Tech giant IBM kicks off London legal fight with Swiss software firm Lzlabs

Tech giant IBM is kicking off its legal battle against Swiss software company Lzlabs in the English High Court today over allegations of reverse-engineering.

IBM believes that since 2013 when it licensed its mainframe software to Lzlabs subsidiary Winsopia, the defendant reverse-engineered the IBM system to create its own product.

IBM UK, a subsidiary of its US parent company IBM Corp, alleges that Lzlabs software enables customers to take applications developed for IBM mainframe computers and run them without the need for source code change.

Zurich-headquartered Lzlabs denies denies any improper activity. It says its development of the Software Defined Mainframe (SDM) to make programmes built for a mainframe compatible with other platforms is protected by European and UK laws that promote innovation and competition in the tech industries.

It argues that Winsopia did not breach the terms of its licence, and that the development of the SDM
was lawful. According to LzLabs, its programme was built after years of observing, studying and testing the underlying principles of how customer applications interact with IBM’s mainframe.

The case was originally filed to the High Court in September 2021, going through several rounds of amendments to claim and defence forms.

In a case that will have the focus of the Tech industry, the trial kicks off on Monday at the Technology and Construction Court (TCC) of the High Court. It’ll be heard before Mrs Justice O’Farrell over the court of 28 working days.

There is a parallel litigation happening over Stateside in Texas, as IBM filed legal action against LzLabs and Texas Wormhole for what it stated as misuse of its intellectual property.

According to a claim form filed to the Western District of Texas, IMB Lzlabs’s owners John Moores and Thilo Rockmann were “engaging in a scheme to free-ride on IBM’s mainframe business”.

IBM’s legal team consists of Quinn Emanuel’s partners Kate Vernon and Greg Pantlin with leading silks from Brick Court Chambers Nicholas Saunders KC and Craig Morrisons KC.

While Lzlabs has opted for Clifford Chance partners Kate Scott and Vanessa Marsland with leading silk from 4 New Square Roger Stewart KC and 11 South Square’s Mark Vanhegan KC.