMS, release 4.0.

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Registration Date Title

TX-4-119-481 08/21/95 File-AID/PC.

TX-4-119-616 08/21/95 Abend-AID for VSE/ESA, release 1.2.

TX-4-140-901 08/21/95 File-AID--FSP/XSP version, release 6.5.

TX-4-166-289 08/21/95 CICS Abend-AID for VSE : release 4.1.

TX-4-701-143 12/22/97 File-AID/CS 01.04.

TX-4-861-035 04/20/99 File-AID/Data Ager, a powerful and precise way to age

data for the year 2000, release 2.0.

TX-5-106-709 12/06/99 File-AID/CS 2.01.04.

TX-5-106-710 12/06/99 File-AID for IMS, version 5.0.0.

TX-5-106-711 12/06/99 File-AID/Related Data XPERT 2.1.

TX-5-106-712 12/06/99 Abend-AID for VSE, release 2.2.

TX-5-106-713 12/06/99 CICS Abend-AID/FX 4.2.

TX-5-106-717 12/06/99 File-AID Data Solutions, release 3.0.

TX-5-106-719 12/06/99 File-AID for DB2 4.1.

TX-5-233-159 07/03/00 Compuware Shared Services, distributed viewing

support for Abend-AID for MVS/XLS.

TX-5-253-530 08/03/00 CICS ABEND-AID for VSE.

TXu-623-679 10/06/00 Abend-Aid 9.0.4.

TX-5-324-815 05/14/01 File-AID/Express, release 2.6.

True and correct copies of these certificates are attached hereto as Exhibits 1-29.

39. Since Compuware’s mainframe software tools were developed, Compuware has

placed a copyright notice on all copies of its mainframe software tools that it has produced or

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licensed. Any copies of the mainframe software tools produced or licensed by Compuware, or

under its authority, have been produced and licensed in strict conformity with the provisions of

the Copyright Act of 1976, 17 U.S.C. § 101, et seq. and all other laws governing copyright.

40. Since the development of its mainframe software tools, Compuware has been and

still is the sole proprietor of all of its rights, title and interest in and to the copyrights in its

mainframe software tools.

41. Compuware regards its mainframe software tools, and the source code of those

tools, as proprietary trade secrets and confidential information, and Compuware takes reasonable

measures to maintain their secrecy. Compuware relies on a combination of trade secret, patent,

copyright and trademark laws, together with its license agreements with customers, internal

security systems, confidentiality procedures and employee agreements to maintain its products as

proprietary. Compuware typically provides its products to users under nonexclusive,

nontransferable, perpetual licenses. Under the general terms and conditions of its standard

product license agreement, the licensed software may be used solely for the licensee’s own

internal operations on designated computers at specific sites. In addition, to prevent

misappropriation of Compuware’s trade secrets, these license agreements expressly provide that

the customer may not sublicense, sell, rent, disclose, make available, or otherwise communicate

Compuware’s mainframe software tools to any other person, and that the customers may not

disassemble, decompile or reverse engineer Compuware’s mainframe software tools.

42. Since Compuware’s mainframe software tools were originally developed,

Compuware has expended substantial resources on research and development in order to

improve and update its mainframe software tools. Compuware’s mainframe software tools are

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consistently the most innovative products in the markets in which they compete, and Compuware

has been the leader in product innovation in these markets.

43. The mainframe software tools that are the subject of this litigation presently

account for a substantial amount of Compuware’s total revenues. In addition, Compuware’s

mainframe software tools, and their underlying source code, derive independent economic value,

actual and potential, from not being generally known to, and not being readily ascertainable by

proper means by, other persons who could obtain economic value from their disclosure or use.

Full Service Outsourcing Market

44. Another relevant market in this case consists of full service outsourcing of high

volume mainframe computer functions. This market involves the performance of the full range

of computer programming and software and hardware operations and maintenance services for

companies operating high volume mainframes, including the selection of computer hardware and

software. When a customer contracts for full service outsourcing, it generally “turns over” its

entire mainframe (and often other) computer operations to the outsourcing firm, which often

hires many of the customer’s computer personnel. Many firms have sought full service

outsourcing of their computer functions in order to gain the benefits, expertise and cost savings

from the specialized firms that perform these functions.

45. While outsourcing is also provided for specific projects or functions, the

businesses that purchase full service outsourcing do so because such outsourcing fits their overall

information technology and human resources plans. A small but significant change in the price

of full service outsourcing as compared to other outsourcing functions would not cause a

substantial number of firms to shift from full service outsourcing.

46. There are significant barriers to entry into the full service outsourcing market.

Full service outsourcing requires that the provider thereof possess very substantial resources and

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personnel with a wide range of software and hardware skills. Very few firms have the size and

range of personnel with the requisite skills to perform these functions. Additionally, in order to

compete successfully in this market, a firm needs a well-established track record reflecting

successful outsourcing of a full range of software functions. This is necessary because

businesses would not trust their entire information technology departments to firms that could

not clearly demonstrate the high quality of their services.

47. A division of IBM called IBM Global Services is the leader in this market, with a

share in excess of 30%. Because of IBM's very substantial resources, and because it provides the

hardware, operating systems, software and other basic software for the vast majority of

businesses using mainframes, it is uniquely positioned to provide full service outsourcing

services.

IBM’s Anticompetitive Scheme

48. Until 1999, IBM did not substantially compete with Compuware in any of the

mainframe software tools markets. Commencing in at least 1999, IBM developed and carried

out a scheme specifically intended to compete unfairly in each of these markets, and to utilize its

monopoly power in the mainframe, operating system and other markets described above to gain

an unfair competitive advantage and, ultimately, monopoly power in each of the three mainframe

software tools markets as described above.

49. Pursuant to this scheme, IBM undertook to develop a set of mainframe tools to

compete with Compuware and others. IBM’s purported strategy was to develop this set of tools

to drastically lower the costs to its customers who paid licensing and maintenance fees to third

party vendors. In fact, IBM’s actual strategy was to create further dependence by its customers

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on the IBM line of products, thereby unlawfully extending IBM’s already formidable

monopolies.

