DCT

3:24-cv-02220

Hewlett Packard Enterprises Co v. Inspur Group Co Ltd

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 4:24-cv-02220, N.D. Cal., 04/15/2024
  • Venue Allegations: Venue is alleged based on the California-based defendants (Aivres, Betapex) having regular and established places of business within the district. For foreign-domiciled defendants (Inspur Group, IEIT Systems, KAYTUS), venue is asserted on the basis that they may be sued in any judicial district.
  • Core Dispute: Plaintiff alleges that Defendants’ server products and associated management software infringe five U.S. patents related to server management, network administration, and power monitoring technologies.
  • Technical Context: The lawsuit concerns foundational technologies for managing enterprise-class servers in data centers, including remote administration, hardware configuration, and power consumption monitoring.
  • Key Procedural History: The complaint alleges that Plaintiff made multiple attempts to contact Defendants regarding the alleged infringement beginning in August 2021, which were ignored. It further alleges that after Defendant Inspur Group was placed on the U.S. Department of Commerce's Entity List in March 2023, Defendants rebranded their U.S. operations and products from "Inspur" to "Aivres" and "KAYTUS" to conceal their infringing activities.

Case Timeline

Date Event
1998-06-22 Earliest Priority Date for ’508 Patent
2005-10-07 Earliest Priority Date for ’566 Patent
2005-10-20 Earliest Priority Date for ’671 Patent
2009-12-15 ’671 Patent Issued
2009-07-14 Earliest Priority Date for ’891 Patent
2010-01-27 Earliest Priority Date for ’737 Patent
2012-01-31 ’508 Patent Issued
2012-07-10 ’566 Patent Issued
2012-12-18 ’891 Patent Issued
2016-01-05 ’737 Patent Issued
2021-08-11 HPE alleges first contact attempt with Inspur
2022-02-04 HPE alleges sending letter identifying patents and products
2023-03-06 Inspur Group added to U.S. Entity List
2023-05-01 Inspur Systems, Inc. allegedly renamed Aivres Systems, Inc.
2023-09-18 Inspur Asset Holdings, Inc. allegedly renamed Betapex Inc.
2024-04-15 Complaint Filed

II. Technology and Patent(s)-in-Suit Analysis

I. U.S. Patent No. 8,218,566 - “Systems and methods for making serial ports of existing computers available over a network”

  • Patent Identification: U.S. Patent No. 8,218,566, titled “Systems and methods for making serial ports of existing computers available over a network,” issued July 10, 2012 (Compl. ¶17).
  • The Invention Explained:
    • Problem Addressed: The patent describes the expense and inefficiency of using dedicated "terminal servers" to connect legacy serial devices to a network. It also notes that alternative solutions using a server's own controller (UART) are unreliable, as the serial port becomes unavailable if the server's operating system crashes or the server is powered down (’566 Patent, col. 1:11-36).
    • The Patented Solution: The invention proposes a system with a "management processor" that is independent of the host computer's main processor and operating system. This management processor can operate in two modes: a first mode where it disables the host's local control over a serial port and takes control itself to provide network access, and a second mode where it returns control to the host's local serial controller (’566 Patent, Abstract; col. 2:9-21).
    • Technical Importance: This technology allows for the reliable integration and remote management of legacy serial-port devices within a modern network infrastructure, even when the host computer is offline, thereby increasing reliability and reducing costs associated with dedicated hardware (Compl. ¶82).
  • Key Claims at a Glance:
    • The complaint asserts infringement of at least independent claim 1 (Compl. ¶81).
    • The essential elements of claim 1 include:
      • A system comprising a serial controller for local control of a serial port and a management processor.
      • The management processor is operable in a first mode and a second mode.
      • In the first mode, the management processor disables local control by the serial controller and takes control of the serial port for network access.
      • In the second mode, the management processor returns control of the serial port to the serial controller.
    • The complaint reserves the right to assert claims 1 through 18 (Compl. ¶80).

II. U.S. Patent No. 7,634,671 - “Determining power consumption in IT networks”

  • Patent Identification: U.S. Patent No. 7,634,671, titled “Determining power consumption in IT networks,” issued December 15, 2009 (Compl. ¶18).
  • The Invention Explained:
    • Problem Addressed: The patent identifies that manually calculating the power consumption of a data center is "labor intensive and error-prone," and that such calculations become quickly outdated as devices are added or removed. Furthermore, modern devices with dynamic power usage make static calculations unreliable (’671 Patent, col. 1:47-61, col. 2:1-4).
    • The Patented Solution: The invention describes an automated method where an "autodiscovery tool" discovers all network devices. The system then directs management requests to these devices to obtain their individual electric power consumption values. These values are centrally collected, and the system can determine if a value is outside a predefined range and trigger an alarm, enabling real-time monitoring (’671 Patent, Abstract; Fig. 1).
    • Technical Importance: This system allows for real-time, automated monitoring of data center power consumption, improving operational efficiency, stability, and reliability, particularly as new devices with variable power demands are integrated (Compl. ¶95).
  • Key Claims at a Glance:
    • The complaint asserts infringement of at least independent claim 1 (Compl. ¶94).
    • The essential elements of claim 1 include:
      • A method comprising running an autodiscovery tool to discover network devices.
      • Directing management requests to the devices to obtain electric power consumption values.
      • Centrally collecting the returned power consumption values.
      • Determining whether a collected value is beyond a low or high value.
      • Triggering an alarm if the value is beyond the low or high value.
    • The complaint does not explicitly reserve the right to assert other claims for this patent but makes a general allegation of infringing "one or more claims" (Compl. ¶93).

