Introduction

In a recent judgment, the High Court found Swiss software development company LzLabs and Co-Defendants, including tech billionaire John Jay Moores, liable for breach of contract and unlawful means conspiracy.[1] The case involves allegations of software reverse engineering and breaches of licensing agreements. The court’s judgment not only highlights the complexities of software licensing, but also brings into focus the legal boundaries of interoperability and intellectual property rights.

Background 

IBM developed its first mainframe computers in 1950s. These room-sized machines initially ran on vacuum tubes and were some of the very earliest commercially available computers. Today, IBM continues to market mainframe hardware and software descended from these pioneering models, which are relied on by 67% of the Fortune 100 companies. Mainframe systems are designed to reliably and securely process large volumes of information for institutions, running commercial databases, transaction services and customer applications.

On 15 August 2013, IBM entered into a licensing agreement with Winsopia Limited, a subsidiary of LzLabs, under the IBM Customer Agreement (ICA). The agreement allowed Winsopia to use IBM mainframe software, but imposed restrictions on reverse engineering and external distribution. These restrictions were intended to safeguard IBM’s proprietary technology and prevent unauthorised use