Computer
The worlds biggest provider of computer services is violating the U.S. Lanham Act and state competition laws through its unfair practices, which are aimed at protecting a monopoly worth billions of dollars, closely held Neon said in its complaint filed yesterday in federal court in Austin, Texas.
“Having sold products to its customers without limitations on their use, IBM is attempting unlawfully and retroactively to impose such restrictions,” Neon said. The Austin-based company said it has lost tens of millions of dollars in potential sales because of IBMs tactics.
IBM began developing mainframe computers in the 1940s and 1950s and is now among the few companies offering the systems. The company has stifled competition by withholding licenses to run its operating system on rival hardware, the Computer & Communications Industry Association said in a report sent to the Justice Department in September.
T3 Technologies Inc., a company that builds mainframe computers and is mentioned in the CCIAs report, made a similar complaint against IBM to the European Commission this year.
No Innovation
“Neons claims have no merit and its product offers no innovation,” Tim Breuer, a spokesman for Armonk, New York-based IBM, said yesterday in an e-mail. “Neons software deliberately subverts the way IBM mainframe computers process data. This is akin to a homeowner tampering with his electrical meter to save money. IBM has invested billions of dollars in the mainframe this decade and we will vigorously protect our investment.”
Once the dominant form of computers, mainframes are still used by large organizations, such as banks, insurance companies and government agencies, in which thousands of people need quick access to different kinds of information at the same time. IBM had 85 percent of the $6.5 billion mainframe-hardware market last year, according to market researcher Gartner Inc.
The case is Neon Enterprise Software LLC v. International Business Machines Corp., 09-cv-896, U.S. District Court, Western District of Texas (Austin),