HT-2021-000363 - [2025] EWHC 532 (TCC)

Clause 4.1 provides that:

“… IBM grants the Customer a non-exclusive licence to use the ICA Programs only within the Customer’s Enterprise in the United Kingdom…”

This entitles Winsopia, as the Customer, to use the ICA Programs identified in the licence documentation. There is no dispute as to the named ICA Programs falling within the licence and an agreed list was provided to the court with the parties’ opening submissions.

The permitted use of the ICA Programs is limited to the Customer’s Enterprise in the United Kingdom.

Enterprise is defined in clause 1.3 as:

“any legal entity (such as a corporation) and the subsidiaries it owns by more than 50 percent. The term “Enterprise” applies only to the portion of the Enterprise located in the United Kingdom.”

This amounts to both a geographical limitation, namely, within the United Kingdom, and a business limitation, namely, to Winsopia’s business. IBM correctly notes that this restricts use within and for the purposes of Winsopia’s organisation, thereby excluding use by external companies. IBM seeks to go further and submits that use of the ICA Programs is limited to Winsopia’s internal purposes. I reject that submission because it stretches the words beyond their natural and obvious meaning. The nature and extent of Winsopia’s business enterprise is not confined to any specific purpose or scope. There is no express prohibition on Winsopia using the ICA Programs to provide services to LzLabs and others, such as testing and quality assurance, provided that such use otherwise complies with the terms of the ICA.

Clause 4.1.1 sets out the authorised use of the ICA Programs. At 4.1.1(a) Winsopia is permitted to:

“use the ICA Program’s machine-readable portion on only the Designated Machine.”

This is a physical restriction, not on the location of use but on the machine that can be used to run the ICA Program, namely, the Winsopia mainframe, regardless of where that mainframe is sited.

Clause 4.1.1(b) permits Winsopia to use the ICA Program to the extent of the authorisations that Winsopia has obtained. There is no presumption that Winsopia is entitled to unlimited use, subject only to specific exclusions or limitations. The ICA provides for specific and limited permission to use the licensed software, together with express exclusions and limitations.

Clause 4.1.1(c) permits Winsopia to make and install copies of the ICA Program but subject to the proviso that: (i) such copying is in support of the level of use authorised; and (ii) Winsopia reproduces the copyright notices and any other legends of ownership on each whole or partial copy.

Clause 4.1.1(d) permits Winsopia to use any portion of the ICA Program that is provided by IBM in source form or marked restricted only to: (i) resolve problems related to the use of the ICA Program; and (ii) modify the ICA Program so that it will work together with other products.

It follows from the above provisions that under the ICA, authorised use of the ICA Programs is limited to use by Winsopia, on the designated Winsopia mainframe, for the execution and running of the defined ICA Programs.