A US judge ruled IBM must pay BMC Software $1.6 billion for replacing the company’s software with its own on AT&T’s mainframes, Bloomberg reported.

After a seven-day trial concluded in March, the judge ruled IBM owed BMC for fraud and contract violations.

AT&T was a mutual customer. In 2015, IBM and BMC agreed to several amendments including an Outsourcing Attachment (OA) prohibiting the former from moving such customers to its own software.

BMC sued IBM for violating the agreement and other claims in 2017.

In a conclusion issued on 30 May, the court explained it had found “clear and convincing evidence that IBM fraudulently induced BMC into entering the 2015 OA so that it could exercise rights without paying for them, secure other contractual benefits, and ultimately acquire one of BMC’s core customers”.

“IBM did this intentionally”, it added.

Bloomberg reported AT&T shed BMC’s products for its own reasons, which IBM claimed was fair game under its pact.

IBM told Bloomberg the verdict was “entirely unsupported by fact and law” and it planned an appeal.

Patrick Tagtow, SVP and general counsel at BMC, told Mobile World Live the company is “pleased with the court’s ruling that establishes a foundation for BMC and our partner ecosystem to focus on customer success”.

“The integrity of our business and contracts is critical to being a strategic vendor and partner to our customers.”