Court Agrees With Compuware, Sanctions IBM

IBM to Bear Additional Discovery Costs For "Gross Negligence"

DETROIT--September 27, 2004--Compuware Corporation (NASDAQ: CPWR) today announced that the U.S. District Court for Eastern Michigan has sanctioned IBM for "gross negligence" in the software piracy portion of Compuware’s case against the technology giant.

Compuware originally brought suit against IBM in March of 2002 for theft of Compuware software. Additionally, the Compuware suit alleges that IBM is unfairly using its monopoly power in mainframe hardware and software products to compete unlawfully in the software tools markets.

As part of the normal discovery process, the court ordered IBM to produce source code for certain of its software products in July of 2002. In a variety of oral pleadings and sworn statements, IBM lawyers and employees claimed that the requested source code did not exist. On August 11, 2004--in direct contrast to these sworn statements and less than 90 days before the scheduled start of trail--IBM delivered this source code to Compuware. According to IBM’s lawyers, the source code was discovered "in a closet" in Australia.

"The costs for…redepositions and for the expert to re-analyze the code is going to be borne by IBM," said Magistrate Judge Wallace Capel, Jr. in a September 1 hearing. "I do think it’s negligence, gross negligence probably….IBM is going to pay for the cost for this motion. They’re going to pay the cost for the re-depositions of those experts and for the cost of the analysis on it."

"I’m glad that the court saw through IBM’s gamesmanship and attempt to saddle Compuware with additional costs and burdens. Obviously, the two years it took IBM to get this code out of the closet could provide an awful lot of time to do a number of things," said Thomas M. Costello, Jr., Compuware General Counsel. "We have a very strong case, and we are anxious for a jury to hear our claims."

For the Complete Order on Compuware’s Motion

IBM 09 15 04 order re CW motion for discovery sanctions [PDF - 100 KB]
IBM 09_01_04_Hearing_Transcript [PDF - 2,694 KB]

Compuware Corporation
Compuware Corporation (NASDAQ: CPWR) maximizes the value IT brings to the business by helping CIOs more effectively manage the business of IT. Compuware solutions accelerate the development, improve the quality and enhance the performance of critical business systems while enabling CIOs to align and govern the entire IT portfolio, increasing efficiency, cost control and employee productivity throughout the IT organization. Founded in 1973, Compuware serves the world's leading IT organizations, including more than 90 percent of the Fortune 100 companies. Learn more about Compuware at http://www.compuware.com.