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.
PRESUMED HEIR TO IBM'S CEO HAULED OFF BY FEDS FOR INSIDER TRADING
IBM won't have Bob Moffat on deck to replace Sam Palmisano now that Moffat's been indicted for insider trading. The IBM executive has resigned, effective October 31, saying (with the help of his lawyers) that he had retired from the computer business and was going to make his defense a full-time occupation. The surrounding case that got most of the headlines is the one that killed off hedge fund Galleon and put its founder and boss, Raj Rajaratnam at the center of an insider trading scam.
It may yet turn out that Moffat will be able to avoid a criminal conviction if the prosecutors picked him up primarily to flip him and get him to rat out other defendants. If that is the case Moffat could end up naming parties who have not yet been indicted, even folks who also are connected with IBM.
IBM quickly filled the gap in its executive ranks by naming Rod Adkins senior veep for technology, meaning the boss of the hardware business. Adkins is amply qualified for what is one of the toughest jobs at IBM.
Adkins official IBM biography says:
Rod Adkins leads all of IBM's global server and storage systems hardware and software development. He also leads the microelectronics business which includes semiconductor process technology development and semiconductor manufacturing operations for microprocessors and application specific integrated circuits used by IBM and its OEM clients.
Mr. Adkins has held a number of product development, business operations and general management positions since joining IBM in 1981. He has experience in Printers, Personal Computers, Servers, Storage and Software. Mr. Adkins has served as General Manager for Desktop Systems in Personal Systems Group; for UNIX systems in Server Group; and for Pervasive Computing in Software Group.
As a member of IBM's Performance and Technology Teams and the Board of Governors for the IBM Academy of Technology, Mr. Adkins helps drive IBM's corporate and technical direction. He is a member of the National Academy of Engineering (NAE), Executive Leadership Council (ELC), and National Society of Black Engineers (NSBE). He is also a member of the board for the National Action Council for Minorities in Engineering (NACME), the Smithsonian Institution and Pitney Bowes, Inc.
Moffat was a powerhouse, as the following biography, no longer on the IBM website, indicates.
Robert W. Moffat, Jr. is senior vice president and group executive, IBM Systems and Technology Group. Named to this position in July 2008, Mr. Moffat is responsible for all IBM hardware offerings as well as the microelectronics division, which translates IBM research and development into semiconductor solutions for IBM systems and OEM clients. In addition, the company's integrated supply chain operations, which include global manufacturing, procurement and customer fulfillment, report to him.
Mr. Moffat was senior vice president, Integrated Operations. In this cross-functional role created in July 2005, he led an initiative to transform and integrate the company's supply chain and service delivery operations globally, leveraging new business process designs and advanced technology to achieve greater levels of efficiency while improving IBM's market responsiveness.
Prior to that, Mr. Moffat was senior vice president and group executive of IBM's Personal and Printing Systems Group, where he was responsible for worldwide sales, development, manufacturing and marketing of Personal Computers, Printing Systems and Retail Store Solutions. Before that, he was vice president, finance and planning for the Enterprise Systems Group.
Mr. Moffat has held a number of executive positions at IBM, including general manager of manufacturing, fulfillment and procurement initiatives for the PC business. He led the team that pioneered the Advanced Fulfillment Initiative, and channel collaboration initiatives, which were awarded the 1999 Franz Edelman Award, the highest recognition for achievement in operational research and management sciences, and supply chain management.con
