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October 28, 1991


By CBR Staff Writer

On October 24, IBM Corp sued Comdisco Inc in Chicago’s US District Court asserting several charges stemming from Comdisco’s activities in the 3090 memory business, writes our sister publication Infoperspectives International. The suit says that Comdisco took apart IBM main memory boards of low capacity and reassembled the components to make boards of high capacity (CI Nos 1078, 1079). The high capacity boards are worth more money. Comdisco allegedly marked these boards the way IBM does and then passed them off as real IBM components, suitable for use in 3090 mainframes and eligible for IBM service. IBM is aware of at least 100 unauthorised boards – in four machines that have failed, although it hasn’t said all these boards came from Comdisco. (An IBM 3090 mainframe contains 64 memory boards and eight other circuit cards per processor cluster. A mainframe may have one or two clusters). IBM says it will not maintain such memory and that customers with unauthorised memory will have to replace it with approved circuitry if they wish to get IBM service on their machines – it will be replaced free only where IBM Credit Corp inadvertantly supplied to a new customer a machine that came in off lease and was later found to have the counterfeit memory in it. Comdisco does not dispute the facts in IBM’s complaint, although it may later disagree with some details. Comdisco knowingly sold memory made of IBM components but which were remanufactured by others, according to our sources. However, this activity appears to have occurred during only six or seven months, and it was curtailed by Comdisco under circumstances that shed a very different light on the situation than that cast by IBM’s allegations. On January 18 – six days before IBM filed its first Delaware lawsuit against Comdisco Comdisco wrote to IBM and said it was remanufacturing IBM memory boards using IBM components. Comdisco wanted IBM to inspect the boards and certify them for IBM maintenance under terms similar to those applied to other non-IBM components. IBM did not respond in writing, but an IBM executive did phone in late January, saying that he did not think IBM would provide maintenance on the boards. By that time, IBM and Comdisco were locked in legal combat over Comdisco’s subleasing and reconfiguration practices. By the end of January, Comdisco decided to stop selling remanufactured 3090 memory. It also modified its contracts to include a statement assuring customers that they would get IBM-approved components in processors sold by Comdisco.


Comdisco describes the new suit as nothing more than a continuation of IBM’s strategy to litigate as opposed to seeking a business solution that’s in the best interest of all parties. Chairman Kenneth Pontikes said in a statement Their methods are all too common, an inflammatory press release that attacks our character and seeks to undermine the relationships and reputation that we have built with our customers over the last 21 years. Comdisco views it as a travesty that it must engage its time, money and people defending itself against IBM’s further attempts to spread fear, uncertainty and doubt in the marketplace. The goal of IBM’s litigation strategies is to reduce competition and destroy the third-party leasing market. In our opinion, he said, any problems perceived by IBM regarding memory modification by Comdisco could have and should have been resolved by direct negotiation. IBM’s request for a preliminary injunction is unnecessary. Comdisco has no intention of engaging in these practices, Pontikes declared.

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