Update: IBM Settles, Compuware Talks About Moving ForwardUpdate: IBM Settles, Compuware Talks About Moving Forward

IBM has agreed to a $400 million deal that settles a copyright-infringement suit filed by software-maker Compuware Corp., which accused IBM of stealing intellectual property and violating federal antitrust laws, both companies said Tuesday.

Under the agreement, which was reached five weeks into the federal trial of the suit in Detroit, IBM agreed to license a minimum of $140 million of Compuware software and $260 million in Compuware services over four years. In addition, the two companies entered into a cross-licensing agreement covering patents related to both companies' businesses.

The settlement ends all outstanding claims between the companies, including the pending litigation.

In its 2002 lawsuit, Compuware, based in Detroit, claimed IBM illegally obtained its trade secrets by hiring Compuware employees. The two companies compete in making software for IBM mainframe computers.

In addition, Compuware accused IBM of violating antitrust laws by requiring the use of its software in its mainframe products.

IBM, headquartered in Armonk, N.Y., denied any wrongdoing.

In a teleconference with reporters and analysts on Tuesday, Compuware chairman and chief executive Peter Karmanos Jr. said the agreement would benefit customers, shareholders and employees of both companies. In the case of Compuware, which had already spent about $95 million in legal fees, the settlement would cut its legal expenses by $20 million to $40 million a year.

"Everyone benefits but the attorneys," Karmanos said.

With an end to the litigation, Karmanos spoke in a conciliatory manner, saying Compuware looked forward to being a member of Big Blue's PartnerWorld program for software vendors.

"Our goal is to reach a premier level within PartnerWorld, which (IBM) said we could do in six months," Karmanos said. "We have competed very effectively against their products, and we're more interested in a partnership going forward that involves all of our products."

Under the agreement, IBM can use Compuware technology within its software, but won't be reselling the latter company's products, Karmanos said. So the companies will continue to compete in some markets.

In its use of Compuware services, IBM can use them internally in developing its own software, or as part of IBM Global Services.

"We'll provide services where ever they ask us to," Karmanos said.