Jaani Riordan appeared as junior counsel in an application for an interim antisuit injunction to restrain the Claimant (“IBM UK”) and its US parent company (“IBM Corp”) from continuing parallel proceedings in Texas and joining IBM Corp as a party to the proceedings in England and Wales. IBM Corp applied to set aside service under CPR Part 11.
The English proceedings alleged breach of an “IBM Customer Agreement” (“ICA”) between IBM UK and the Second Defendant (“Winsopia”), under which Winsopia was entitled to use certain IBM mainframe software, in which IBM Corp was said to own the underlying copyright. IBM UK’s claim related to a product called the “Software Defined Mainframe” which the First Defendant (“LzLabs”) had developed to enable mainframe users to run their legacy applications on modern computer architectures and processors, by means of an interoperable compatibility layer. IBM UK alleges that this involved breaches of the ICA being committed by Winsopia, and that such breaches had been procured by LzLabs and its individual directors. The Defendants denied that any breaches had occurred, pointing out that they went to considerable lengths to adopt a “clean room” development process, and relying on the rights and freedoms of software users such as Winsopia to observe, study and test computer programs under Directive 2009/24/EC (“Software Directive”) and equivalent rights under sections 50A, 50BA and 50B of the Copyright, Designs and Patents Act 1988.
The ICA was governed by English law and contained an exclusive jurisdiction clause in favour of the English courts.
In parallel proceedings issued shortly after the filing of the Defence and Counterclaim in the English proceedings, IBM Corp issued proceedings in Texas against LzLabs and a Texan company alleging causes of action which included misuse of trade secrets and patent infringement by the development of the SDM. Such breaches were said, in particular, to have occurred as a result of Winsopia committing breaches of the ICA and providing the fruits of such breaches to LzLabs. On this basis, the Defendants submitted that it would be vexatious and oppressive to permit both sets of proceedings to continue in parallel.
Waksman J rejected the antisuit injunction application and set aside the order granting LzLabs and Winsopia permission to serve IBM Corp out of the jurisdiction. The judge held that the US proceedings did not concern the same claims for breach of contract which are in issue in the English proceedings, including because Winsopia was not a Defendant in the US proceedings. Because the US proceedings concerned allegations in relation to activities carried out in Texas, that was the appropriate forum for dealing with those claims. The judge further held that IBM Corp was not a party to the ICA or bound by its exclusive jurisdiction clause, whether through the doctrines of agency, collateral agreement or estoppel. As such, none of the gateways within Practice Direction 6B applied.