50. Because IBM had developed no commercially viable tools of its own and needed

to develop competitive tools quickly, Compuware is informed and believes that IBM embarked

on a strategy of using third party developers to assist it. Compuware is informed and believes

and on this basis alleges that in early 2000, to reduce the time to market IBM and its third-party

vendors elected simply to copy, among other things, portions of Compuware’s source code for its

File-AID IMS product and to copy and paraphrase large passages of Compuware’s user

documentation. Said code and documentation were subject to protection of the copyright and

trade secret laws and nondisclosure agreements Compuware had with IBM, Compuware’s

customers and Compuware’s employees.

51. In furtherance of this scheme, in approximately August 2000, IBM began

marketing two new mainframe software products: File Manager and Fault Analyzer. IBM

markets File Manager in competition with and as the functional equivalent to Compuware’s

product, File-AID. IBM markets Fault Analyzer in competition with and as the functional

equivalent of Compuware’s product Abend-AID.

IBM’s Illegal Tying, Monopoly Leveraging and Attempted Monopolization of theMainframe Software Tools Market

52. To further its scheme to monopolize the mainframe software tools market and to

destroy competition, IBM engaged in a series of acts designed to gain monopoly power in the

mainframe software tools markets. This scheme was accomplished by using the copied

Compuware technology and by using IBM’s monopoly power in the above-described markets as

alleged below.

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Denial of Information

53. One significant part of IBM's anticompetitive scheme involves the denial to

Compuware of significant technical information relating to IBM's operating systems, utilities

software, DB2 and CICS (referred to collectively as the “critical software”). As described in

more detail below, because the mainframe software tools are intended to aid businesses to more

effectively write programs and operate their computer systems in connection with IBM’s critical

software, it is important for Compuware and other ISVs to timely obtain detailed technical

information about the IBM software in order to provide the most innovative and effective

products to their customers. Since the availability of effective mainframe software tools

enhances customers’ ability to use IBM’s hardware and software, IBM has historically provided

such information to Compuware and other ISVs. The free flow of this information benefits

IBM's and Compuware's common customers and therefore benefits both IBM and Compuware.

However, as part of its scheme to harm competition in mainframe software tools, IBM has

recently used its power over its hardware and critical software products to choke off this flow of

information. These actions have harmed both Compuware and other ISVs and their customers.

54. Because the mainframe software tools, like many application development

software products, are designed to work with IBM’s critical software, including IBM releases of

COBOL, PL/I, C/C++, DB2 and CICS, developers of such software tools need to obtain

prerelease access to information concerning changes in this software so that they can promptly

and effectively update their products to make them work on the most current versions of these

IBM products. This benefits the customers of both IBM and Compuware and other ISVs, since

these customers need software tools that work effectively with IBM’s hardware and software.

IBM routinely provides such information to “beta” (advance trial) users of this product. It is also

DET_C\476962.30 21

important to software tools developers that IBM work with them to answer their questions

concerning IBM’s critical software and work with them to avoid incompatibility problems

between such software tools and IBM’s critical software.

55. Providing such information and cooperation is equally in IBM’s interest, since the

overall attractiveness of IBM’s products is enhanced by the ability of IBM’s customers to

effectively utilize their application software with these products. Moreover, the prompt

availability of mainframe software tools and other application software that work with new

releases of IBM products will make it more attractive for customers to quickly switch to the

latest releases of IBM’s software. IBM’s recognition of these facts is demonstrated by IBM’s

promotional materials on its web site, which emphasize that more than 1,500 ISVs provide

application software to be used with the IBM S/390 platform. The web site also seeks to

promote IBM’s new z series by listing the ISVs that “have indicated to IBM that their product

line will support” that architecture. Compuware is one of the listed ISVs. IBM states on its web

site that it “relies heavily on ISVs . . . to build the . . . applications that give the z series and

S/390 platforms full value to your enterprise.”

56. For these reasons, since at least the mid 1980s, IBM has regularly shared

information about its operating system, critical software and other key software such as DB2 and

CICS, with Compuware and other ISVs. Such information has often been provided as much as

two years in advance of the availability of these products to the general public, so that at the time

the IBM products are made available to the general public, or as soon thereafter as possible,

companies like Compuware can offer updated versions of their mainframe software tools and

other products that work with these new products. IBM has also historically cooperated with

DET_C\476962.30 22

Compuware in improving IBM’s software to permit greater ease of use of the mainframe

software tools with IBM products.

57. In fact, on a regular basis, IBM and Compuware have signed confidentiality

agreements designed to facilitate such transmissions of information by assuring the

nondisclosure by Compuware of such information. These agreements specifically contemplate

that the parties would provide each other with information on products that were not generally

available. Other ISVs have signed similar form agreements with IBM.

58. However, as part of its anticompetitive scheme, IBM has changed its long-held

practices, and has begun to (i) refuse to provide Compuware and other sellers of mainframe

software tools access to such IBM information, and (ii) refuse to cooperate generally with

Compuware and other sellers of mainframe software tools. Such actions have been taken for the

express purpose, and with the effect, of restricting competition in mainframe software tools.

Examples of these actions include the following:

(a) An e-mail from IBM stated that “due to increasingly competitive

relationship with Compuware we cannot give you a beta version [of IBM COBOL Release].

FYI: We just shipped ‘Fault Analyzer for OS/390’ and ‘File Manager for OS/390,’ direct

competitors with Abend-Aid and File-Aid. We are working feverishly to make our Debug Tool

better than Xpediter. Therefore, shipping a beta to you would be seen as helping the enemy,

however untrue that may be.”

(b) IBM personnel told a German customer that IBM would not share relevant

release data with Compuware and other ISVs concerning the next major DB2 release. The IBM

employee stated that its action would disable Compuware from delivering a proper product.

DET_C\476962.30 23

(c) An IBM program director told a Compuware staff person that IBM would

not share support information on certain COBOL files because the same IBM lab put out Fault

Analyzer and Fault Manager and this would make Compuware products more competitive.