III. U.S. Patent No. 9,229,737 - “Method and system of emulating devices across selected communication pathways through a terminal session”

  • Patent Identification: U.S. Patent No. 9,229,737, titled “Method and system of emulating devices across selected communication pathways through a terminal session,” issued January 5, 2016 (Compl. ¶19).
  • Technology Synopsis: The patent addresses the problem of limited bandwidth during remote administration tasks like loading an operating system. It discloses a method where a server's management processor can emulate a mass storage device (e.g., a remote USB drive) over a selected communication pathway, making the remote device appear local to the server being administered, thereby overcoming bandwidth limitations of typical terminal sessions (Compl. ¶108; ’737 Patent, Abstract).
  • Asserted Claims: At least independent claim 1 (Compl. ¶107).
  • Accused Features: The Accused Server Products are alleged to contain a management processor that performs the claimed method of emulating a remote mass storage device during a terminal session (Compl. ¶¶107, 109).

IV. U.S. Patent No. 8,335,891 - “Method and system for configuring a storage array”

  • Patent Identification: U.S. Patent No. 8,335,891, titled “Method and system for configuring a storage array,” issued December 18, 2012 (Compl. ¶20).
  • Technology Synopsis: The invention provides a system to overcome memory limitations during system boot-up. It describes running a storage array configuration utility directly on the array controller (which has its own RAM), rather than on the host processor which is limited to a smaller amount of "base memory" in its pre-boot state. The host processor is used simply to pass user interface data between the user and the array controller (’891 Patent, col. 2:4-21; Compl. ¶121).
  • Asserted Claims: At least independent claim 1 (Compl. ¶120).
  • Accused Features: The Accused Server Products are alleged to have an array controller that runs a configuration utility to generate a menu of options and process user selections, while the host processor is used to receive the menu information from the controller and send user instructions back to it (Compl. ¶¶120, 122).

V. U.S. Patent No. 8,108,508 - “Web server chip for network manageability”

  • Patent Identification: U.S. Patent No. 8,108,508, titled “Web server chip for network manageability,” issued January 31, 2012 (Compl. ¶21).
  • Technology Synopsis: The patent describes a chip, for inclusion in a network device, that contains its own embedded processor. This processor is programmed to act as a "manageability web server" with network access independent of the device's host processor. This allows the chip to perform network management functions even if the host processor or its operating system has crashed (’508 Patent, Abstract; Compl. ¶134).
  • Asserted Claims: At least independent claim 1 (Compl. ¶133).
  • Accused Features: The Accused Server Products are alleged to contain a chip that performs network management functions independent of the host processor, including a media access controller for independent network access and an embedded processor that functions as a manageability web server (Compl. ¶¶133, 135).

III. The Accused Instrumentality

I. Product Identification

The complaint identifies two main categories of accused instrumentalities: the "Accused Server Products" and the "ISPIM software" (Compl. ¶¶29, 30). The server products include various models sold under the Inspur, Aivres, and KAYTUS brands, such as the Inspur NF5280M5 and NF5180M5, which are allegedly rebranded as Aivres and KAYTUS models like the KR2280V2 and KR1280V2 (Compl. ¶¶26, 28, 29).

II. Functionality and Market Context

The accused products are enterprise-grade rack servers and the software used to manage them (Compl. ¶¶20, 30). The complaint alleges that Inspur is a major global server provider and that its U.S. entities, Aivres and KAYTUS, sell the same underlying products under different branding (Compl. ¶¶42, 58). The complaint provides a visual from an archived version of the Inspur Systems website showing an NF8480M6 server for sale in the U.S. with a callout highlighting the "inspur" brand logo (Compl. p. 12). This rebranding is alleged to have occurred to conceal infringing activities after Inspur Group was placed on the U.S. Department of Commerce's Entity List (Compl. ¶¶41-42). The ISPIM software is alleged to be management software that controls the operation of these servers (Compl. ¶30).

IV. Analysis of Infringement Allegations

The complaint incorporates by reference claim chart exhibits that were not filed with the public document. Therefore, a narrative summary of the infringement theories is provided in lieu of a claim chart table.

I. ’566 Patent Infringement Allegations

The complaint alleges that the Accused Server Products, such as the Inspur NF5180M5, meet every limitation of claim 1 of the ’566 Patent (Compl. ¶¶27, 83). The infringement theory is that these servers contain a management processor (such as a Baseboard Management Controller) that operates independently of the server's main CPU and operating system. This processor is alleged to perform the claimed dual-mode function: in a first mode, it disables the host's local serial controller to provide network access to a serial port, and in a second mode, it returns control to that local controller (Compl. ¶81). The complaint references an Exhibit 6 as containing exemplary evidence for these allegations (Compl. ¶83).

