DCT

5:24-cv-09324

Netflix Inc v. Broadcom Inc

Log In
Key Events
Amended Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 5:24-cv-09324, N.D. Cal., 09/05/2025
  • Venue Allegations: Venue is alleged as proper because Defendants maintain principal places of business, reside, and have committed acts of patent infringement in the Northern District of California.
  • Core Dispute: Plaintiff alleges that Defendants’ virtual machine software and cloud service platforms infringe five patents related to virtual machine resource accounting, dynamic load balancing, and remote management.
  • Technical Context: The technology at issue concerns methods for managing large-scale virtualized computing environments, which are fundamental to modern data centers and cloud infrastructure.
  • Key Procedural History: The complaint alleges that Broadcom and its acquired subsidiary VMware had extensive pre-suit knowledge of the asserted patents through their citation during the patent prosecution of VMware’s and Symantec’s (another Broadcom acquisition) own patents. The complaint also notes that a court order on August 8, 2025, found claims of the asserted patents directed to patent-ineligible subject matter, but Plaintiff has re-pled the infringement counts to preserve its appellate rights.

Case Timeline

Date Event
2005-03-02 Earliest Priority Date for ’424, ’707, and ’891 Patents
2006-10-27 Priority Date for ’893 Patent
2009-05-21 Release of ESXi version 4, which allegedly included infringing features
2009-07-31 Priority Date for ’122 Patent
2010-08-17 ’424 Patent Issues
2010-09-14 ’707 Patent Issues
2012-05-22 ’893 Patent Issues
2014-08-05 ’891 Patent Issues
2014-10-14 ’122 Patent Issues
2023-11-22 Broadcom completes acquisition of VMware
2024-12-27 Original Complaint Filed
2025-08-08 Court issues order regarding patent ineligibility
2025-09-05 Second Amended Complaint Filed

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

U.S. Patent No. 7,779,424 - “System and Method for Attributing to a Corresponding Virtual Machine CPU Usage of an Isolated Driver Domain in which a Shared Resource’s Device Driver Resides”

  • Patent Identification: U.S. Patent No. 7,779,424, “System and Method for Attributing to a Corresponding Virtual Machine CPU Usage of an Isolated Driver Domain in which a Shared Resource’s Device Driver Resides,” issued August 17, 2010.

The Invention Explained

  • Problem Addressed: The patent describes a problem in virtualized environments where traditional monitoring techniques fail to reveal the "true" CPU usage by different Virtual Machines (VMs) (Compl. ¶23; ’424 Patent, col. 3:58-60). These techniques only measured the CPU time allocated directly to a VM by a scheduler, ignoring the CPU work performed on the VM’s behalf by separate system components, such as an "isolated driver domain" that handles I/O requests (Compl. ¶25; ’424 Patent, col. 4:5-19).
  • The Patented Solution: The invention proposes a method to achieve a more accurate accounting of a VM's resource consumption. The solution involves first "observing communication" (such as resource requests) between the VMs and the driver domains where device drivers reside, and then "determining," based on that communication, the portion of the driver domain's CPU utilization that is specifically attributable to each individual VM (Compl. ¶27; ’424 Patent, col. 4:20-36).
  • Technical Importance: This accurate accounting of CPU utilization is described as improving various VM management tasks, such as policy-based resource allocation, admission control of new VMs, VM migration, and quality of service (QoS) provisioning (Compl. ¶26; ’424 Patent, col. 8:37-42).

Key Claims at a Glance

  • The complaint asserts independent claims 1, 6, and 12 (Compl. ¶28). Claim 1 includes the following essential elements:
    • Observing communication from a plurality of paravirtualized VMs to isolated driver domains, where the communication includes resource requests for a shared resource.
    • Determining, based on this communication, the CPU utilization of the driver domains that is attributable to the plurality of VMs.
    • This includes determining a share of CPU execution attributed to each of the VMs during a time interval.
  • The complaint states it is asserting claims 1-19 of the patent (Compl. ¶92).

U.S. Patent No. 7,797,707 - “System and method for attributing to a corresponding virtual machine CPU usage of a domain in which a shared resource’s device driver resides”

  • Patent Identification: U.S. Patent No. 7,797,707, “System and method for attributing to a corresponding virtual machine CPU usage of a domain in which a shared resource’s device driver resides,” issued September 14, 2010.