(d) IBM refused to provide Compuware with the names of “beta” customers

who utilize Compuware tools, which would help Compuware to meet their support needs on a

timely basis. IBM has historically provided such information to Compuware.

(e) IBM personnel have refused to respond to Compuware’s requests for

information regarding inconsistencies between IBM’s public documentation and actual product

performance.

(f) In some instances, Compuware personnel have not been permitted to

obtain information relating to new IBM releases without payment of very substantial sums

($100,000 and $750,000 on two occasions), even though the same kinds of information had

previously been provided free or at a much lower charge.

(g) Other information has been provided by IBM, but after delays of as long

as three years.

59. IBM has also made changes in CICS and DB2 which make it more difficult for

Compuware’s mainframe software tools to work effectively in those environments. When

Compuware brought this to IBM’s attention, IBM refused to make any revisions to avoid these

problems.

60. But for IBM’s anticompetitive scheme, it would have continued to provide the

foregoing information to Compuware and would have continued to cooperate with Compuware

in the development of its software.

DET_C\476962.30 24

61. As stated above, IBM is the sole source of such information and its refusal to

provide such information is done solely for the purpose of strengthening IBM’s monopoly.

IBM’s actions described above have caused Compuware significant expense. They have also

interfered with Compuware offering, and in some cases prevented or delayed Compuware from

offering, certain desirable and innovative functions and features with its products. These actions

have harmed purchasers of mainframe software tools and competition for mainframe software

tools.

62. If such conduct is not enjoined, IBM will continue to deny such competitively

significant information to Compuware and other sellers of mainframe software tools.

Unlawful Tying

63. As part of its anticompetitive scheme, IBM has also tied certain sales of its critical

software, including software and compilers for COBOL, C/C++ and PL/I, with its sales of Debug

Tool. Debug Tool is provided with compilers included in many software releases of these

products, and therefore any customer purchasing one of the foregoing releases is forced to

purchase and install Debug Tool. Since many users of the mainframe software tools purchase

one or more of these releases from IBM, IBM’s unlawful tying has forced the purchase of Debug

Tool by many purchasers in the relevant debugging market.

64. IBM provides Debug Tool with its compilers despite the fact that Debug Tool

performs a separate debugging function, and is separately marketed by IBM as involving

“advanced facilities for debugging and testing applications.” In March 2001, IBM released a

more than 400 page Users Guide to Debug Tool. In fact, IBM consistently informs customers

that Debug Tool is an alternative to debuggers provided by ISVs such as Compuware. Thus,

customer demand for Debug Tool is distinct from demand for the products to which it is tied.

DET_C\476962.30 25

Customers make separate decisions as to whether to use Debug Tool (as compared to other

debugging products, such as Compuware’s Xpediter) even though they routinely use the

compilers to which it is tied. Moreover, the fact that Compuware and other firms sell debugging

tools as stand-alone products means that there is sufficient distinct demand to efficiently sell

these products separately.

65. IBM has also begun tying its critical software to others of its mainframe software

tools, including IBM’s File Manager and Fault Analyzer products. This is true despite the fact

that Fault Analyzer and File Manager are each marketed as distinct products to customers, in

each case to fulfill the specific needs of these customers. Thus, customers have distinct demands

for each of File Manager and Fault Analyzer.

66. If not enjoined, IBM’s tying threatens to foreclose competition in a substantial

amount of commerce, both absolutely and as a proportion of the mainframe software tool

markets. This tying will cause many customers to receive one or more of IBM’s mainframe

software tools despite the fact that in a free competitive market they would have chosen to

license Compuware’s higher quality products or, in some cases, the products of other ISVs. This

will substantially harm competition in each of the mainframe software tool markets.

Steering By IBM Global Services

67. As more fully explained below, IBM's anticompetitive scheme has also involved

efforts by IBM Global Services to steer the purchase decisions of its clients away from the

mainframe software tools of Compuware and other ISVs to the products of IBM. The thousands

of businesses that utilize IBM Global Services to operate their information technology functions

rely on IBM to make objective decisions on their behalf regarding the purchase of computer

hardware and software. Instead, IBM Global Services has begun a practice of purchasing IBM's

DET_C\476962.30 26

products over Compuware's higher quality products even though this threatens to interfere with

the efficient operation of its customers’ mainframe computer functions.

68. IBM Global Services provides software consulting services that include the

operation of large companies’ computer systems and the development of new software

applications. In many cases, IBM Global Services will take over a large corporation's entire

information technology department and staff and operate it.

69. IBM states on its web site that IBM Global Services “is the world’s largest

information technology services provider, with nearly 150,000 professionals serving customers

in 160 countries and annual revenue of more than $33 billion (2000).” A substantial portion of

the users of the mainframe software tools are clients of IBM Global Services.

70. IBM Global Services offers its customers “total systems management.” For

example, as IBM explains on its web site, it will “assist [customers] to define your long term IT

systems management strategy, design administrative processes, select tools to manage your

systems and create an organizational structure that enables continuous evaluation of systems

performance against dynamic e business needs.”

71. IBM Global Services promises to take these steps on behalf of its customers, and

in their interests. IBM states on its web site that “IBM becomes the customer’s IT partner,

providing an accountable, single point of contact for its defined IT services. . . .” IBM promises

that it will select the optimal software tools for its customers, stating that “[y]ou can count on the

people of IBM Global Services to help successfully manage your IT investment to deliver

optimal performance and business value.”

72. Since IBM has begun to offer Fault Analyzer, File Manager and an enhanced

version of Debug Tool, IBM Global Services has begun to steer its customers away from

DET_C\476962.30 27

competing products in the mainframe software tools markets and to IBM’s products without a

fair assessment of the relative quality and price of these alternatives. One IBM Global Services

representative told a Compuware employee that “we are an IBM shop. It would be silly to look

anywhere else” for the mainframe software tools. Compuware personnel have been informed

that IBM Global Services would cause its clients to use IBM tools whenever possible. Since in

most cases IBM Global Services completely operates its clients’ computer departments, this

steering can often be accomplished even without any significant involvement in the decision by

IBM’s client. In other cases, IBM has told its clients that it would charge them an additional fee

if they wished to purchase Compuware’s mainframe software tools.

