BMC Sues ServiceNow, Claims Widespread Patent Infringement

BMC Software accused IT management software industry rival, ServiceNow, of building much of its business with intellectual property that infringes on BMC's patents, according to court documents.

Houston, Texas-based BMC claims ServiceNow took technology protected by at least seven patents issued to BMC between 1999 and 2014, according to a lawsuit it filed Tuesday in a Texas federal court. The complaint alleges Santa Clara, Calif.-based ServiceNow hired former BMC engineers and sales professionals to implement those patented technologies as the company targeted its rival's business.

The legal action should be welcomed by BMC's channel partners, according to BMC's general counsel, Patrick Tagtow.

[ Related: BMC Going Private in $6.9 Billion Deal]

"They are certainly a beneficiary of this lawsuit by us protecting our innovations and paving the way for us to innovate in the future," Tagtow told CRN.

BMC has spent about $8 billion on research and development over the last 34 years for products that monitor, automate, orchestrate, repair and manage on-premise and cloud-based business IT infrastructure, the complaint stated.

BMC has received some 235 patents and has about another 100 pending approval, according to Tagtow.

ServiceNow owns no patents, according to BMC, yet sought to aggressively challenge BMC in the IT service software market. Part of its strategy involved intentionally taking short-term losses on competing products to undercut its rival, a luxury ServiceNow could afford more easily without billions in R&D costs, according to the complaint.

The lawsuit claims "each significant aspect of ServiceNow’s business is built around infringement of BMC’s patents" -- technologies ServiceNow touted on its website.

Those technologies, and the seven related patents at issue, fall under the broad categories of incident management, problem management, performance analytics, configuration management, discovery, orchestration and change and release management.

Colleen Haikes, ServiceNow's director of public relations, told CRN, "We have just received a copy of this complaint and we are evaluating the claims. We intend to vigorously defend the lawsuit."

Haikes declined further comment on the case or what impact it may have on VARs that have partnered with the company.

Tagtow told CRN the lawsuit wasn't triggered by one development and was instead the culmination of a pattern of behavior and activities from ServiceNow by which they approached the market "and came to look more and more like BMC."

BMC earlier this year convened a group of experts to diligently study its own patent portfolio after becoming increasingly concerned by its rival's business practices. That review lasted several months and led to a "belief of broad, widespread infringement," Tagtow said.

The seven patents cited in the lawsuit were the clearest examples of infringement upon "very foundational patents in this area of technology," Tagtow said.

The complaint cites inflammatory language from ServiceNow CEO Frank Slootman about the rivalry in which he boasted in public interviews that ServiceNow has "been dismantling [BMC's] business left, right and center," has "taken the whole company down" and is "going to drive a truck right through" BMC's future. It also quotes ServiceNow founder Frank Luddy from a videotaped interview he gave last year in which he explained the ’secret sauce’ behind ServiceNow’s business was derived from the maxim: ’good artists copy and great artists steal."

"I’ve been a thief all my life. I’m going to admit it right here, right on camera, live," Luddy said during that interview.

PUBLISHED SEPT. 23, 2014