The Invention Explained

  • Problem Addressed: The patent addresses the same technical problem as the ’424 Patent: conventional methods for measuring a VM's CPU usage are incomplete because they fail to account for the CPU work performed by a separate "privileged management domain" that handles I/O and shared resource requests on behalf of the VM (Compl. ¶¶38-39; ’707 Patent, col. 4:4-19).
  • The Patented Solution: The patented method creates a comprehensive metric for a VM's CPU usage. It involves observing communication between a VM and the domain containing the device drivers to determine the CPU utilization of that domain attributable to the VM. It then separately determines the CPU utilization allocated directly to the VM by a scheduler. Finally, it calculates a "total CPU utilization" by summing these two values (Compl. ¶41; ’707 Patent, col. 14:20-27).
  • Technical Importance: By providing a more complete picture of CPU usage, the invention allows a VM architecture to better adapt to changing conditions, making the system more reactive and less prone to overload, which in turn supports management tasks like admission control and VM migration (Compl. ¶40; ’707 Patent, col. 8:14-19).

Key Claims at a Glance

  • The complaint asserts independent claims 1, 15, 22, 26, and 27 (Compl. ¶42). Claim 1 includes the following essential elements:
    • Observing communication from a VM to a domain where a device driver for a shared resource resides, with the domain being separate from a virtual machine monitor (VMM).
    • Determining the CPU utilization of that domain attributable to the VM based on the communication.
    • Determining the CPU utilization allocated by a scheduler to the VM.
    • Determining the total CPU utilization attributable to the VM by summing the domain utilization and the scheduler-allocated utilization.
  • The complaint states it is asserting claims 1-28 of the patent (Compl. ¶158).

U.S. Patent No. 8,799,891 - “System and method for attributing CPU usage of a virtual machine monitor to a corresponding virtual machine”

  • Patent Identification: U.S. Patent No. 8,799,891, “System and method for attributing CPU usage of a virtual machine monitor to a corresponding virtual machine,” issued August 5, 2014 (Compl. ¶20).
  • Technology Synopsis: This patent also addresses inaccurate CPU accounting in virtual environments. It asserts that prior techniques failed to attribute the CPU utilization of the virtual machine monitor (VMM) itself when servicing resource requests from a VM (Compl. ¶50; ’891 Patent, col. 3:39-43). The patented solution involves observing communication from a VM to the VMM (specifically, a resource access request) and determining the VMM's CPU utilization that is "specifically attributable to said VM" for processing that request (Compl. ¶53; ’891 Patent, col. 12:25-34).
  • Asserted Claims: Independent claims 1, 13, and 18 are asserted (Compl. ¶54).
  • Accused Features: The complaint accuses VMware's vSphere platform, alleging that its statistics subsystem calculates CPU usage attributable to system activities performed by the platform's VMM on behalf of a VM, such as the "%SYS" metric (Compl. ¶¶218, 222, 230).

U.S. Patent No. 8,185,893 - “Starting up at least one virtual machine in a physical machine by a load balancer”

  • Patent Identification: U.S. Patent No. 8,185,893, “Starting up at least one virtual machine in a physical machine by a load balancer,” issued May 22, 2012 (Compl. ¶21).
  • Technology Synopsis: This patent addresses inefficiencies in computer networks, such as excess power consumption from idle servers during periods of low demand (Compl. ¶63; ’893 Patent, col. 1:15-21). The invention uses a load balancer to dynamically manage the number of active VMs, starting up additional VMs when workload is heavy and disabling them when the workload falls below a threshold. It also discloses a "placement controller" that optimizes the layout of VMs across physical machines based on predefined policies and performance indicators to improve efficiency and account for changing conditions (Compl. ¶¶64-65; ’893 Patent, col. 6:14-19).
  • Asserted Claims: At least claims 1-11 and 16 are asserted (Compl. ¶270).
  • Accused Features: The complaint accuses VMware Cloud Director’s "auto-scale" functionality, which automatically scales the number of VMs up or down based on user-defined rules for CPU and memory usage (Compl. ¶¶273, 275). It also accuses vSphere’s Distributed Resource Scheduler (DRS), which allegedly functions as a placement controller by computing a "VM DRS score" to optimize VM placement across hosts (Compl. ¶¶279-280).