73. IBM Global Services has taken these actions despite its realization that

Compuware’s mainframe software tools, among others, are clearly superior to IBM's products.

In fact, IBM Global Services is a very large user of Compuware's mainframe software tools. Its

actions have therefore foreclosed competition in the relevant markets.

74. Such actions by IBM Global Services are unethical and improper, and violate its

obligations to its clients, because, among other reasons, they do not provide optimal performance

and business value, do not reflect the fulfillment of IBM’s obligations as a “partner” of its clients

and are not in the best interests of those clients. These actions threaten to interfere with

Compuware’s reasonable expectancy of an opportunity to sell its mainframe software tools to the

clients of IBM Global Services. Moreover, they threaten to interfere with Compuware’s existing

relationships with users of its mainframe software tools, since IBM’s actions threaten to

terminate such relationships, including existing software maintenance contracts between

Compuware and many clients of IBM Global Services.

DET_C\476962.30 28

Pressure on ISVs

75. IBM has taken other actions as well to interfere with the competitive activities of

Compuware and other ISVs operating in the mainframe software tools markets. One ISV not

operating in these markets was told by IBM personnel that if it did business with Compuware,

“count us out.”

Continuing Conduct

76. IBM’s activities pursuant to its anticompetitive scheme are increasing in

frequency and intensity. While these actions have already caused substantial anticompetitive

harm, if they are not enjoined, they will cause substantially greater harm in the future.

Specific Intent

77. IBM is taking all the foregoing actions in order to attain monopoly power in the

mainframe software tools markets.

Competitive Effects

78. IBM’s continuing actions, if not enjoined, threaten to cause, among others, the

following effects:

(a) Customers’ freedom of choice among mainframe software tools will be

prevented and stymied;

(b) Competition from ISVs providing mainframe software tools will be

substantially injured, reduced and foreclosed and product innovation will be suppressed;

(c) Compuware and other ISVs will suffer significant injury through lost sales

and greater expenses;

(d) The quality and effectiveness of mainframe software tools provided by

ISVs will be compromised by IBM’s refusal to provide relevant information to the ISVs;

DET_C\476962.30 29

(e) These same factors will substantially increase barriers to entry into

mainframe software tool markets, so that the barriers will significantly obstruct entry into these

markets, since:

(i) Aspiring new entrants will find it far more difficult to obtain

information on the IBM software with which the mainframe software tools must interact, and

(ii) New products cannot effectively compete if IBM ties the sales of

its mainframe software tools to the sales of its hardware, operating systems, compilers and other

basic software, and if IBM Global Services controls the selection of the mainframe software

tools at its customers’ locations; and

(f) IBM will gain the ability to foreclose and exclude competition in the full

service outsourcing market. Currently, Compuware's mainframe software tools are used

successfully by some of IBM's most significant competitors in the full service outsourcing

market. If IBM is successful in establishing the dominance of its own mainframe software tools,

and then refuses to provide these tools to its full service outsourcing competitors, this will

substantially reduce competition in the full service outsourcing market.

79. If IBM’s conduct is not enjoined, there is a dangerous probability that IBM will

attain monopoly power in each of the mainframe software tools markets. Many purchasers in the

relevant debugging market are forced to purchase and install DeBug Tool as a result of IBM’s

unlawful tying, and IBM is able to similarly force the purchase of File Manager and Fault

Analyzer by virtually every purchaser in the mainframe software tools markets, since virtually all

of these purchasers need IBM’s critical software. The widespread use of IBM Global Services

by firms which also use the mainframe software tools, the fact that all mainframe software tools

must use a wide range of IBM hardware and software, and the fact that IBM sells far more

DET_C\476962.30 30

software for use on mainframe computers to every purchaser of any of the mainframe software

tools than do any ISVs providing those tools, provide IBM with an opportunity to exclude

competition and control price in each of the mainframe software tools markets.

80. Such actions threaten to cause substantial harm to Compuware. This harm is

occurring, and, if not enjoined will continue to occur, only because of IBM’s anticompetitive

actions described above. None of this harm or threatened harm can be attributed to any other

actions of IBM, because IBM would not have taken the foregoing actions (and would not in the

future take such actions) absent IBM’s anticompetitive scheme.

FIRST CLAIM FOR RELIEF

Direct and Contributory Copyright Infringement

(17 U.S.C. § 101 et seq.)

81. Compuware realleges and incorporates by reference paragraphs 1 through 80 as if

fully set forth herein.

82. Compuware is informed and believes and based thereon alleges that IBM released

version 2.0 of its File Manager IMS program in or around August of 2001. Compuware is

further informed and believes and based thereon alleges that IBM released version 2.0 of its

Fault Analyzer program in or around May, 2001. Both File Manager 2.0 and Fault Analyzer are

mainframe software tools for, inter alia, IBM’s IMS operating system extension.

83. Compuware is informed and believes and based thereon alleges that prior to

IBM’s release of File Manager 2.0 and Fault Analyzer, IBM gained access to and acquired a

copy of Compuware’s File-AID and Abend-AID products and underlying source code so that it

could unlawfully use, reverse engineer and copy Compuware’s software products in order to

develop and improve its competing File Manager and Fault Analyzer software products.

DET_C\476962.30 31

84. Compuware is informed and believes and based thereon alleges that IBM

knowingly and willfully copied both the object code and source code of Compuware’s

mainframe software tools, namely, the File-AID and Abend-AID IMS computer programs in

order to develop IBM’s new product line. IBM’s File Manager program includes several

modules that appear to have been literally copied from Compuware’s source code or are

substantially similar thereto. Further, the security exit scheme that is unique to File-AID is

substantially similar in the IBM product. In addition, there are restrictions, limitations and bugs

in IBM’s File Manager program that are strongly indicative of copying of source code for

Compuware’s File-AID IMS program. Further, both IBM’s File Manager and Compuware’s

File-AID allocate IMS datasets in virtually the same way, even though the approach taken by

Compuware is arbitrary and not standard in the industry. The hierarchical commands in IBM’s

File Manager program, including the use of particular screens, are substantially similar to those

commands in Compuware’s File-AID. Finally, there are numerous passages in the IBM File

Manager user manual that are nearly verbatim copies of Compuware’s File-AID IMS manual

and where IBM uses terminology that is unique to Compuware. Compuware is also informed

and believes that several modules of IBM’s Fault Analyzer program also appear to have been

literally copied from Compuware’s products or are substantially similar.

