IBM and the Swiss startup company LzLabs met in a London court on Monday to dispute the creation of technology which enables the migration of mainframe applications into the cloud.
Big Blue claims that LzLabs used a subsidiary based in the UK to license and reverse engineer IBM’s mainframe software. This was allegedly done to help with the development of their Software Defined Mainframe (SDM) platform. IBM is aiming to get an injunction to block the SDM sales and to claim potential damages over the alleged contract breach.
However, LzLabs defends itself against these infringement claims of IBM’s intellectual property and counterclaims that the lawsuit from IBM is intended to suppress innovation and eradicate competition. The company shrugs off any misconduct accusations, arguing instead that IBM is endeavoring to tether customers to their software.
IBM stated that the case is aimed at ensuring fairness and safeguarding their intellectual property instead of suppressing competition.
“Winsopia is the latest in a series of linked entities that have for more than a decade sought to reverse engineer proprietary IBM mainframe software for their own commercial gain. They breached a contract that IBM UK entered in good faith and then delivered IBM technology for their parent company, LzLabs, to use in a product of its own,” said the statement.
“This case has nothing to do with restricting competition. The issue is the unlawful exploitation of technology that represents billions of dollars of investment, and IBM UK will vigorously protect itself against the actions of Winsopia and LzLabs,” it continued.
LzLabs’ defence rests on an interpretation of the EU Software Directive. The 1991 European directive, which has long been codified into UK law, allows third-party software developers to analyse products in developing alternatives providing they avoided copying the source code.
Mainframes, championed by IBM, emerged to dominate the nascent information technology market in the 1960s, and many large enterprises such as banks and telcos still rely on IBM’s mainframe technology, now known as IBM Z, to run key applications.
The expense of recreating applications is excessive, leading many substantial businesses to choose to manage them on their original platform. However, as mainframe skills are declining, with older mainframe savvy engineers retiring and younger developers more absorbed in creating workloads for cloud operations, this option becomes less viable.
Innovations like SDM could liberate enterprises from the dependence they currently have on IBM’s hardware and operating systems. Any decision that weakens the EU’s Software Directive’s applicability in the UK could potentially impact the broader UK technology industry.
In another lawsuit brought by IBM against LzLabs and Texas Wormhole in the US in March 2022, a trial is anticipated to take place in late 2022 or early next year. The case is centering on patent infringement allegations and misuse of trade secrets. These legally distinct allegations also pertain to Winsopia’s role and conduct in the creation of LzLabs’ Software Defined Mainframe.
The lawsuit filed in the UK is being tried in the Technology and Construction Court division of the High Court in front of Mrs Justice O’Farrell and is anticipated to last nine weeks.
