LzLabs UK subsidiary Winsopia breached the terms of its IBM software licence
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IBM wins UK High Court battle against LzLabs over trade secrets
IBM has secured a significant legal victory in a London court against Swiss-based LzLabs, a company backed by US tech entrepreneur and philanthropist John Moores, following allegations of trade secret misappropriation.
The High Court ruled on Monday that LzLabs and Moores unlawfully obtained and used IBM’s proprietary mainframe software. The case, reported in Computing last year, centred on LzLabs’ UK subsidiary, Winsopia, which had purchased an IBM mainframe computer and agreed to a software licence in 2013. IBM argued that this access was exploited to reverse-engineer its software, a claim that the court largely upheld.
Judge Finola O’Farrell determined that Winsopia had breached the terms of its IBM software licence and that LzLabs and Moores had knowingly facilitated these breaches. However, the court dismissed IBM’s claims against another British subsidiary, LzLabs Limited, as well as the company’s current and former chief executives.
IBM said in a statement: “IBM is delighted that the Court has upheld our claims against Winsopia, LzLabs GmbH and John Moores. The Court found that these parties had conspired to breach Winsopia’s licence agreement in a deliberate, systematic and intentionally hidden effort to unlawfully reverse engineer critical IBM mainframe technology. This technology represents billions of dollars of IBM investment.”
LzLabs had contested the allegations, maintaining that its software was independently developed over nearly a decade. Despite this defence, the court sided with IBM, concluding that the company’s intellectual property had been unlawfully accessed.
The ruling follows a trial last year to determine liability, with a subsequent hearing set to assess the damages owed to IBM.
LzLabs for a has not yet responded to a request for a statement on the verdict.