85. Compuware is informed and believes and based thereon alleges that by copying

Compuware’s mainframe software tools, IBM has developed, or is in the process of developing,

one or more products, namely File Manager and Fault Analyzer, or portions thereof which are

identical or substantially similar to many portions of Compuware’s mainframe software tools,

namely File-AID and Abend-AID, in their underlying logic, structure, organization and

sequence, as well as in various other respects.

DET_C\476962.30 32

86. Compuware is informed and believes and based thereon alleges that by copying

Compuware’s mainframe software tools, IBM has incorporated, or is in the process of

incorporating into its existing products, programs, or portions thereof, that are identical or

substantially similar to many portions of Compuware’s mainframe software tools in their

underlying logic, structure, organization and sequence, as well as in various other respects.

The natural, probable and foreseeable result of the aforesaid conduct of IBM has been and will

continue to be to deprive Compuware of business and the licensing of its mainframe software

tools, to deprive Compuware of goodwill, to injure Compuware’s relations with prospective

customers, and to impose substantial expenses on Compuware to counteract the aforesaid

conduct.

87. Compuware is informed and believes and based thereon alleges that it has lost or

will lose license revenues for its mainframe software tools, and has sustained and will sustain

damages as a result of IBM’s wrongful conduct and its marketing of any infringing products.

IBM’s aforesaid wrongful conduct has also deprived and will continue to deprive Compuware of

opportunities for expanding its goodwill.

88. Compuware is informed and believes and based thereon alleges that because IBM

has not incurred the substantial research and development costs and other overhead expenses

associated with developing and improving Compuware’s mainframe software tools, IBM will be

able to market and has marketed its infringing products at lower license fees than those

Compuware must charge for its mainframe software tools. As a result, the marketing of any

infringing products has and will continue artificially to erode the price the customers will be

willing to pay for Compuware’s mainframe software tools.

DET_C\476962.30 33

89. Defendant IBM had been unjustly enriched by its copying, use and marketing of

Compuware’s mainframe software tools and works derived therefrom.

90. By means of the actions complained of herein, IBM has directly infringed and,

unless restrained by court order, will continue to infringe Compuware’s copyrights in and

relating to its mainframe software tools (including object, source and executable code), by

reproducing, distributing, and placing upon the market products or portions thereof which were

copied from Compuware’s copyrighted mainframe software tools and preparing derivative works

based thereon.

91. Compuware is informed and believes and based thereon alleges that IBM has

contributorily infringed and induced infringement of and will continue to contributorily infringe

and induce infringement of Compuware’s copyrights in its mainframe software tools by

knowingly inducing, causing and materially contributing to the infringement of Compuware’s

exclusive rights by others – namely, users of IBM’s computer mainframe software tools, and

inducing infringement by third parties.

92. By its actions alleged above, IBM has infringed and will continue to infringe

Compuware’s copyrights in its mainframe software tools by copying and using them without

Compuware’s authorization in violation of 17 U.S.C. §§ 101, et seq.

93. Upon information and belief, IBM’s infringing acts have been willful and

deliberate, and in utter disregard for Compuware’s rights.

94. Compuware is informed and believes and based thereon alleges that unless

enjoined by this Court, IBM intends to continue its course of conduct, and to wrongfully use,

infringe upon, sell, license, and otherwise profit from Compuware’s mainframe software tools

and works derived therefrom. As a direct and proximate result of the acts of IBM alleged above,

DET_C\476962.30 34

Compuware has already suffered irreparable damage and has sustained lost profits. Compuware

has no adequate remedy at law to redress all of the injuries IBM has caused and intends to cause

by its conduct. Compuware will continue to suffer irreparable damage and to sustain lost profits

until IBM’s actions alleged above are enjoined by this Court.

95. In addition, as a result of IBM’s actions, Compuware has suffered and will

continue to suffer damages in an amount to be determined at trial.

SECOND CLAIM FOR RELIEF

Misappropriation of Trade Secrets

(Michigan Uniform Trade Secrets Act, M.C.L.A. § 445.1901 et seq.)



97. Because Compuware’s mainframe software tools and underlying source code

contain information that is not generally known to the public or to other persons who can obtain

economic value from its disclosure or use, it is the subject of efforts by Compuware to maintain

its secrecy, and derives independent economic value from not being generally known, such

information constitutes “trade secrets” under Michigan Complied Laws, § 445.1901 et seq.

98. Compuware is informed and believes and based thereon alleges that IBM

misappropriated Compuware’s trade secrets in its mainframe software tools by acquiring

knowledge of those trade secrets when it knew or should have known that the trade secrets had

been acquired by improper means, by an individual or entity who had utilized improper means to

acquire them, had acquired them under circumstance giving rise to a duty to maintain its secrecy

or limit its use, and/or were derived from or through a person who owed a duty to Compuware to

maintain the secrecy of its trade secrets or to limit their use, and by disclosing or using

DET_C\476962.30 35

Compuware’s trade secrets without its express or implied consent. Said trade secrets include, but

are not limited to, the source code and all portions thereof, and all other information, including

formulas, patterns, compilations, programs, devices, methods, techniques, manuals and processes

related to Compuware’s mainframe software tools, excepting only any information explicitly

disclosed in Compuware’s public marketing materials for such products.

99. By reason of the foregoing acts and conduct of IBM, Compuware will suffer great

and irreparable harm and damage, which damage will be difficult to ascertain, and Compuware

will be without an adequate remedy at law, including loss of customers, dilution of goodwill,

confusion of potential customers, injury to its reputations, and diminution in value of its

confidential information and other proprietary data.

100. Compuware is entitled to an injunction restraining IBM, its officers, agents,

employees, and all persons acting in concert with them, from engaging in further such unlawful

acts and from reaping any additional commercial advantage from its misappropriation of

Compuware’s trade secrets.