U.S. Patent No. 8,863,122 - “Remote control of a plurality of virtual machines using actions facilitated through a graphic user interface”

  • Patent Identification: U.S. Patent No. 8,863,122, “Remote control of a plurality of virtual machines using actions facilitated through a graphic user interface,” issued October 14, 2014 (Compl. ¶22).
  • Technology Synopsis: This patent addresses the difficulty of managing multiple VMs that may have been designed by different entities with different interfaces (Compl. ¶75; ’122 Patent, col. 1:16-20). The invention provides a method for remote control through a universal interface. A host computer provides a graphical user interface (GUI) to a remote computer, displaying a list of VMs and enabling a user to select a VM and perform an action (e.g., start, stop, reboot) on it independently of other VMs. It also provides for a second GUI to map a hardware peripheral from the remote computer to a selected VM (Compl. ¶77; ’122 Patent, col. 10:23-51).
  • Asserted Claims: At least claims 10-12 are asserted (Compl. ¶318).
  • Accused Features: The complaint accuses the VMware vSphere Client, a web-based client that allegedly provides a GUI from a host (vCenter Server) to a remote computer. This GUI is alleged to display lists of VMs, allow for the selection of individual VMs, and provide menus for performing actions on them, as well as for mapping hardware like a CD/DVD drive (Compl. ¶¶322-327).

III. The Accused Instrumentality

Product Identification

  • The complaint names a suite of VMware virtualization products and services, with the core accused technology being the VMware vSphere platform (Compl. ¶¶92, 158, 216). This includes VMware vSphere Foundation, VMware Cloud Foundation, and related cloud services like VMware Cloud on AWS (Compl. ¶92).

Functionality and Market Context

  • VMware vSphere is described as a "virtualization platform, which transforms data centers into aggregated computing infrastructures that include CPU, storage, and networking resources" (Compl. ¶95). The platform’s core components are ESXi, a hypervisor that creates and runs VMs on a physical host, and vCenter Server, which manages multiple ESXi hosts and pools their resources (Compl. ¶96).
  • The complaint alleges that the underlying operating system of ESXi, called the "VMkernel," includes the device drivers for shared resources and provides "[r]esource scheduling" functionality (Compl. ¶¶98, 101). Figure 7 from the complaint is an annotated diagram from a VMware white paper showing the location of device drivers within the VMkernel architecture (Compl. ¶101).
  • VMs are alleged to communicate with the VMkernel through a Virtual Machine Monitor (VMM) process to request host resources (Compl. ¶99). The complaint alleges that this architecture has supported paravirtualized controllers since ESXi version 4, released in 2009 (Compl. ¶97).

IV. Analysis of Infringement Allegations

’424 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
observing communication from plurality of paravirtualized virtual machines (VMs) to driver domains that are isolated from the plurality of VMs... comprising observing communication from said plurality of VMs requesting access to a shared resource... The Accused Products feature VMs that communicate requests for shared host resources (CPU, storage, network) to the VMkernel, which contains the device drivers for those resources. This communication occurs through a VMM. ¶¶95, 99 col. 4:20-27
...wherein a device driver for said shared resource is arranged in said driver domains... The complaint alleges that in the vSphere architecture, the device drivers for shared resources reside within the VMkernel, which functions as the claimed "driver domain." ¶101 col. 4:27-29
determining, based on said communication... CPU utilization of said plurality of driver domains attributable to the plurality of VMs, including determining a share of CPU execution attributed to each of the VMs... vSphere's statistics subsystem allegedly determines CPU utilization attributable to the VMkernel on behalf of a specific VM using metrics like "%SYS" (system time) and calculates a total percentage of CPU used for that VM. ¶¶103-106, 110 col. 4:30-36

’707 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
observing, in a computer, communication from a virtual machine (VM) to a domain in which a device driver for a shared resource resides, wherein the domain is separate from a virtual machine monitor (VMM)... VMs in the accused vSphere products communicate with the VMkernel (the alleged "domain") via a VMM process to access shared resources handled by device drivers within the VMkernel. The complaint alleges the VMM is a separate process running on top of the VMkernel. ¶¶161, 164, 165 col. 14:2-5
determining... CPU utilization of said domain attributable to said VM... vSphere allegedly calculates "%SYS," the percentage of time spent in the ESXi VMkernel on behalf of the virtual machine to perform system activities. ¶170 col. 14:6-8
determining, for the VM, CPU utilization allocated by a scheduler to the VM... vSphere allegedly calculates "%RUN," which is described as the percentage of total CPU time the VM was scheduled. ¶172 col. 14:9-11
determining, for the VM, total CPU utilization attributable to the VM by summing the determined CPU utilization allocated to the VM by the scheduler and the determined CPU utilization of the domain... vSphere allegedly calculates a "%USED" metric using a formula that includes summing the %RUN and %SYS values. ¶¶173, 175 col. 14:12-17

Identified Points of Contention

  • Scope Questions:
    • Does the accused VMware "VMkernel," which serves as the host operating system and contains device drivers, meet the definition of a "driver domain that is isolated from the plurality of VMs" as required by the ’424 Patent? The complaint's own diagrams show close interaction between the VMs and the VMkernel (Compl. ¶100, Fig. 6).
    • For the ’707 Patent, is the VMkernel, which hosts the VMM as a process running on top of it, truly "separate from" the VMM as the claim requires? This architectural relationship may be a central point of dispute.
  • Technical Questions:
    • Does the complaint provide sufficient evidence that vSphere's statistical metrics like %SYS are determined "based on said communication" (i.e., specific resource requests from a VM), as claimed, rather than being general measurements of system overhead?
    • The complaint presents a formula for %USED that involves both addition and subtraction (%RUN + %SYS - %OVRLP) (Compl. ¶175). A question for the court will be whether this calculation meets the '707 Patent's requirement of determining total utilization "by summing" the two component utilization values.

