Neon, the company behind zPrime, the software that helps users move legacy workloads to specialty engines and thereby reduce their metered software charges, has sued IBM in Federal Court. The case was filed in Austin, near Neon's home town, which is one of the cities served by the U.S. District Court for the Western District of Texas. The suit stems from allegations that IBM has falsely disparaged zPrime and misrepresented in a material and harmful way the software and maliciously disputed the legality of using it on IBM mainframes while knowing otherwise.
The key Federal law invoked by Neon is the Lanham Act. The Lanham act is part of U.S. trademark law, not antitrust law. It has been invoked in this matter because Lanham can bring a successful plaintiff substantial relief quickly and perhaps simply (compared to an antitrust suit, anyway). The law appears to fit the circumstances as described by Neon, although it is a safe bet that IBM will say Lanham has no applicability to this matter. Neon's Lanham hook has been sunk into the way IBM has disparaged zPrime and Neon in its effort to dissuade mainframe users from buying the product.
The Lanham act is named after a Texas Congressman, Fritz Lanham, who served (and got his law passed) during the Truman administration. The Lanham Act has been updated and amended during the more than six decades since its initial passage.
In recent years, IBM has been accused of antitrust violations by rivals such as Platform Solutions, which it bought and slaughtered, and T3, which is has not bought and not yet slaughtered. In its suit, Neon says IBM is probably violating antitrust law in the mainframe business, but Neon is not making any antitrust claims at this time. Neon views an antitrust suit against IBM as a morass. Instead, Neon is using its assertions about IBM's allegedly monopolistic practices to paint a dark picture of Big Blue's business practices. But that does not mean Neon's suit is confined to a Lanham claim. On the contrary: Neon has also invoked California's law against unfair competition and some related Texas law.
Neon is represented by the Houston firm Reynolds, Frizzell, Black, Doyle, Allen & Oldham.
Like Neon, IBM has already been talking up its side of the story in the business press, along the way conceding that zPrime really could save users a bunch of money. IBM told Bloomberg news that Neon's zPrime "is akin to a homeowner tampering with his electrical meter to save money." Neon would be unlikely to approve of the term tampering, but its complaint seems to say that IBM's practices are a bit like those of a utility company . . . if the utility company happens to be Gazprom.
