IBM wins UK lawsuit against LzLabs for mainframe intellectual property theft

IBM licensed its mainframe software to Winsopia beginning in 2013, according to the court documents. “IBM’s primary case is that the defendants breached, or procured breach of, the ICA [IBM customer agreement], using Winsopia’s access to the IBM mainframe software to develop the SDM by unlawful reverse engineering of the licensed software,” the court wrote.

LzLabs deliberately misappropriated IBM trade secrets by reverse engineering, reverse compiling and translating IBM software, IBM claimed. IBM also alleged that LzLabs has made false and misleading claims about the capabilities of LzLabs’ products. 

In the court filing, the judge wrote that “Winsopia breached that ICA and that LzLabs and Moores unlawfully procured the above breaches of the ICA by Winsopia.”

The March 10 ruling followed a 2024 trial. Another hearing at an undetermined date will determine damages or further actions, the court stated.

IBM previously noted LzLabs is owned and run by some of the same individuals who owned and ran Neon Enterprise Software, LLC of Austin, Texas.

“Neon previously attempted to free ride on IBM’s mainframe business, and prior litigation between IBM and Neon ended with a U.S. District Court permanently barring Neon and certain of its key employees from, among other things, reverse engineering, reverse compiling and translating certain IBM software, and also from continuing to distribute certain Neon software products,” IBM wrote.