Comdisco Inc has denied allegations made by IBM that it has been stripping computers leased by IBM Credit Corp. Both IBM and IBM Credit Corp filed a suit in the Delaware Court of Chancery accusing Comdisco of taking IBM Credit Corp’s property and unjustly enriching itself by using that property in competition with IBM and IBM Credit. IBM says that Comdisco is engaged in a continuing process of taking products that it doesn’t own and using them as if it did. The products were installed with customers under lease from IBM Credit Corp, and IBM claims that they have since been wrongfully converted to Comdisco’s use in breach of those leases. IBM and Credit Corp are seeking an injunction to prevent what they describe as an ongoing conversion of IBM’s property; the resulting unjust enrichment of Comdisco; its ongoing tortious interference with IBM’s Credit’s contracts; its unfair competition; its deceptive trade practices; and its ongoing breach of contracts with IBM and IBM Credit’s lessees. The two companies are also seeking an accounting of all IBM Credit’s property that Comdisco has unlawfully acquired, subleased, sold or converted, and of profits unlawfully realized as a result of unauthorized copying and distribution of IBM software. Kenneth Pontikes, Comdisco’s chairman, claims that Comdisco is IBM Credit Corp’s toughest competitor. According to Reuters, he says that IBM is grossly and unfairly mischaracterising Comdisco’s practices in the used-computer marketplace. The company denies that it has engaged in any wrongdoing and intends to vigorously defend the matter. Industry sources suggest that IBM and Comdisco have been attempting to resolve issues such as replacement, reconfiguration and subleasing for a period of time, but their positions are said to be irreconcilable. IBM differs from its leasing rivals by insisting that machines are returned exactly as they were at the begining of a lease, rather than the like-for-like approach adopted by Comdisco, and the Wall Street Journal says that the lawsuit is an attempt to enforce those practices. Commentators believe that the lawsuit is unlikely to impact Comdisco in the short term, but if IBM focuses on an issue, it has industry-wide repercussions. In the long term, the court’s decision will probably affect system reconfiguration and microcode copyright, as well as the right to replace and substitute leased machines.
