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1/11/2010
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IBM: Customer Stiffed Us For $1.7 Million

Big Blue lawsuit claims Wall Street firm BGC improperly obtained multiple copies of its Informix database software.

IBM claims a New York-based brokerage downloaded more than $1.7 million worth of its Informix database software without paying for it.

In a lawsuit filed last week, IBM says the software was downloaded over the course of several years by BGC Partners' Euro Brokers unit, which BGC acquired in 2005. BGC itself was spun off from Cantor Fitzgerald in 2004.

Euro Brokers was a legitimate IBM Informix customer, but Big Blue claims the company obtained and copied more software than was authorized by its purchase agreement. The extra downloads were discovered during an audit conducted by KPMG, IBM says in papers filed in U.S. District Court for Southern New York.

"In September 2008, IBM sent BGC an invoice for $1,730,665.24 to account for certain unpaid license fees that BGC owed IBM for running the extra Informix copies. The invoice did not include all of the unpaid maintenance fees that BGC owes IBM for running the extra Informix copies," IBM states.

"BGC did not pay the September 2008 invoice," IBM says.

IBM said it offered BGC a new license in December, 2008, that would cover the additional software, but BGC rejected the plan. IBM terminated BGC's International Program License Agreement later that month.

BGC "has not destroyed its copies of Informix Software as required by the IPLA," IBM asserts. "In fact, BGC downloaded copies of additional Informix Software from IBM after December 31, 2008. That Informix Software is of significant value to IBM," the company says.

IBM is suing BGC for breach of contract and copyright infringement. It's asking the court to award it unspecified damages and issue an injunction that would impound all copies of Informix software that it believes were improperly downloaded by BGC.

Representatives from BGC and IBM contacted by InformationWeek.com declined to comment on the case.

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