INTELLECTUAL PROPERTY: An Idea Worth $833 Million

The dispute between IBM and Fujitsu, the most powerful Japanese firm in the mainframe-computer market, has been one of the biggest copyright battles ever. Last week arbitrators disclosed a settlement in the case, which began in 1982 when IBM accused Fujitsu of illegally copying Big Blue operating-system software to use in the Japanese manufacturer’s IBM-compatible machines. Based on a secret accord reached a year ago, Fujitsu is paying IBM $833 million for use of the software. Until 1997, Fujitsu will also pay an annual fee that may reach $51 million next year.

Fujitsu will benefit by getting a limited look at IBM’s software, which some analysts consider a major concession by the U.S. company. But others see the settlement as an IBM victory. Says Jonathan Fram, a Bear Stearns analyst: “It’s a masterstroke by IBM because they got their main rival to admit that it stole from them.”