Compuware Files Suit Against IBM for Misappropriation of Source Code in Mainframe Testing Market

FARMINGTON HILLS, Mich. -- March 12, 2002 -- Compuware Corporation (NASDAQ: CPWR) filed suit today in the U. S. District Court for the Eastern District of Michigan charging IBM Corporation with misappropriating and using Compuware intellectual property in IBM mainframe products. The Compuware complaint also contends that IBM has illegally used its monopoly power in mainframe hardware and software products to compete unfairly in the software tools markets. The suit further alleges unlawful tying by IBM in violation of the Sherman Antitrust Act.

"We have been considering this distressing issue for quite some time and regrettably concluded that Compuware was required to take this action in order to protect the interests of the company, its customers, and its shareholders," said Joseph A. Nathan, President of Compuware. "IBM has attempted to enter the mainframe software tools market and compete with Independent Software Vendors (ISVs) by misappropriating Compuware's source code and even copying our user manual. We are filing this lawsuit in an effort to stop IBM's illegal practices and promote open competition in the ISV marketplace," Nathan added.

Compuware is a leading ISV for IBM mainframes and distributed networks with high-quality and technologically advanced software applications for debugging and fault diagnosis. "Our applications provide faster, better, and more cost effective software solutions to help mainframe and distributed computer systems work more efficiently and effectively. IBM has begun leveraging its market dominance in mainframe computing in a monopolistic effort to capture revenues from the important and strategic ISV sector. IBM's actions threaten to interfere with the important product innovations provided by Compuware and other ISVs," said Nathan.

Specific contentions in the Compuware complaint include:

Copyright Infringement for Misappropriated Code

IBM has misappropriated and illegally used portions of Compuware copyrighted software products for IBM's new File Manager and Fault Analyzer products. The IBM products have many features that are substantially similar to Compuware's products and contain limitations and bugs that provide strong indications that Compuware's source code was copied. IBM's File Manager user manual includes numerous passages that are nearly verbatim copies of Compuware manuals.

Anticompetitive Scheme

For years, IBM provided companies such as Compuware with pre-release software and data to enable Compuware and other ISVs to develop more effective products that work with IBM software. This has strongly benefited IBM, Compuware and other ISVs and their customers, who need software tools that work well with IBM's hardware and software. Now that IBM has begun to compete with Compuware and other ISVs, IBM has severely restricted the free flow of this information to Compuware.

Unlawful Tying

IBM Global Services is a worldwide solutions provider to company IT departments, whose clients rely on IBM for objective information on software tools. IBM has now begun to steer clients away from the products of Compuware and other ISVs and instead directs clients to IBM products.

IBM has tied the purchase of certain mainframe software tools to the purchases of critical IBM software products. This practice threatens to substantially foreclose competition on the merits of and interfere with customer choice in each such market.

"Our sole mission with the lawsuit is to ask the courts to require fair play in the marketplace so that mainframe customers are free to select the software tools that provide the best value and performance," Nathan concluded.

Compuware Corporation

Compuware Corporation, a multi-billion dollar company, provides business value through software and professional services that optimize productivity and reduce costs across the application life cycle. Meeting the rapidly changing needs of businesses of all sizes, Compuware's market-leading solutions improve the quality, ease the integration and enhance the performance of distributed, e-business and enterprise software. Compuware employs more than 12,000 information technology professionals worldwide. For more information about Compuware, please contact the corporate offices at 800-521-9353. You may also visit Compuware on the World Wide Web at http://www.compuware.com/.