Software firm J.D. Edwards ( JDEC) took up where its merger partner PeopleSoft ( PSFT) apparently left off : filing a lawsuit against Oracle ( ORCL), claiming the database giant was trying to wreck the deal with a hostile tender of its own. Thursday evening, J.D. Edwards announced it had filed suit in a Colorado state court -- its headquarters are in Denver -- claiming that Oracle's $16-a-share offer for PeopleSoft was an attempt to ruin the merger between PeopleSoft and J.D. Edwards. The company said it would be filing a suit in a California court as well -- where PeopleSoft and Oracle are headquartered. The Colorado suit seeks $1.7 billion in compensatory damages and an unspecified amount of punitive damages. The suit also seeks an injunction prohibiting Oracle from going forward with its offer for PeopleSoft. The suit (announced a few minutes after Oracle's fourth-quarter earnings call started) comes as rhetoric heated up over the meaning of Oracle's offer for its applications rival. Earlier in the day, PeopleSoft CEO Craig Conway argued that Oracle CEO Larry Ellison's move may backfire. In a conference call, Conway suggested that confusion and anger over Oracle's tactics may give IBM ( IBM) and even Microsoft ( MSFT) a chance to siphon business from the database giant. "Some things have been written on SAP's ability to capitalize on this," said Conway, referring to the efforts of SAP to win over customers confused by the tumult . "But the real beneficiary of last week is more likely to be IBM." "It's the only significant competitor to Oracle in the database industry," he explained, noting IBM's database market share outranks that of Oracle. "The level of concern, frustration and outrage is so high that I think IBM has the opportunity to convert Oracle's customers into IBM customers. I think SAP's less the story than the opportunity this provides IBM and to some extent Microsoft with the SQL server database that has grown steadily in large corporations."