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November 23, 2022updated 24 Nov 2022 10:13am

Micro Focus: IBM mainframe copyright lawsuit ‘entirely without merit’

The UK software company is preparing to fight IBM's claim in court. The case could have wider implications in the mainframe migration market.

By Matthew Gooding

Micro Focus is preparing to fight IBM in court, describing a copyright lawsuit claim brought by Big Blue this week as entirely without merit. The lawsuit could have a wider impact on the mainframe migration market, where Micro Focus is dominant.

Micro Focus will fight IBM in court over alleged copyright infringement. (Photo by T. Schneider/Shutterstock)

IBM announced it was suing Micro Focus yesterday, alleging it had copied code from the company’s software and that this constituted “illegal opportunism, wilful infringement, and blatant breach” of its contractual obligations, which “undermines IBM’s significant investments in software innovation”.

The claim focuses on a particular aspect of IBM’s CICS Transaction Server (CICS TS) software, which allows businesses to link mainframe systems up to web-based services to transfer information back and forth. IBM’s court filing alleges that Micro Focus, a long-term member of the IBM partner programme Partner World, used its status to copy code from CICS TS to use in its own software package, Micro Focus Enterprise. The partner agreement between IBM and Micro Focus was terminated in August.

IBM accused Micro Focus of “brazenly stealing” its work, and is seeking damages as well as an injunction to stop Micro Focus “illegally distributing” the copied software. But today the UK software hit back with a statement of its own.

“We believe the claims contained in the complaint to be entirely without merit,” the statement, released this afternoon, said.

“For more than 40 years Micro Focus has been delivering innovation to customers, and we will robustly defend our intellectual property. We look forward to addressing what we consider to be baseless allegations through all available legal channels.”

Micro Focus is in the process of being purchased by Canadian company OpenText in a $6bn deal, and the statement added that this court action would have “no impact” on the acquisition.  

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“The proposed acquisition of Micro Focus by OpenText and receipt of the associated regulatory approvals are on track for completion in the first calendar quarter of 2023,” it said. “We expect these claims to have no impact on the completion of the transaction.”

Wider implications of the IBM Micro Focus lawsuit

It is the second time IBM has filed a lawsuit relating to its mainframe IP allegedly being stolen this year. In March it launched action against Swiss company LzLabs, saying it had infringed several mainframe-related patents. This action is ongoing.

Micro Focus Enterprise is widely used by the hyperscalers – Amazon’s AWS, Microsoft Azure and Google Cloud, for re-platforming mainframe services to the cloud, and Steve Dickens, senior analyst at Futurum Research, said victory for IBM in the lawsuit would leave a gap in the market.

“There are a number of different players in this space, but most of them are small companies of 20-50 employees and turnover of sub-$40m,” Dickens says. “The big behemoth in that re-platforming space is Micro Focus.”

Dickens says there is no obvious replacement for Micro Focus if it were to be excluded from the market. He says IBM itself is making some moves into cloud development through its Wazi service, while AWS acquired its own migration platform last year in the form of Blu Age.

But, he says, the market is dominated by Micro Focus. “Up until now it’s been a loose federation of ecosystem partners with Micro Focus the whale in that ocean,” Dickens explains. “Major organisations are going to look to big, well-proven, financially stable software providers to enable their re-platforming efforts. Given the criticality of the workload, Micro Focus stands out as the only publicly listed, multi-hundred-million-dollar turnover, business.”

He adds: “If IBM allegations prove well founded, the impact on that ecosystem will potentially be far greater than the blast radius being contained purely to Micro Focus.”

Read more: IBM acquires Databand to improve machine learning models

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