Fujitsu to Pay Big Premium for IBM Data : Arbitrators Resolve ’82 Suit; Cost Put in Hundreds of Millions
Fujitsu Ltd. will pay International Business Machines Corp. hundreds of millions of dollars for the use of information about the software that runs IBM mainframe computers, arbitrators announced today.
The arbitrators’ decision ends years of dispute between IBM, the world’s largest computer company, and Fujitsu, Japan’s biggest computer maker, over precious information about the internal workings of IBM’s large computers.
Fujitsu will pay IBM $237 million now and tens of millions of dollars each year beginning in 1989 under a complex pay-out plan devised by the arbitration team.
Today’s announcement is the biggest development in the IBM-Fujitsu controversy since September, 1987, when arbitrators announced the initial resolution of IBM’s charges that Fujitsu illegally copied IBM software. The American Arbitration Assn. had been holding secret hearings since then to work out the ground rules under which IBM must grant Fujitsu access to information about the software that runs IBM mainframes.
The rules set by two arbitrators will make it possible for Fujitsu to develop the complex, expensive software that controls the basic operations of IBM mainframes.
IBM, which dominates the world market for mainframe computers, is the only company writing the so-called operating system software for its own machines.
Information supplied by IBM will also make it easier for Fujitsu to develop its own line of mainframe computers that would compete with IBM’s by running the same programs. Fujitsu and Hitachi Ltd. are IBM’s two main competitors in that market. Hitachi is not covered by the terms of the IBM-Fujitsu deal.
IBM first accused Fujitsu in 1982 of illegally copying its mainframe operating software. The companies reached a private settlement in 1983, but that agreement fell apart and IBM in 1985 asked to have the dispute settled by binding arbitration.
IBM and Fujitsu have agreed to let the arbitrators supervise all disputes growing out of the case until the year 2002.