101. Compuware is further entitled to recover from IBM the damages sustained by it as

a result of IBM’s wrongful acts as hereinabove alleged. The amount of damages cannot be

determined at this time.

102. Compuware is further entitled to recover from IBM the gains, profits, advantages,

and unjust enrichment it has obtained as a result of its wrongful acts as hereinabove alleged.

103. IBM’s acts of misappropriation were both willful and malicious, and therefore

Compuware is entitled to an award of exemplary damages and attorney’s fees.

DET_C\476962.30 36

THIRD CLAIM FOR RELIEF

Intentional Interference with Contractual Relations



105. In order to maintain the secrecy of its confidential information, including the

secrecy of the source code to its mainframe software tools, Compuware enters into written

confidentiality agreements with each of its employees, prohibiting its employees from disclosing

Compuware’s trade secrets to third parties. Such confidentiality agreements constitute valid and

enforceable contracts and remain binding on the employee even after the employee has

terminated his or her employment with Compuware.

106. IBM knew or should have known of the existence of Compuware’s confidentiality

agreements with its employees.

107. IBM wrongfully, intentionally, and without justification caused and persuaded

one or more of Compuware’s employees or former employees to breach their confidentiality

agreements with Compuware by causing the employee(s) or former employee(s) to breach his or

her confidentiality agreement with Compuware and to reveal to IBM Compuware’s source code

to its mainframe software tools.

108. By reason of the foregoing acts and conduct of IBM, Compuware is entitled to

recover from IBM the damages sustained by it as a result of IBM’s wrongful acts as hereinabove

alleged. The amount of damages cannot be determined at this time. Compuware is further

entitled to recover from IBM the gains, profits, advantages, and unjust enrichment it has obtained

as a result of its wrongful acts as hereinabove alleged.

DET_C\476962.30 37

109. By reason of the foregoing acts and conduct of IBM, IBM is guilty of oppression,

fraud or malice, and therefore Compuware is entitled to exemplary damages and attorneys fees

against IBM.

FOURTH CLAIM FOR RELIEF

Sherman Act, Section 1: Unlawful Tying

(15 U.S.C. § 1)


duly set forth herein.

111. Mainframe computers, operating systems and each of the basic software products

discussed above (including DB2, CICS and IBM mainframe software releases of COBOL,

C/C++ and PL/I) are separate products each facing a distinct demand. IBM has substantial

market power in each of the markets for mainframe computers, operating systems and the basic

software products. Because of the importance of these products to IBM’s customers, IBM has

the ability to force them to purchase IBM’s mainframe software tools.

112. IBM has tied the purchase of each of its mainframe software tools to the purchase

of operating systems and the basic software products, in violation per se of Section 1 of the

Sherman Act and in unreasonable restraint of trade. IBM continues to engage in these practices.

113. IBM’s tying threatens to substantially foreclose competition in each of the

mainframe software tools markets and to significantly harm competition on the merits and

interfere with customer choice in each such market. There is a substantial threat that IBM’s

actions will provide it with market power in each of the mainframe software tools markets.

114. Compuware prays that IBM’s conduct described above be permanently enjoined

and that Compuware receive three times its actual damages and its costs and attorneys’ fees.

DET_C\476962.30 38

FIFTH CLAIM FOR RELIEF

Sherman Act, Section 2: Monopoly Leveraging

(15 U.S.C. § 2)

115. Compuware restates, and realleges paragraphs 1 through 80 above, as if fully set

forth herein.

116. IBM has monopoly power in the markets for mainframe computers, operating

systems and the basic software markets described above.

117. By the conduct described above, IBM has used (and if not enjoined will continue

to use) its monopoly position in these multiple markets to: amplify its position and gain an

unfair competitive advantage for its inferior products in the mainframe software tools markets;

distort and foreclose competition in those markets; harm other competitors in those markets,

including Compuware; preclude customers in the mainframe software tools markets from

making free choices among mainframe software tools; impose additional costs on both

competitors and purchasers of the mainframe software tools; and thereby significantly harm

competition in the mainframe software tools markets. None of these actions have been

undertaken in order to benefit customers or provide efficiencies, and none have had that effect.

These practices constitute unlawful monopoly leveraging, in violation of Section 2 of the

Sherman Act.



DET_C\476962.30 39

SIXTH CLAIM FOR RELIEF

Sherman Act, Section 2: Attempt to Monopolize

(15 U.S.C. § 2)


forth herein.

120. IBM is willfully engaging in a pattern of conduct that threatens competition in the

mainframe software tools markets and is exclusionary, with the specific intent of monopolizing

the mainframe software tool market. IBM continues to engage in such conduct.

121. There is a dangerous probability that IBM, unless it is restrained, will succeed in

monopolizing the mainframe software tool markets, in violation of Section 2 of the Sherman Act.

122. Such actions constitute unlawful attempted monopolization.



SEVENTH CLAIM FOR RELIEF

Tortious Interference with Business Expectancy


forth herein.

125. IBM Global Services’ steering as described above constitutes a breach of IBM’s

duty of loyalty and good faith, and its duty to act in the best interest of its clients. IBM has

therefore acted improperly and unethically.

126. IBM’s anticompetitive conduct described above was malicious, unjustified and

improper.

DET_C\476962.30 40

127. By such actions IBM is wrongfully interfering with Compuware’s business

expectancy and prospective economic relationships. Customers who have used and would

otherwise continue to use Compuware’s mainframe software tools will be diverted to IBM’s

products.


and that Compuware receive its actual damages and its costs and attorneys’ fees.

EIGHTH CLAIM FOR RELIEF

Unfair Competition (California Business & Professions Code, § 17200 et seq.)

129. Compuware restates and realleges the allegations in paragraphs 1 through 128

above, as if fully set forth herein.

130. Compuware and IBM have both sold substantial quantities of the mainframe

software tools to persons in the State of California. IBM’s Santa Teresa California personnel

have denied critical information to Compuware as described above. If not enjoined, IBM’s

practices described above will significantly affect and restrain the sales of the mainframe

software tools in California.

