By Barthel, Matt
American Banker , Vol. 157, No. 16
Kirchman Sues Fiserv over Software
Fiserv Inc., one of the nation's largest providers of computer services to banks, is facing a lawsuit that could cost it tens of millions of dollars in lost contracts.
Florida Software Services Inc., a unit of Orlando-based Kirchman Corp., claims that Fiserv is illegally using banking software obtained last February through the acquisition of Citicorp Information Resources.
The software, which runs on International Business Machines Corp. mainframe computers, is used at Fiserv's service bureau in Arlington Heights, Ill. The suit demands that Fiserv, based in West Allis, Wis., stop using the programs.
The plaintiff sued in a Florida court.
Hanging in the Balance
The Arlington Heights facility handles data processing and other back-office functions for 106 Midwestern banks. If Kirchman prevailed, any bank staying with Fiserv would have to undergo the painful process of converting to new software.
This case is the latest in a string of legal actions from software vendors seeking more control over their products.
As the consolidation of data centers and the acceleration of outsourcing contracts shrinks the pool of potential clients, software vendors like Kirchman and Computer Associates International Inc. - which is involved in a similar suit filed by EDS Corp. over software license transfer fees - are becoming much more vigilant in enforcing their contracts.
"Our motivation [for the suit against Fiserv] is to assert our control over what is our bread and butter," said J. …