DCT
1:18-cv-01776
Vertiv Corp v. Svo Building One LLC
Key Events
Complaint
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Vertiv Group Corporation and Vertiv Corporation (Ohio)
- Defendant: SVO Building One, LLC (Delaware)
- Plaintiff’s Counsel: O'Rourke Law Office, LLC; Procopio, Cory, Hargreaves & Savitch LLP
- Case Identification: 1:18-cv-01776, D. Del., 11/09/2018
- Venue Allegations: Venue is alleged to be proper in the District of Delaware because the Defendant is a Delaware limited liability company and therefore resides in the district.
- Core Dispute: Plaintiff alleges that Defendant, after terminating a data center construction agreement, continues to use Plaintiff's patented power supply and thermal management systems and misappropriate its trade secrets despite Plaintiff having revoked a previously granted license to the intellectual property.
- Technical Context: The technologies relate to high-availability power and cooling systems, which are critical infrastructure components for large-scale data centers that support modern internet and communications services.
- Key Procedural History: The complaint alleges that the parties entered into an agreement for Plaintiff to design and build a data center for Defendant, which included a "limited, non-exclusive, not-transferable, revocable license" to use Plaintiff's intellectual property. Following disputes over payment and scope of work, Defendant terminated the agreement in July 2018. Plaintiff subsequently issued a written notice in August 2018 revoking the license and demanding Defendant cease all use of its intellectual property. The complaint alleges this use has continued, forming the basis for the infringement and trade secret claims. A related contract dispute is the subject of a separate arbitration proceeding in California.
Case Timeline
| Date | Event |
|---|---|
| 2000-10-27 | Earliest Priority Date for ’124 and ’048 Patents |
| 2003-05-13 | ’048 Patent Issued |
| 2004-02-10 | Earliest Priority Date for ’082 and ’804 Patents |
| 2005-07-12 | ’124 Patent Issued |
| 2008-04-01 | ’082 Patent Issued |
| 2008-12-02 | ’804 Patent Issued |
| 2011-04-19 | Earliest Priority Date for ’404 and ’424 Patents |
| 2015-05-26 | ’404 Patent Issued |
| 2016-04-19 | ’424 Patent Issued |
| Late 2016 | Defendant SVO contacted Plaintiff Vertiv regarding the data center project |
| 2017-05 | Parties entered into the Lump Sum Turnkey Agreement |
| 2017-07-27 | Defendant issued a purchase order for "Phase 1" of the project |
| 2018-04 | Commissioning tests of Phase 1 were conducted |
| 2018-07 | Defendant SVO terminated the Agreement with Vertiv |
| 2018-08-09 | Plaintiff Vertiv provided written notice revoking SVO's license to its IP |
| 2018-11-09 | Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 7,352,082 - "Transfer Switch Device and Method," issued April 1, 2008
The Invention Explained
- Problem Addressed: When switching a load between two unsynchronized AC power sources, a downstream transformer can experience "saturation" due to a DC flux build-up during the transfer event. This saturation can cause large, undesirable inrush currents that may trip protective breakers or damage equipment (U.S. Patent No. 7,352,082, col. 1:20-46).
- The Patented Solution: The invention is a method and device that actively computes the "volt-second area" under the waveforms of both the current power source and the target alternate source in real time. By calculating these areas, the controller can determine an optimal moment to perform the switch, ensuring that the volt-second area applied before the switch is appropriately balanced by the area applied after the switch, thereby minimizing or eliminating the DC flux build-up and preventing transformer saturation (U.S. Patent No. 7,352,082, col. 2:1-11, Abstract).
- Technical Importance: This control method allows for rapid and safe power transfers between sources in critical applications like data centers, even when the sources are not perfectly synchronized, enhancing system reliability.
Key Claims at a Glance
- The complaint asserts at least dependent claim 4 (Compl. ¶69).
- Essential elements of asserted method claim 4 include:
- Deactivating the first switch to disconnect the first voltage source from the load;
- Computing in substantially real time the volt-second areas under voltage waveforms of the first and second voltage sources;
- Assigning a polarity to each voltage-second area based on the polarity of the corresponding voltage;
- Determining a switching time to minimize downstream saturation current based on the sum of the absolute values of the areas under the waveforms of the first and second voltage sources being approximately equal to the absolute value of the area under the waveform of a complete half cycle of the second voltage, and their polarities being the same; and
- Connecting the second voltage source to the load at the determined switching time.
