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November 29, 1988

FUJITSU IN FOR $396m TO IBM FOR PAST, FUTURE USE OFMVS

By CBR Staff Writer

Wild talk of Fujitsu Ltd being ordered by the American Arbitration Association to pay IBM figures in the region of $1,100m turned out to be very wide of the mark when the arbitrators reported their binding findings yesterday, and in fact, having paid $158m in undisclosed fees since 1983, Fujitsu is in for only $675m more for past and future use of its rewrite of MVS – and that figure includes the right to inspect future releases of the operating system under tightly-controlled conditions. It appears that Fujitsu immediately owes IBM only $237m, because it has already paid or has credits for $158.9m, and that the rest of the sum represents future use payments, which will start at between $25.7m and $51.3m for 1989. The decision of the arbitrators is binding and cannot be appealed, but was anyway immediately welcomed by both parties, each of which is ordered not to make additional comments. But Fujitsu looks to be the clear winner, and seems likely now to seek to go into competition with IBM worldwide on system software, hitting at the company in the heart of its most profitable business. IBM, whose shares soared by $2.875 ahead of the announcement in hopes of a windfall, added just 12.5 cents on the news by lunchtime on a day when the market was strongly up.

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