DCT
3:25-cv-08118
SAP America Inc v. Novacloud Licensing LLC
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: SAP America, Inc. (Delaware)
- Defendant: Novacloud Licensing, LLC (Delaware)
- Plaintiff’s Counsel: Venable LLP
- Case Identification: 3:25-cv-08118, N.D. Cal., 09/24/2025
- Venue Allegations: Plaintiff SAP alleges venue is proper in the Northern District of California because Defendant NovaCloud has a regular and established place of business in the district and is subject to personal jurisdiction there.
- Core Dispute: Plaintiff SAP seeks a declaratory judgment that its cloud computing platforms and services do not infringe a portfolio of twenty-one patents owned by Defendant NovaCloud related to telecommunications networks, cloud computing, and data center management.
- Technical Context: The patents-in-suit relate to foundational technologies for managing data, traffic, and resources in large-scale computer networks, which are central to the operation of modern cloud computing and enterprise platform services.
- Key Procedural History: The complaint states that NovaCloud is a patent monetization entity that acquired the Asserted Patents from Telefonaktiebolaget LM Ericsson. In June 2025, NovaCloud contacted SAP to license the portfolio, asserting its relevance to SAP’s cloud products. This followed NovaCloud filing patent infringement lawsuits against Meta Platforms, Inc. and International Business Machines Corporation on patents from the same portfolio, creating an actual and immediate controversy sufficient for declaratory judgment jurisdiction.
Case Timeline
| Date | Event |
|---|---|
| 2001-09-26 | Earliest Priority Date for U.S. Patent No. 7,860,948 |
| 2002-07-20 | Earliest Priority Date for U.S. Patent No. 7,948,994 |
| 2010-12-28 | U.S. Patent No. 7,860,948 issues |
| 2011-05-24 | U.S. Patent No. 7,948,994 issues |
| 2025-05-01 | NovaCloud files lawsuit against Meta Platforms, Inc. (approx. date) |
| 2025-06-01 | NovaCloud contacts SAP offering a license (approx. date) |
| 2025-06-01 | NovaCloud files lawsuit against IBM (approx. date) |
| 2025-08-01 | SAP and NovaCloud engage in licensing discussions (approx. date) |
| 2025-09-24 | SAP files Complaint for Declaratory Judgment |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 7,860,948 - “Hierarchical caching in telecommunication networks”
- Patent Identification: U.S. Patent No. 7,860,948, “Hierarchical caching in telecommunication networks,” issued December 28, 2010 (Compl. ¶ 38).
The Invention Explained
- Problem Addressed: The patent describes that conventional caching mechanisms in hierarchical networks often result in redundant copies of the same information being stored at multiple levels of the hierarchy, leading to inefficient use of storage resources and complex update procedures (Compl. ¶ 39; ’948 Patent, col. 1:46-62).
- The Patented Solution: The invention proposes a method for dynamic management of cached information. Instead of storing multiple copies, it places a single copy at an optimal location within the network's hierarchy. This location is determined by analyzing "access statistics" to see where the content is most frequently requested, allowing the system to move the cached data "up or down" the hierarchy to be closer to the users who need it, thereby optimizing network performance (’948 Patent, Abstract; col. 4:11-23).
- Technical Importance: This dynamic approach to cache management aims to reduce redundant data storage and minimize network latency in large-scale content delivery networks (Compl. ¶ 39).
Key Claims at a Glance
The complaint seeks a declaratory judgment of non-infringement of "any claim of the '948 patent" (Compl. ¶ 88). Independent claim 1 is representative and includes the following essential elements:
- A method for dynamically managing cached information in a communication network with network nodes related in a hierarchical architecture.
- Establishing access statistics for the cached information at a location within the hierarchical architecture.
- Responsive to receiving a request for the cached information from a host, checking the access statistics of at least one other location.
- Evaluating the access statistics of both locations to determine the location of the cached information relative to the host and nearby hosts.
- Optimizing access by moving the cached information up or down within the hierarchical architecture.
U.S. Patent No. 7,948,994 - “Method and apparatus for routing and forwarding between virtual routers within a single network element”
- Patent Identification: U.S. Patent No. 7,948,994, “Method and apparatus for routing and forwarding between virtual routers within a single network element,” issued May 24, 2011 (Compl. ¶ 40).
The Invention Explained
- Problem Addressed: In network hardware that supports multiple "virtual routers" (logically separate routers running on a single physical device), these virtual routers typically cannot communicate with each other directly, limiting their utility and requiring traffic to be sent out of the device and back in to be transferred between them ('994 Patent, col. 1:33-46).