II. ’671 Patent Infringement Allegations

The complaint alleges that the Defendants' ISPIM software, when used as intended, practices the method of claim 1 of the ’671 Patent (Compl. ¶¶30, 96). The theory is that the software performs each step of the claimed method: it runs an "autodiscovery tool" to discover network devices, directs management requests to obtain power consumption data from them, centrally collects this data, determines if the collected values are outside a high/low range, and triggers an alarm if they are (Compl. ¶94). The complaint references an Exhibit 7 as containing exemplary evidence for these allegations (Compl. ¶96).

III. Identified Points of Contention

  • Scope Questions: For the ’566 patent, a central question may be the meaning of "disable local control." The court may need to determine if the accused products' method of bypassing or intercepting communications to the serial port, as is common in server management controllers, meets the specific "disable" and "return control" limitations as construed from the patent's specification.
  • Technical Questions: For the ’671 patent, a key factual question will be whether the accused ISPIM software performs the specific step of "triggering an alarm" based on a high/low value determination. The analysis will likely focus on whether the software's functionality is merely displaying data (e.g., in a dashboard) or if it includes a specific, automated alarm-triggering logic as required by the claim.

V. Key Claim Terms for Construction

  • The Term: "disable local control ... by the serial controller" (from ’566 Patent, Claim 1).

  • Context and Importance: The infringement analysis for the ’566 patent will likely hinge on this term. The dispute may focus on whether the accused management processor's function of taking over the serial port communication constitutes "disabling" the local controller, or if it merely acts as a parallel or alternative path. Practitioners may focus on this term because the specific mechanism of control transfer is a critical technical limitation.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The patent's description is functional, stating the goal is to "remove local control of the serial port" to "make the serial port(s) available for network access" (’566 Patent, col. 2:12-16). This could support an interpretation where any technical means that achieves this functional outcome of severing the local controller's authority is sufficient.
    • Evidence for a Narrower Interpretation: The detailed description notes that a switching module can "physically disconnect the local serial controller from the serial ports" or "intercept communications" to "logically disconnect[]" it (’566 Patent, col. 5:9-15). This could support a narrower interpretation requiring a specific act of disconnection, either physical or logical, rather than a mere bypass.

  • The Term: "triggering an alarm" (from ’671 Patent, Claim 1).

  • Context and Importance: This term is critical because it distinguishes the claimed method from a passive data collection and display system. The case may turn on whether the accused ISPIM software's notification features, if any, qualify as "triggering an alarm."

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The specification describes an "alarm unit 19" that "raises an alarm to notify a data center administrator of a possible malfunctioning of a network device" (’671 Patent, col. 10:3-6). The term "notify" is broad and could encompass a range of alerts, from on-screen indicators to emails or other signals.
    • Evidence for a Narrower Interpretation: The claim links the alarm to the power value being "beyond the low value or beyond the high value," and the specification discusses this in the context of an "untypical electric power consumption value" that could "indicate a malfunctioning of the network device" (’671 Patent, col. 10:5-9). This might support a narrower reading where the "alarm" must be a specific warning of a potential malfunction, not just a notification that a user-defined threshold has been crossed for informational purposes.

VI. Other Allegations

I. Indirect Infringement

The complaint alleges both induced and contributory infringement for all five asserted patents. The inducement claims are based on allegations that Defendants provide the Accused Products to customers with instructions (e.g., user manuals and software documentation) that encourage use in an infringing manner (Compl. ¶¶ 84, 97, 110, 123, 136). The contributory infringement claims allege the products are especially designed for use in a patented system and are not staple articles of commerce with substantial non-infringing uses (Compl. ¶¶ 85, 98, 111, 124, 137).

II. Willful Infringement

Willfulness is alleged for all five asserted patents. The complaint bases this on alleged pre-suit knowledge, citing multiple letters and contact attempts beginning in August 2021 and culminating in a February 4, 2022 letter that allegedly identified the infringing products and asserted patents. Defendants' alleged refusal to engage in licensing discussions is presented as evidence of "egregious conduct" and "willful blindness" (Compl. ¶¶ 86-89, 99-102, 112-115, 125-128, 138-141).

VII. Analyst’s Conclusion: Key Questions for the Case

  • A central issue will be one of functional operation: Does the evidence show that the accused server management hardware and software operate in the specific manner required by the claims? For instance, does the accused management processor perform the precise "disable" and "return control" steps of the ’566 patent, and does the ISPIM software execute the specific "determining" and "triggering an alarm" logic of the ’671 patent, or is there a fundamental mismatch in technical operation?
  • A second key question will address corporate conduct and intent: Can Plaintiff prove that Defendants had pre-suit knowledge of infringement from the notice letters and that their subsequent rebranding of products and entities was a deliberate strategy to evade liability? The answer will be critical to the claim for willful infringement and a potential award of enhanced damages.