US Report: IBM hit with Y2K suit

IBM Corp. is the latest major company to find itself in the cross hairs of a Y2K liability fight. Oakbrook, Ill., gynecologist Mario C. Yu has filed suit seeking class-action status on behalf of those who bought bundled software and hardware products from IBM and Raleigh, N.C.-based Medic Computer Systems Inc. -- specifically IBM's RISC 6000 computer running AIX 4.1 and version 7.0 of Medic's software. Medic makes products that track patient appointments and test results.

The suit -- filed in the U.S. District Court for the Northern District of Illinois -- claims health care providers could experience significant problems that could harm patients as a result of the non-compliant products. Attorneys called the problems related to the so-called Millennium Bug a "potential time bomb." According to the suit, Yu bought the products on Dec. 10, 1996, and had them installed in 1997 for a total of $19,336 (£11,700). Yu did not become aware of a potential Y2K problem until November 1998, and two weeks ago, he was notified that he could have the problem fixed -- for $2,410 (£1,470) the suit claims.

Yu is seeking compensatory and punitive damages and is asking a judge for an injunction requiring the company to notify all licensees of pending problems and issue a patch. According to the suit, about 60,000 health care providers use Medic's software, but it's unclear how many of those use it on an IBM machine.

Neither IBM nor Medic officials were immediately available for comment.

Yu is being represented by Chicago-based Gold & Rosenfeld and Gogel, Phillips & Garcia. Last week, the firms filed suit against Microsoft Corp. on behalf of a Naperville, Ill., consultant, claiming that its FoxPro development tool isn't Y2K compliant.

Companies are becoming increasingly fearful of Year 2000 litigation, as the problem date looms closer. Because many older systems read only the last two digits of the date, some may read "2000" as "1900" and malfunction. During a meeting with analysts earlier this year, Microsoft warned that upcoming Y2K suits could affect the company's stock in the coming quarters.

Meanwhile, another medical company last week settled a Y2K suit filed against it. Medical Manager agreed to provide a Y2K-compliant upgrade for free to the plaintiffs. And a high-profile Y2K contract dispute was settled Monday, when retailer J.Baker dropped its claim against Andersen Consulting involving a non-compliant system the consulting firm had recommended nearly 10 years ago.