- The Patented Solution: The invention creates a "logical interface" that internally couples the virtual routers within the single network element. This allows them to establish peering relationships and exchange routing information directly. As a result, data packets can be forwarded from one virtual router to another internally "without lower layer processing," making the process much more efficient than external routing (’994 Patent, Abstract; col. 2:60-67).
- Technical Importance: This method allows a single piece of network equipment to efficiently and flexibly provide multiple, isolated routing services (e.g., for different customers) while enabling high-speed communication between them (Compl. ¶ 41).
Key Claims at a Glance
The complaint seeks a declaratory judgment of non-infringement of "any claim of the '994 patent" (Compl. ¶ 92). Independent claim 1 is representative and includes the following essential elements:
- A method in a single network element comprising instantiating a first virtual router and a second virtual router.
- Wherein the virtual routers have separate address spaces and routing tables.
- A logical interface couples the first and second virtual routers internally within the single network element.
- Distributing one or more routes from the first virtual router to the second, wherein a route identifies the first virtual router as the next hop.
- Forwarding packets directly from the second virtual router to the first virtual router via the logical interface without lower layer processing.
Multi-Patent Capsules
Patent Identification: U.S. Patent No. 8,015,291, “Monitoring network usage,” issued September 6, 2011 (Compl. ¶ 42).
Technology Synopsis: The patent relates to a method for determining a user's compliance with a service level agreement (SLA) by collecting data representative of the user's service usage and comparing it to the SLA (Compl. ¶ 43).
Asserted Claims: All claims are implicated in the request for declaratory judgment (Compl. ¶ 96).
Accused Features: SAP alleges its services do not infringe because they do not use predefined "activity and saturation threshold values" to record average network loading or the duration of network saturation as required by the claims (Compl. ¶ 96).
Patent Identification: U.S. Patent No. 8,145,721, “Bit streams combination of downloaded multimedia files,” issued March 27, 2012 (Compl. ¶ 44).
Technology Synopsis: The patent relates to a method for downloading a multimedia file by dividing it into two parts, coded differently, which are then transmitted to a user via two separate bit streams (Compl. ¶ 45).
Asserted Claims: All claims are implicated in the request for declaratory judgment (Compl. ¶ 100).
Accused Features: SAP alleges its services do not infringe because they do not download multimedia files as two separate bit streams or adapt files for such downloading as required by the claims (Compl. ¶ 100).
III. The Accused Instrumentality
- Product Identification: SAP’s “cloud computing platform and Business Technology Platform services” (Compl. ¶ 18). Specific products named include SAP BTP, SAP HANA, SAP Integration Suite, SAP Data Intelligence, SAP on VMware, SAP Access Control, SAP Data Hub, SAP SuccessFactors, SAP Cloud ALM, and SAP NetWeaver Application Server (Compl. ¶ 25).
- Functionality and Market Context: The accused instrumentalities are described as a suite of cloud computing and enterprise software services that provide platform, database, integration, and data management functionalities to customers (Compl. ¶¶ 2, 4). The complaint states that SAP is a "global leader in enterprise applications and business AI software" (Compl. ¶ 2). The technical operation of these services is referenced via hyperlinks to online documentation (Compl. ¶¶ 20-35). NovaCloud has characterized the patented technologies as being "core and ubiquitous to cloud computing platforms and services" like those offered by SAP (Compl. ¶ 6).
No probative visual evidence provided in complaint.
IV. Analysis of Infringement Allegations
- 7,860,948 Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Non-Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| A method for dynamically managing cached information in a communication network with... a hierarchical architecture | SAP’s services allegedly do not include caching in a hierarchical architecture as described in the patent (Compl. ¶ 88). | ¶88 | col. 4:11-14 |
| establishing access statistics... checking the access statistics of at least one other location | SAP’s services allegedly do not dynamically manage cached information by checking the access statistics of another location in response to a request (Compl. ¶ 88). | ¶88 | col. 4:46-50 |
| optimizing access for the at least one host and nearby hosts by moving the cached information up or down within the hierarchical architecture | SAP’s services allegedly do not optimize access by "mov[ing] the cached information up or down within [a] hierarchical architecture" or by checking access statistics of other hosts as required by the claims (Compl. ¶ 88). | ¶88 | col. 4:16-19 |
Identified Points of Contention:
- Scope Questions: The central dispute may concern the definition of "hierarchical architecture." The analysis will likely question whether the logical or physical arrangement of data storage and caching in SAP's distributed cloud environment could be construed as "hierarchical," even if it is not the explicit router-and-cache-engine topology described in the patent's embodiments.
