IBM says entrepreneur’s company stole mainframe technology

The cooling system of an IBM z13 mainframe server on IBM stand at the CeBIT trade fair in Hanover March 14, 2015. REUTERS/Morris Mac Matzen

(Reuters) – International Business Machines Corp said in a lawsuit filed Monday that U.S. tech entrepreneur and philanthropist John Moores’ company LzLabs GmbH stole IBM’s mainframe trade secrets to use in its own mainframe business.

Switzerland-based LzLabs created a shell company to license IBM’s mainframe software and reverse engineered it to misappropriate IBM’s mainframe technology, according to the lawsuit filed in Waco, Texas federal court.

LzLabs did not immediately respond to a request for comment on the allegations. Moores, who previously owned Major League Baseball’s San Diego Padres and founded information technology company BMC Software in 1980, could not immediately be reached.

The lawsuit said one of Moores’ other companies, Neon Enterprise Software LLC, had engaged in a “free-riding effort” on IBM’s mainframe technology before. A federal judge in Waco permanently blocked Neon and Moores from misusing IBM’s technology and selling its competing product in 2011, and Moores created LzLabs shortly after, IBM said.

IBM also accused LzLabs on Monday of infringing patents related to mainframe technology and falsely advertising that its platform is “functionally equivalent” to IBM’s. It asked the court to block LzLabs’ alleged violations, and requested an undisclosed amount of money damages including lost profits.

The case is International Business Machines Corp v. LzLabs GmbH, U.S. District Court for the Western District of Texas, No. 6:22-cv-00299.

For IBM: David Nelson, Alexander Rudis, and Nina Tallon of Quinn Emanuel Urquhart & Sullivan; Deron Dacus of the Dacus Firm

For LzLabs: n/a

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