IBM Wins Lawsuit Against LzLabs Over Mainframe Patents

IBM has scored a legal victory in its lawsuit to protect its patents and intellectual property (IP) rights for the venerable mainframe.

It was in March 2022 when IBM had alleged that Switzerland-based company LzLabs was “repeatedly infringing upon company patents protecting various aspects of IBM’s high-performance mainframe systems, a core technology that clients depend on for their most important workloads.”

And now fast forward to March 2025, Reuters has reported that on Monday Big Blue won a London lawsuit against LzLabs – a mainframe modernisation specialist reportedly founded by US tech entrepreneur and philanthropist John Moores.

Court ruling

In the UK’s High Court, IBM had sued LzLabs, as well two English subsidiaries and their ultimate owner Moores, who previously founded information technology company BMC Software in 1980.

IBM alleged LzLabs’ UK subsidiary Winsopia had purchased an IBM mainframe computer and agreed a licence with IBM in 2013, before using the access to reverse-engineer IBM’s mainframe software.

LzLabs and Moores battled the lawsuit, arguing LzLabs had developed its own software after nearly a decade of work and there was no unlawful use of IBM’s licensed software, Reuters reported.

But the High Court largely ruled in IBM’s favour, with Judge Finola O’Farrell reportedly saying in a written ruling that Winsopia had breached the terms of its IBM software licence and that “LzLabs and Mr Moores unlawfully procured (those) breaches.”

Monday’s ruling followed a trial in 2024 to determine whether the defendants were liable to IBM. A further hearing to determine any damages to take place in due course.

IBM’s case against another British subsidiary, LzLabs Limited, and LzLabs’ current and former CEO was rejected, Reuters noted.

IBM and LzLabs did not immediately respond to a request for comment, Reuters reported.

Moores could not immediately be reached for comment.

Neon lawsuit

Despite mainframes being considered by some to be legacy tech, Big Blue has engaged in legal action previously to protect its IP.

In 2009 for example, Neon Enterprise Software, an Austin, Texas company that made software designed to shift mainframe workloads onto cheaper speciality processors, had sued IBM, alleging Big Blue was using anticompetitive tactics.

IBM countersued Neon in January 2010 for unfair business practices and anticompetitive behaviour of its own, namely copyright violation.

Neon Enterprise Software then amended its complaint in February 2010 sharing more specific details of IBM’s alleged anticompetitive behaviour.

In the end, both parties settled the dispute in June 2011, with Neon immediately withdrawing its zPrime product from the market, and certain key staff members were banned from reverse engineering, reverse compiling or translating specific IBM software.

No payments made by either side.

Neon link?

It is known that LzLabs offers a platform called Software Defined Mainframe (SDM).

SDM is designed to help IBM mainframe users migrate their applications to a modern platform (i.e. a cluster of x86 servers or the cloud), without having to modify the applications or the associated data.

In its 2022 complaint, IBM had alleged that LzLabs deliberately misappropriated IBM trade secrets by reverse engineering, reverse compiling and translating IBM software.

IBM also alleged that LzLabs has made false and misleading claims about LzLabs’ products.

And IBM at the time also stressed the link between LzLabs and Neon Enterprise Software.

IBM in its 2022 complaint had alleged that LzLabs is owned and run by some of the same individuals who previously owned and ran Neon Enterprise Software.