- Technical Questions: A key factual question is whether any performance optimization, load balancing, or data locality features in SAP's platforms perform the function of dynamically moving data based on usage statistics in a manner that meets the claim limitations, irrespective of the terminology SAP uses to describe them.
7,948,994 Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Non-Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| A method in a single network element comprising instantiating a first virtual router and a second virtual router... | SAP’s services allegedly do not include "multiple virtual routers within a single network element" as described in the patent (Compl. ¶ 92). | ¶92 | col. 2:56-59 |
| a logical interface couples the first and second virtual routers internally within the single network element | The complaint alleges that SAP’s services do not include a "logical interface [that] couples virtual routers internally within a single network element" (Compl. ¶ 92). | ¶92 | col. 2:60-63 |
| forwarding packets directly from the second virtual router to the first virtual router with the logical interface without lower layer processing | SAP’s services allegedly do not forward packets "directly from the second virtual router to the first virtual router with the logical interface without lower layer processing" as the claims require (Compl. ¶ 92). | ¶92 | col. 2:63-67 |
- Identified Points of Contention:
- Scope Questions: The dispute may turn on whether SAP's distributed, software-defined cloud infrastructure can be considered a "single network element" as that term is used in the patent, which appears to describe a discrete hardware device. The definition of "virtual router" in the context of a cloud platform will also be a key point of contention.
- Technical Questions: The analysis will raise the question of how SAP's platforms handle routing and data transfer between different virtualized network functions or customer environments. The court may need to determine if the technical mechanism used by SAP for inter-service communication is functionally equivalent to the claimed "logical interface."
V. Key Claim Terms for Construction
For the ’948 Patent:
- The Term: "hierarchical architecture"
- Context and Importance: SAP’s primary non-infringement argument is that its cloud services do not use a "hierarchical architecture" for caching. The construction of this term is therefore case-dispositive for the ’948 Patent. Practitioners may focus on this term because it determines whether the patent's framework, conceived for telecommunications hardware, can read on a modern, distributed cloud environment.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The claim language is not explicitly limited to a specific hardware configuration, referring generally to a "communication network with network nodes" (’948 Patent, col. 8:41-43). This could support a construction that covers any logical hierarchy of data access tiers.
- Evidence for a Narrower Interpretation: The patent's specification and figures consistently depict the hierarchy as a physical arrangement of routers and cache engines in a tree-like topology (’948 Patent, FIG. 1; col. 2:40-50). The Abstract also refers to a "caching architecture," suggesting a structural, rather than purely logical, arrangement.
For the ’994 Patent:
- The Term: "single network element"
- Context and Importance: SAP contends that its cloud platform is not a "single network element," making the construction of this term critical. The applicability of the patent hinges on whether a distributed, software-defined system can be considered a "single network element" in the context of the invention.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The claims do not explicitly define the "network element" as a single physical device. An argument could be made that any collection of resources managed as a single logical entity (such as a cloud platform managed by a central orchestrator) constitutes a "single network element."
- Evidence for a Narrower Interpretation: The patent’s background and detailed description refer to the functionality of legacy routers and the invention's application within such devices ('994 Patent, col. 1:15-22). The abstract also refers to routing "within a single network element," which in the art at the time of invention typically referred to a discrete piece of hardware like a router or switch.
VI. Other Allegations
- Indirect Infringement: For each of the asserted patents, SAP seeks a declaratory judgment that it does not infringe either directly or indirectly (Compl. ¶¶ 88, 92, 96, et al.). The complaint does not plead specific facts related to indirect infringement but includes it within the scope of the requested relief.
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of definitional scope: can terms rooted in the context of early-2000s telecommunications hardware, such as "hierarchical architecture" and "single network element," be construed to cover the architecture of a modern, distributed, software-defined cloud platform? The outcome will likely depend on whether the court adopts a narrow, hardware-centric construction or a broader, more functional one.
- A central evidentiary question will be one of operational equivalence: does the underlying functionality of SAP's cloud services—in managing data locality, optimizing performance, and routing traffic between virtualized environments—operate in a way that is technically and legally equivalent to the specific methods claimed in the patents, even if SAP's system is architected differently and described with different terminology?