IBM United Kingdom Limited v LzLabs GmbH & Ors

IBM United Kingdom Limited v LzLabs GmbH & Ors

Winsopia breached the ICA by reverse engineering, disassembly, decompilation, and transferring IBM proprietary software to LzLabs for SDM development, in breach of express contractual restrictions. These acts did not fall within statutory exceptions under the Software Directive/CDPA. LzLabs and Mr Moores unlawfully procured and conspired in these breaches. The audit request and termination by IBM were valid. Claims are not time-barred due to deliberate concealment of the Winsopia-LzLabs connection. Directors Cresswell and Rockmann are not personally liable due to the Said v Butt defence. Claims against LzLabs UK fail for lack of causative participation.

Parties
Claimant: IBM United Kingdom Limited; First Defendant: LzLabs GmbH; Second Defendant: Winsopia Limited; Third Defendant: LzLabs Limited; Fourth Defendant: Mark Jonathan Cresswell; Fifth Defendant: Thilo Rockmann; Sixth Defendant: John Jay Moores
Jurisdiction
England and Wales
Judgment Date
03 October 2025
Procedural Posture
Civil (technology and Construction Court) / Final Judgment on Liability (quantum and Consequential Relief Reserved)
Outcome
Judgment for IBM on liability against Winsopia, LzLabs, and Mr Moores; claims against LzLabs UK, Cresswell, and Rockmann dismissed; quantum and consequential relief reserved.
Legal Topics
Software Licensing, Copyright Infringement, Reverse Engineering, Breach of Contract, Unlawful Means Conspiracy, Limitation of Actions, Procurement of Breach of Contract, Audit Rights, Declaratory and Injunctive Relief
Contract Law Intellectual Property Tort Law IT Law Software Licensing Copyright Infringement Reverse Engineering Breach of Contract +5 more

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Parties

IBM United Kingdom Limited

Claimant

LzLabs GmbH

First Defendant

Winsopia Limited

Second Defendant

LzLabs Limited

Third Defendant

Mark Jonathan Cresswell

Fourth Defendant

Thilo Rockmann

Fifth Defendant

John Jay Moores

Sixth Defendant

Procedural Posture

Civil (technology and Construction Court) / Final Judgment on Liability (quantum and Consequential Relief Reserved)

Legal Issues

  1. 1 Proper construction and scope of IBM Customer Agreement (ICA)
  2. 2 Whether Winsopia breached the ICA by reverse engineering and misuse of IBM software
  3. 3 Whether LzLabs, LzLabs UK, Cresswell, Rockmann, Moores procured or conspired in such breaches

Ratio Decidendi

Winsopia breached the ICA by reverse engineering, disassembly, decompilation, and transferring IBM proprietary software to LzLabs for SDM development, in breach of express contractual restrictions. These acts did not fall within statutory exceptions under the Software Directive/CDPA. LzLabs and Mr Moores unlawfully procured and conspired in these breaches. The audit request and termination by IBM were valid. Claims are not time-barred due to deliberate concealment of the Winsopia-LzLabs connection. Directors Cresswell and Rockmann are not personally liable due to the Said v Butt defence. Claims against LzLabs UK fail for lack of causative participation.

Court Disposition

Judgment for IBM on liability against Winsopia, LzLabs, and Mr Moores; claims against LzLabs UK, Cresswell, and Rockmann dismissed; quantum and consequential relief reserved.

Orders

  • Declaration that Winsopia breached the ICA and LzLabs/Moores unlawfully procured and conspired in such breaches
  • Declaration that IBM validly terminated the ICA