U.S. Patent No. 7,459,804 - "Static Transfer Switch Device and Method," issued December 2, 2008
The Invention Explained
- Problem Addressed: In static transfer switches using silicon controlled rectifiers (SCRs), there are cases where the SCRs will not naturally "commutate" (turn off) for a significant period. This can prevent the controller from turning on the alternate source at the optimal time without creating a "cross conduction" situation where both sources are momentarily connected, which can extend transfer time and increase voltage disturbance (U.S. Patent No. 7,459,804, col. 1:57-67).
- The Patented Solution: The invention describes a control method for an SCR-based switch where, upon a predetermined condition (e.g., failure of the primary source), the controller "temporarily pulses on" the SCRs for the alternate source. This pulse is designed to force the primary source's SCRs to turn off. Subsequently, after the primary source is disconnected, the controller "indefinitely turns on" the alternate source's SCRs to maintain power to the load (U.S. Patent No. 7,459,804, col. 2:13-25, Abstract). This two-step activation (pulse then indefinite on) allows for a more controlled and rapid transfer.
- Technical Importance: This technique provides a method to actively force commutation in static switches, improving the speed and reliability of power transfers in critical systems.
Key Claims at a Glance
- The complaint asserts at least claims 1, 7, and 8 (Compl. ¶77). Claim 7 is an independent apparatus claim.
- Essential elements of asserted independent claim 7 include:
- A first silicon controlled rectifier connected to a voltage source;
- A second silicon controlled rectifier connected to a second voltage source;
- A controller connected to the first and second silicon controlled rectifiers to activate and deactivate them to selectively connect one to a load;
- The controller having inputs for receiving voltage level signals, wherein upon a predetermined condition, the controller temporarily pulses on the second silicon controlled rectifier and thereafter, indefinitely turns on the second silicon controlled rectifier to maintain power to the load.
U.S. Patent No. 9,038,404 - "High Efficiency Cooling System," issued May 26, 2015
Technology Synopsis
The patent describes a multi-stage cooling system for data centers that operates in different modes to improve efficiency. It can use a standard "direct expansion" refrigeration mode or, when outside temperatures are low enough, a "pumped refrigerant economizer" mode that circulates refrigerant with a liquid pump instead of an energy-intensive compressor (Compl. ¶85.e, h). A controller determines the optimal mode of operation for upstream and downstream cooling stages based on cooling demand and ambient conditions (Compl. ¶85.g).
Asserted Claims
At least claim 1 (Compl. ¶85).
Accused Features
The complaint alleges that Vertiv's "DSE cooling system" embodies the claimed invention (Compl. ¶84-85).
U.S. Patent No. 9,316,424 - "Multi-Stage Cooling System with Tandem Compressors and Optimized Control of Sensible Cooling and Dehumidification," issued April 19, 2016
Technology Synopsis
The patent describes a cooling system with tandem compressors, each comprising a fixed-capacity and a variable-capacity compressor. A controller manages these compressors in upstream and downstream cooling stages based on a "Call for Cooling" and a "Call for Dehumidification" (Compl. ¶93.e, g). The control logic is designed to optimize performance based on whether cooling needs are ramping up or down and whether dehumidification is required (Compl. ¶93.g).
Asserted Claims
At least claim 1 (Compl. ¶93).
Accused Features
The complaint alleges that Vertiv's "DSE cooling system" practices the claimed control methods for tandem compressors (Compl. ¶92-93).
U.S. Patent No. 6,917,124 - "Uninterruptible Power Supply," issued July 12, 2005
Technology Synopsis
The patent describes an uninterruptible power supply (UPS) architecture. The key feature is a control system comprising three distinct microprocessors: one acting as an overall controller, a second controlling the rectifier, and a third controlling the inverter (Compl. ¶101.d). These three microprocessors are architected to communicate with each other via a "common global memory" (Compl. ¶101.e).
Asserted Claims
At least claim 1 (Compl. ¶101).
Accused Features
The complaint alleges that Vertiv's "EXL S1 UPS" utilizes this specific three-microprocessor control architecture (Compl. ¶100-101).