V. Key Claim Terms for Construction

  • The Term: "driver domains that are isolated from the plurality of VMs" (’424 Patent, Claim 1)

  • Context and Importance: The definition of "isolated" is critical to determining if the accused vSphere architecture infringes. Defendants may argue their VMkernel is a deeply integrated component of the hypervisor, not an "isolated" domain, while Plaintiff may argue for a functional or logical definition of isolation.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The patent specification may describe isolation in terms of fault tolerance or functional separation (e.g., a failure in a driver domain does not crash the entire system), which could support a reading that does not require complete structural separation.
    • Evidence for a Narrower Interpretation: The figures or detailed description in the ’424 Patent may depict the "driver domains" as entirely separate virtual machines or partitions, running parallel to the user VMs, suggesting a requirement for a higher degree of hardware or software separation than exists in the accused VMkernel architecture.

  • The Term: "domain... wherein the domain is separate from a virtual machine monitor (VMM)" (’707 Patent, Claim 1)

  • Context and Importance: This term's construction will likely determine infringement of the ’707 Patent. The complaint characterizes the accused VMM as a process running "on top of" the VMkernel (the alleged "domain") (Compl. ¶164). Whether a hosting entity can be considered "separate from" a process it hosts is a key question.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The specification may define "separate" in terms of distinct software modules or functional roles, which could allow for a hierarchical relationship like the one alleged in the accused products.
    • Evidence for a Narrower Interpretation: The patent may use language or figures that consistently depict the "domain" and the "VMM" as peer-level, distinct software components without an explicit hosting relationship, which would support a narrower definition that the accused architecture may not meet.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges both induced and contributory infringement. Inducement is based on allegations that Defendants provide documentation, technical support, marketing materials, and interactive "Hands-on Labs" that instruct and encourage customers to use the accused vSphere products in an infringing manner (Compl. ¶¶131-137, 194-200). The complaint includes a screenshot of an interface for a user to "Add Rule" for auto-scaling, which relates to the '893 patent's infringement theory (Compl. ¶275, Fig. 41). Contributory infringement is alleged on the basis that the accused software is specially made to practice the claimed methods and has no substantial non-infringing use (Compl. ¶¶142-143).
  • Willful Infringement: The complaint alleges willful infringement based on extensive pre-suit knowledge. It alleges VMware was aware of the ’424 Patent as early as August 2012, the ’707 Patent as early as 2014 via a related patent family, the ’891 Patent as early as September 2011, the ’893 Patent as early as July 2014, and the ’122 Patent as early as August 2013, all through citations made by or against VMware and Symantec during patent prosecution (Compl. ¶¶117, 184-185, 238, 292, 334). This knowledge is alleged to be imputed to Broadcom upon its acquisition of VMware (Compl. ¶124). The complaint also points to previous jury verdicts finding VMware's infringement to be willful in other cases as evidence of a "culture of copying" (Compl. ¶155).

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

  • A core issue will be one of architectural mapping: Can the software components of VMware’s integrated vSphere platform—specifically the VMkernel and the VMM processes it runs—be mapped onto the patent claims’ requirements for "isolated driver domains" and domains "separate from a VMM"? The resolution will depend on whether these terms are construed to require structural separation or if a functional distinction is sufficient.
  • A second key issue will be one of causal linkage: Does the complaint and its evidence establish that the accused products' statistical performance metrics (e.g., %SYS, %RUN) are calculated "based on" the specific communications from individual VMs, as required by the claims? The case may turn on whether Plaintiff can prove this direct link or if Defendants can show the metrics are merely general system-level calculations that lack the claimed specificity.
  • Finally, a central question will be one of scienter: Given the extensive and specific allegations of pre-suit knowledge based on years of patent prosecution citations, the issue of willfulness will be prominent. The court will need to determine whether this alleged knowledge created an objectively high risk of infringement and, if so, whether Defendants' actions in continuing to market the accused products constituted egregious conduct.