IBM and LzLabs are to lock horns in a London court next week over Big Blue's claim of breach of contract relating to mainframes and the development of software to allow mainframe applications run on x86 server clusters.

The trial, due to open in the High Court on April 29, sees IBM taking legal action against Zurich-based LzLabs over its Software Defined Mainframe (SDM) platform. Big Blue's UK arm alleges the Swiss outfit used a subsidiary based in Britain to purchase an IBM mainframe and then reverse-engineered parts of it to enable the development of SDM.

IBM filed a separate lawsuit against LzLabs in a Texas court in 2022, as reported by The Register at the time, but this case is for infringement of patents and misappropriation of trade secrets, although essentially over the same issue. The US case is not expected to come to trial until later this year.

However, in the Texas court filing [PDF], IBM asserts that the LzLabs subsidiary, Winsopia, was set up by it as a shell entity for the sole purpose of acquiring a license to IBM's mainframe software from IBM UK in order to reverse-engineer it.

Big Blue claims the alleged move was unlawful and a breach of its contract terms, which expressly forbid reverse-engineering its products. It is not unusual for license agreements to contain a clause which prohibits or restricts reverse engineering in specific countries.

IBM also claims in the Texas suit that when it discovered the connection between Winsopia and LzLabs, it attempted to exercise its right to audit Winsopia's use of the mainframe software, but reckons this was refused, even though, or so it claims, this was also a license condition.

It is understood that IBM is seeking damages, along with a ruling from the court that LzLabs used unlawful methods to develop its SDM platform and that it be prevented from selling it to customers.

We asked LzLabs for an official statement regarding the Texas case, but it seems clear that the company aims to contest the claims that Winsopia breached its license agreement terms or that SDM was developed unlawfully.

In the High Court next week

When it comes to the UK case whose trial begins on Monday, The Register understands LzLabs intends to argue that reverse engineering is permitted under UK and EU law for the purposes of creating software compatible with or analogous to the original code, and that IBM is attempting to stifle competition.

SDM was announced by LzLabs in March 2016 as a technology that can enable customers to "move their legacy mainframe applications and data seamlessly to open Linux server and Cloud platforms."

The company claimed at the time that its software solution includes "a faithful re-creation of the primary online, batch and database environments, which enables unrivaled compatibility" and would allow them to dramatically reduce IT costs.

Part of the cost savings come from not having to rewrite applications to run on newer platforms, as SDM is claimed to allow customer mainframe programs "to operate without changes and without compromise to performance," and "without forcing recompilations of COBOL or PL/1 application programs or making complex changes to the enterprise business environment."

LzLabs has successfully marketed the platform to customers including Rogers Communications, MAN Truck & Bus, and Swiss telecoms operator Swisscom.

All of this could pose a threat to Big Blue, which still derives considerable revenue from its mainframe systems - now branded as IBM Z - and associated services. Many customers are understood to be seeking to move away from their mainframe systems, but the challenges of migrating what may be critical workloads to other platforms has often stymied any such efforts.

IBM also filed a lawsuit in 2022 against another IT company, Micro Focus, claiming it copied and reverse-engineered its CICS mainframe service to develop a rival product, the Micro Focus Enterprise Server.

In a statement regarding the case, IBM told us: "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."

The tech giant claimed that the 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 said. ®

https://www.theregister.com//2024/04/26/ibm_and_lzlabs_uk_trial/