U.S. Patent No. 6,563,048 - "Ancillary Cabinet System for an Uninterruptible Power Supply," issued May 13, 2003
Technology Synopsis
The patent describes a mechanical system for ancillary cabinets used with a UPS, such as battery cabinets. The claims focus on specific physical components designed to facilitate service, including a bay, at least one guide attached to the bay, a tray supported on the guide, and an "adjustable service shelf" that can attach to the cabinet to support the tray when it is removed from the bay (Compl. ¶109).
Asserted Claims
At least claims 7 and 18 (Compl. ¶109).
Accused Features
The complaint alleges that Vertiv's "PPC Second Generation Power Distribution Cabinet" contains the claimed bay, guide, tray, and adjustable service shelf configuration (Compl. ¶108-109).
III. The Accused Instrumentality
Product Identification
- The accused instrumentalities are specific data center infrastructure products designed and manufactured by Plaintiff Vertiv (or its predecessor, Liebert) and provided to Defendant SVO for use in the McClellan Park data center project (Compl. ¶3, ¶68, ¶76, ¶84, ¶92, ¶100, ¶108). These include:
- STS2 Static Transfer Switch 2
- DSE cooling system (e.g., DA150 and DA125)
- EXL S1 UPS
- PPC Second Generation Power Distribution Cabinet
Functionality and Market Context
- These products constitute the core power and thermal management systems for a large data center (Compl. ¶1-2). The complaint alleges that these systems are "cutting-edge" and "essential" to the operation of SVO's data center (Compl. ¶28). The functionality of each product is alleged to directly correspond to the patented technology. For example, the STS2 switch is alleged to perform the specific volt-second balancing and SCR pulsing methods of the '082 and '804 Patents, respectively (Compl. ¶69, ¶77). The DSE cooling system is alleged to employ the multi-stage, multi-mode, and tandem-compressor control logic of the '404 and '424 Patents (Compl. ¶85, ¶93).
- The complaint alleges that SVO continues to "use" these products after Vertiv revoked the license that permitted such use, forming the basis of the infringement claims (Compl. ¶67-68, ¶75-76).
IV. Analysis of Infringement Allegations
No probative visual evidence provided in complaint.
7,352,082 Infringement Allegations
| Claim Element (from Method Claim 4) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| Deactivates the first switch to disconnect the first voltage source from the load | The STS2 switch controller deactivates the switch connected to the primary voltage source. | ¶69.d.i | col. 2:1-4 |
| Computes in substantially real time the volt-second areas under voltage waveforms of the first and second voltage sources | The controller in the STS2 switch computes volt-second areas under the voltage waveforms. | ¶69.d.ii | col. 2:4-6 |
| Assigns a polarity to each voltage-second area based on the polarity of the corresponding voltage | The controller assigns polarity to the calculated areas based on the voltage polarity. | ¶69.d.iii | col. 3:32-37 |
| Determines a switching time to minimize downstream saturation current based on the sum of the absolute values of the areas...being approximately equal to the absolute value of the area under...a complete half cycle of the second voltage... | The controller determines the optimal switching time by comparing the summed volt-second areas to the area of a half-cycle of the target voltage. | ¶69.d.iv | col. 4:1-12 |
| Connects the second voltage source to the load at the determined switching time | At the calculated optimal time, the controller connects the alternate voltage source to the load. | ¶69.d.v | col. 2:9-11 |
- Identified Points of Contention:
- Scope Questions: A central legal question may be whether the continued use of a lawfully-acquired product constitutes infringement after the seller revokes a "revocable" license that was part of the original purchase agreement. The dispute may focus on the terms of the agreement and whether the license was validly revoked (Compl. ¶5, ¶41).
- Technical Questions: What evidence does the complaint provide that the STS2 switch performs the specific computation recited in claim 4? The complaint's primary assertion is that the claim was "drafted to incorporate the features" of the product (Compl. ¶69), which suggests a direct correspondence but does not detail the underlying software or hardware operations.
