International Business Machines Corporation (commonly referred to as IBM) is an American multinational technology company headquartered in Armonk, New York, United States, with operations in over 170 countries. The company originated in 1911 as the Computing-Tabulating-Recording Company (CTR) and was renamed “International Business Machines” in 1924.
IBM Corp. filed a lawsuit on Wednesday in Manhattan federal court against a startup founded by several of its former employees, claiming that the smaller firm stole source code to offer a cheaper competing software product. Teraproc Inc., a Canadian company launched in 2014 by three former IBMers, is using “confidential and proprietary source code” for an IBM software program in its own offerings — an act of “illegal opportunism” that is causing the IBM company irreparable harm. The small company, which has an undisclosed bit of capital to feed its initial push into the market as well as to drum up attention around OpenLava, got its start last July under the name Teraproc.
Unless halted, Teraproc’s illegal actions will serve as an encouragement to other companies to similarly violate the intellectual property rights of true innovators, like IBM, without investing in their own research and development. IBM claims that Teraproc’s founders took code for a program called Spectrum LSF — a so-called workload management platform — when they left. They used the stolen material to create a cheaper product and “directly compete with IBM.
Teraproc has been able to market its own LSF, called OpenLava, to IBM’s customers, pitching it as a less expensive substitute for IBM’s Spectrum LSF. OpenLava is less expensive because Teraproc stole what it had not created, passing off the inventiveness of Spectrum LSF as Teraproc’s own.
Keywords: copyright infringement, trade secrets misappropriation, IBM, Teraproc Inc.