131. IBM’s practices described above involving or related to (a) IBM’s actions in

California, (b) California purchasers, or (c) other actions affecting sales in California constitute

unlawful and unfair acts and practices and unfair methods of competition in violation of

California Business and Professions Code § 17200. The unlawful practices include, without

limitation, violations of the Copyright Act, the Sherman Act, theft of trade secrets and tortious

interference with business expectancy. Such actions threaten substantial harm to competition,

affecting trade and commerce in California.

DET_C\476962.30 41

132. These wrongful acts have proximately caused and will continue to cause

Compuware substantial injury, including loss of customers, dilution of goodwill, confusion of

potential customers, injury to its reputation, and diminution in value of its confidential

information. Such actions are also oppressive and constitute actual or incipient violations of the

antitrust laws. These actions will cause imminent and irreparable harm and injury to

Compuware, which has thereby has been injured by IBM in its business and property.

133. IBM continues to engage in such practices. If IBM is not enjoined, IBM’s actions

threaten to substantially injure the public, Compuware, other ISVs, and purchasers of the

mainframe software tools. Compuware is without an adequate remedy at law.

134. Compuware is entitled to an injunction restraining IBM, its officer, agents,

employees and all persons acting in concert with them from engaging in further unlawful

conduct.

135. Compuware is further entitled to recover from IBM the gains, profits, advantages,

and unjust enrichment it has obtained as a result of its wrongful acts as hereinabove alleged.

136. The conduct of IBM was and is fraudulent, oppressive, malicious and in

conscious disregard of the rights of Compuware, and Compuware is therefore entitled to punitive

damages against IBM.

NINTH CLAIM FOR RELIEF

Unfair Competition

(Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. § 42-110b.)



DET_C\476962.30 42

138. Compuware and IBM have engaged in the conduct of trade or commerce in the

state of Connecticut through their substantial sales of the mainframe software tools to persons in

Connecticut. If not enjoined, IBM’s practices described above will significantly affect and

restrain sales of the mainframe software tools in Connecticut.

139. Through the acts and practices described above involving or related to

Connecticut purchasers or affecting sales in Connecticut, IBM is willfully engaging in unfair

methods of competition and unfair acts and practices in the conduct of trade or commerce in

violation of Conn. Gen. Stat. § 42-110b. IBM’s continuing actions are anticompetitive, unethical

and oppressive, and threaten to cause substantial injury to Compuware, other ISVs and

purchasers of the mainframe software tools, in actual or incipient violation of the antitrust laws.


and that Compuware receive actual and punitive damages and its costs and attorneys’ fees.

TENTH CLAIM FOR RELIEF

Unfair Competition

(Nebraska Consumer Protection Act, Neb. Rev. Stat. §59-1602)




state of Nebraska through their substantial sales of the mainframe software tools to persons in

Nebraska. If not enjoined, IBM’s practices described above will significantly affect and restrain

sales of the mainframe software tools in Nebraska.

143. IBM’s practices described above involving or related to Nebraska purchasers or

affecting sales in Nebraska are unfair acts and practices and unfair methods of competition in

DET_C\476962.30 43

violation of Neb. Rev. Stat. §59-1602. Such actions threaten competition, affecting trade and

commerce in Nebraska, and constitute actual or incipient violations of the antitrust laws. Such

actions are anticompetitive and are not reasonable business practices.

144. These continuing practices threaten to substantially injure the public, Compuware,

other ISVs and purchasers of the mainframe software tools.

145. Compuware has been injured by IBM thereby in its business and property.


and that Compuware receive its actual damages and its costs and attorneys’ fees.

ELEVENTH CLAIM FOR RELIEF

Unfair Competition

(North Carolina Unfair Methods of Competition, N.C. Gen. Stat. § 75-1.1)




software tools to persons in the State of North Carolina. If not enjoined, IBM’s practices

described above will significantly affect and restrain the sales of mainframe software tools in

North Carolina.

149. IBM’s practices described above involving or related to purchasers in North

Carolina or affecting such sales in North Carolina constitute unfair methods of competition in

violation of N.C. Gen. Stat. § 75-1.1. These continuing practices are anticompetitive, unethical

and oppressive, actual or incipient violations of the antitrust laws, involve an inequitable

assertion by IBM of its market power and position, and threaten to cause substantial injury to

Compuware, ISVs and purchasers of the mainframe software tools.

DET_C\476962.30 44



TWELFTH CLAIM FOR RELIEF

Unfair Competition

(South Carolina Unfair Trade Practices Act, S.C. Code Ann. § 39-5-20)




software tools to persons in South Carolina. IBM’s practices described above will significantly

affect and restrain the sales of mainframe software tools in South Carolina.

153. Through the acts and practices described above involving or related to South

Carolina purchasers or affecting sales in South Carolina IBM has willfully and knowingly

engaged in unfair acts or practices and unfair methods of competition in violation of S.C. Code

Ann. § 39-5-20. These continuing practices are anticompetitive, unethical and oppressive, actual

or incipient violations of the antitrust laws, and threaten to cause substantial injury to

Compuware, ISVs, purchasers of the mainframe software tools and the public interest. Such

practices have the potential for repetition.



DET_C\476962.30 45

THIRTEENTH CLAIM FOR RELIEF

Unfair Competition

(Tennessee Consumer Protection Act, Tenn. Code Ann. § 47-18-104)




state of Tennessee through their substantial sales of the mainframe software tools to persons in

Tennessee. If not enjoined, IBM’s practices described above will significantly affect and restrain

sales of the mainframe software tools in Tennessee.

157. Through the acts and practices described above involving or related to Tennessee

purchasers or affecting sales in Tennessee, IBM has willfully or knowingly engaged in unfair

acts and practices in the conduct of trade or commerce in violation of Tenn. Code Ann. § 47-18-

104. IBM’s continuing actions threaten to cause substantial injury to Compuware, other ISVs

and purchasers of the mainframe software tools, in actual or incipient violation of the antitrust

laws.