7,459,804 Infringement Allegations
| Claim Element (from Independent Claim 7) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a first silicon controlled rectifier connected to a voltage source | The STS2 switch contains a first SCR connected to a voltage source. | ¶77.a | col. 3:1-2 |
| a second silicon controlled rectifier connected a second voltage source | The STS2 switch contains a second SCR connected to a second voltage source. | ¶77.b | col. 3:3-4 |
| a controller connected to the first and second silicon controlled rectifiers to activate and deactivate...to selectively connect the first or the second...to a load | The STS2 switch contains a controller that activates and deactivates the SCRs to connect one of the sources to the load. | ¶77.c | col. 3:9-13 |
| the controller having inputs for receiving signals representing the voltage levels...wherein upon a predetermined condition, the controller temporarily pulses on the second silicon controlled rectifier and thereafter, indefinitely turns on the second silicon controlled rectifier to maintain power to the load. | The controller monitors voltage levels and, upon a trigger event, first pulses the second SCR on and then turns it on indefinitely to power the load. | ¶77.d | col. 2:19-25 |
- Identified Points of Contention:
- Scope Questions: Does the control logic of the STS2 switch perform two distinct actions that meet the claim limitations of "temporarily pulses on" followed by "indefinitely turns on"? The defense could question whether the accused operation is a single, continuous turn-on event rather than the two-step process required by the claim.
- Technical Questions: What is the duration and nature of the "pulse" in the accused device's operation, and does it serve the technical purpose of forced commutation described in the '804 Patent?
V. Key Claim Terms for Construction
For the ’082 Patent:
- The Term: "computes in substantially real time the volt-second areas"
- Context and Importance: This term is critical because it defines the core technical action of the invention. The dispute will likely focus on what specific calculations the accused device must perform, how quickly ("substantially real time"), and with what degree of precision to infringe.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification describes the computation generally as integrating the voltage over time, stating "the controller 134 continuously computes the target volt-seconds value" (U.S. Patent No. 7,352,082, col. 3:62-63). This could support an argument that any method of numerical integration performed by a processor meets the limitation.
- Evidence for a Narrower Interpretation: The detailed flow chart in FIG. 3 shows a specific discrete process where values are sampled, added to a running total (At(k+1)=At(k)+Vload(k)), and reset at zero-crossings (U.S. Patent No. 7,352,082, col. 4:10-14). A defendant might argue this specific algorithm defines the scope of the claim.
For the ’804 Patent:
- The Term: "temporarily pulses on ... and thereafter, indefinitely turns on"
- Context and Importance: This two-part action distinguishes the claimed invention from a simple transfer switch. The case may turn on whether the accused STS2 switch performs two distinct control steps corresponding to these limitations, or a single, continuous turn-on procedure. Practitioners may focus on this term because it defines the novel control sequence alleged to solve the problem of forced commutation.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The abstract states the controller "temporarily turns on the appropriate alternate source devices... so that the switches will naturally commutate off at the next current zero cross. Subsequently, the... control logic will permanently turn on these switches" (U.S. Patent No. 7,459,804, Abstract). This suggests any initial turn-on signal that is shorter than a permanent signal could be a "pulse."
- Evidence for a Narrower Interpretation: The detailed description describes the pulse as being for a "brief period of time" and potentially "repeated as many times as necessary" before the permanent turn-on occurs (U.S. Patent No. 7,459,804, col. 2:19-23). This could support a narrower definition requiring a discrete, short-duration signal that is functionally separate from the final, continuous "on" state.
VI. Other Allegations
- Indirect Infringement: The complaint focuses on allegations of direct infringement by "using" the accused products and does not contain separate counts for induced or contributory infringement (Compl. ¶67, ¶75, ¶83, ¶91, ¶99, ¶107).
- Willful Infringement: While the patent counts do not use the term "willful," the complaint alleges that Defendant continued to use the accused products after Plaintiff explicitly revoked Defendant’s license in a written notice dated August 9, 2018 (Compl. ¶41, ¶68, ¶76). These allegations of post-notice conduct may support a future claim for willful infringement. The associated trade secret claims explicitly allege that Defendant's misappropriation was "willful and malicious" (Compl. ¶53, ¶62).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of contract and license scope: Does the post-termination, post-license-revocation use of equipment that was sold and delivered by the patentee during the life of a "revocable" license agreement constitute patent infringement? The resolution will likely depend on the specific terms of the contract between the parties and the validity of the license revocation.
- A central infringement question will be one of evidentiary proof: The complaint's infringement theory rests on the assertion that the asserted claims were drafted to read on Plaintiff's own commercial products. The key question for the court will be whether the technical operation of these products, as used by the Defendant, maps to every element of the asserted claims as construed.
- A further question relates to the interplay between patent and trade secret claims: The complaint alleges infringement of patented technology alongside misappropriation of related trade secrets, such as engineering calculations and system configurations (Compl. ¶45). The case will explore the boundary between publicly disclosed inventions and the confidential know-how allegedly used to implement them in Defendant's specific data center.