US Supreme Court sides with IBM in the ruling that said BMC "lost out to IBM fair and square"

IBM received good news from the US Supreme Court in its fight with software maker BMC. In a ruling, the US Supreme Court declined to hear a contract dispute between IBM and BMC Software, leaving intact a prior $1.6 billion judgment in favor of BMC unresolved. BMC had sought the Supreme Court's intervention to review a decision by the 5th U.S. Circuit Court of Appeals, which had reversed BMC's victory against IBM. In the initial case, BMC convinced a lower court that IBM had illegally substituted BMC's mainframe software with its own at AT&T, leading to the substantial award. However, the 5th Circuit nullified this ruling in April of the previous year, stating that BMC had fairly lost its contract to IBM. The US SC ruling had then said that BMC had "lost out to IBM fair and square."

Neither spokespeople nor attorneys from BMC or IBM provided immediate comments on the Supreme Court's decision. Similarly, AT&T, which was not a party to the lawsuit, did not respond to inquiries. BMC, a Houston-based company, specializes in developing and licensing proprietary mainframe software. It had an agreement with IBM that included a "non-displacement" clause, intended to prevent IBM from replacing BMC’s software with its own among BMC’s clients. Under this agreement, AT&T employed IBM to oversee its mainframe operations. BMC later sued IBM in Houston federal court, alleging a breach of contract when AT&T switched to IBM’s software.
In 2022, U.S. District Judge Gray Miller ruled that IBM should pay BMC $1.6 billion for violating their agreement, asserting that IBM had covertly planned to supplant BMC’s software at AT&T during the 2015 negotiations of the non-displacement clause. The 5th Circuit’s reversal came with a finding that AT&T independently opted to change its software provider, uninfluenced by IBM.
In its appeal to the Supreme Court, BMC warned that the 5th Circuit’s ruling could harm businesses, particularly in the tech industry across the Fifth Circuit, where licensing restrictions are vital. Conversely, IBM urged the Supreme Court to reject BMC’s petition, aiming to conclusively terminate BMC's efforts to reinstate the large financial award.