158. If IBM is not restrained from continuing such practices, Compuware will continue

to suffer substantial injury.


and that Compuware receive treble damages and its costs and attorneys’ fees.

DET_C\476962.30 46

FOURTEENTH CLAIM FOR RELIEF

Unfair Competition

(Utah Unfair Practices Act, Utah Code Ann. § 13-5-2.5)




software tools to persons in Utah. If not enjoined, IBM’s practices described above will

significantly affect and restrain the sales of the mainframe software tools in Utah.

162. IBM’s practices described above involving or related to Utah purchasers or

affecting sales in Utah are unfair methods of competition in violation of Utah Code Ann. § 13-5-

2.5. Such actions threaten competition, affecting trade and commerce in Utah, and constitute

actual or incipient violations of the antitrust laws. Such actions are anticompetitive and are not

reasonable business practices.

163. These continuing practices threaten to injure the public, Compuware, other ISVs

and purchasers of the mainframe software tools.



FIFTEENTH CLAIM FOR RELIEF

Unfair Competition

(Washington Unfair Methods of Competition, Wash. Rev. Code 19.86.020)



DET_C\476962.30 47


software tools to persons in Washington. If not enjoined, IBM’s practices described above will

significantly affect and restrain the sales of the mainframe software tools in Washington.

167. IBM’s practices described above involving or related to Washington purchasers or

affecting sales in Washington are unfair acts and practices and unfair methods of competition in

violation of Wash. Rev. Code 19.86.020. Such actions threaten competition, affecting trade and

commerce in Washington, and constitute actual or incipient violations of the antitrust laws. Such

actions are anticompetitive and are not reasonable business practices.

168. Compuware has thereby been injured by IBM in its business and property.

169. IBM continues to engage in such practices. If IBM is not enjoined, IBM’s actions

will continue to injure Compuware, other ISVs, purchasers of the mainframe software tools and

the public.



PRAYER FOR RELIEF

Wherefore, Compuware prays for judgment against IBM as follows:

1. That the Court enter judgment in favor of Compuware on all the claims for relief

set forth herein, including but not limited to judgments that:

(a) IBM has infringed Compuware’s copyrights in its mainframe software

tools;

(b) IBM has misappropriated Compuware’s trade secrets in its mainframe

software tools;

DET_C\476962.30 48

(c) IBM be has intentionally interfered with Compuware’s contractual

relations by inducing a breach of the confidentiality agreement(s) between Compuware and its

employee(s) or former employee(s);

(d) IBM has violated Sections 1 and 2 of Sherman Act;

(e) IBM has tortiously interfered with Compuware’s economic expectancy;

and that

(f) IBM has committed unlawful, unfair, and fraudulent business practices in

violation of the laws of California, Connecticut, Nebraska, North Carolina, South Carolina,

Tennessee, Utah and Washington

2. That IBM, its directors, officers, agents, servants, employees, and all other

persons in active concert of privity or in participation with them, be enjoined from directly or

indirectly infringing Compuware’s copyrights in its mainframe software tools or continue to

market, offer, sell, dispose of, license, lease, transfer, display, advertise, reproduce, develop or

manufacture any works derived or copied from Compuware’s mainframe software tools or to

participate or assist in any such activity.

3. That IBM, its directors, officers, agents, servants, employees, and all other

persons in active concert or privity or in participation with them, be enjoined to return to

Compuware any originals, copies, facsimiles or duplicates of Compuware’s mainframe software

tools in their possession, custody or control.

4. That IBM be enjoined to recall from all distributors, wholesales, jobbers, dealers,

retailers, non-Compuware-licensed customers and distributors, and all others known to IBM any

originals, copies, facsimiles or duplicates of any works shown by the evidence to infringe any

Compuware copyright.

DET_C\476962.30 49

5. That IBM be enjoined to deliver upon oath, to be impounded during the pendancy

of this action, and for destruction pursuant to judgment herein, all originals, copies, facsimiles, or

duplicates of any works shown by the evidence to infringe any Compuware copyright.

6. That IBM be required to file with the Court and to serve on Compuware within 30

days after service of the Court’s order as herein prayed, a report in writing under oath setting

forth in detail the manner and form in which IBM complied with the Court’s order.

7. That IBM be enjoined from tying the sale of its mainframe software tools with its

mainframe operating systems and basic software.

8. That IBM be enjoined from delaying the release of information pertaining to its

releases of DB2, CICS, COBOL, PL/I and C/C++ to Compuware and other ISVs.

9. That IBM be enjoined from interfering with Compuware’s business expectancy

by disparaging or otherwise encouraging or causing its customers not to purchase Compuware’s

mainframe software tools.

10. That IBM be enjoined from further actions in support of the anticompetitive

practices set forth above.

11. That judgment be entered for Compuware against IBM, for Compuware’s actual

damages according to proof, and for any additional profits attributable to infringement of

Compuware’s copyrights, in accordance with proof.

12. That judgment be entered for Compuware against IBM, for statutory damages

based upon IBM’s acts of infringement, pursuant to the Copyright Act of 1976, 17 U.S.C. § 101,

et seq.

13. That IBM be required to account for all gains, profits, and advantages received

from its acts of infringement and for its other violations of law.

DET_C\476962.30 50

14. That all gains, profits, and advantages derived by IBM from its acts of

infringement and other violations of law be deemed to be in constructive trust for the benefit of

Compuware.

15. That judgment be entered for Compuware and against IBM , trebling the damages

awarded.

16. That Compuware be awarded punitive and exemplary damages against IBM.

17. That Compuware have judgment against IBM for its costs and attorneys fees.

18. That the Court grant such other, further, and different relief as the Court deems

proper under the circumstances.

JURY DEMAND

Plaintiff Compuware hereby demands a jury trial on its Complaint.

DATED: March ___, 2002 FENWICK & WEST LLP

By:_________________________Daniel Johnson, Jr.

HONIGMAN MILLER SCHWARTZ AND COHN LLP

By:_________________________

David A. Ettinger (P26537)

Attorneys for Plaintiff

COMPUWARE CORPORATION


Documents

Complaint For Copyright Infringement, Misappropriation Of Trade