In Re IBM Peripheral EDP Devices, Etc.

SCHNACKE, District Judge.

Plaintiff, Transamerica Computer Company, Inc. ("Transamerica"), has alleged that certain activities of Defendant, International Business Machines Corporation ("IBM"), violated Section 2 of the Sherman Act which forbids the monopolization or attempted monopolization of any part of trade or commerce. [1]

An appreciation of the nature of the computer industry and the parties' respective roles is helpful to an understanding of, and indispensable to an evaluation of, that conduct.

Computers, like the punched card accounting equipment that preceded them, depend upon the capabilities of the electronic circuits. Because of the laws of physics involved, an electronic circuit, if properly designed, is capable of performing both arithmetic and logical functions. For instance, it is possible to design a circuit that will add two numbers together (an arithmetic function), and another circuit that will compare the result of the addition to a third number and choose between various alternatives on the basis of that comparison (a logical function). The sequence of arithmetic and logical functions that are to be performed is known as a program. With punched card…