Hybir Inc v. Veeam Software Corp

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Hybir Inc (Colorado)
  • Defendant: Veeam Software Corp (Delaware)
  • Plaintiff’s Counsel: Meister Seelig & Fein LLP
• Case Identification: 1:20-cv-10329, D. Mass., 04/05/2024
• Venue Allegations: Venue is alleged based on Defendant maintaining a physical office, conducting business, and committing alleged acts of infringement within the District of Massachusetts.
• Core Dispute: Plaintiff alleges that Defendant’s backup and replication software infringes a patent related to source-side data deduplication for online backup systems.
• Technical Context: The technology concerns methods for making data backups more efficient by identifying and storing only a single copy of unique data blocks from multiple users or systems in a shared repository.
• Key Procedural History: The complaint notes that the asserted patent was the subject of two Inter Partes Review (IPR) proceedings initiated by Defendant Veeam. The Patent Trial and Appeal Board (PTAB) upheld the patentability of certain claims, a decision that was subsequently affirmed by the U.S. Court of Appeals for the Federal Circuit. This history significantly alters the landscape of assertable claims and may strengthen the surviving claims against future invalidity challenges based on patents and printed publications. The complaint also mentions a prior settled litigation involving the patent against another party.

Case Timeline

Date	Event
2006-05-05	U.S. Patent No. 8051043 Priority Date
2011-11-01	U.S. Patent No. 8,051,043 Issue Date
2014	Approximate Launch of Accused System
2019-12-17	Plaintiff Hybir Inc sends notice letter to Defendant Veeam
2024-02-23	Federal Circuit affirms PTAB decision upholding certain claims of the '043 Patent
2024-04-05	First Amended Complaint filed

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

U.S. Patent No. 8,051,043 - "Group Based Complete and Incremental Computer File Backup System, Process and Apparatus," issued November 1, 2011

The Invention Explained

• Problem Addressed: The patent identifies the inefficiency of traditional computer backup systems, which often store multiple, identical copies of the same file for different users, leading to "very large backups" and wasted storage space (Compl. ¶11; ’043 Patent, col. 1:36-43). Prior art methods for identifying duplicate data, such as using CRC-32 checksums, were described as unreliable for guaranteeing file uniqueness (Compl. ¶12; ’043 Patent, col. 1:49-53).
• The Patented Solution: The invention proposes a backup system that uses a "descriptor" to uniquely identify electronic data, such as a file or a portion of a file (’043 Patent, Abstract). By generating a descriptor for data on a user's machine (the source), the system can check if data with a matching descriptor already exists in a central, shared repository. If it does, the system does not need to re-upload the full data, thereby saving bandwidth and storage (’043 Patent, col. 2:16-34). Figure 5 of the patent, reproduced in the complaint, illustrates this concept by showing multiple user accounts (504a-c) whose inventories of descriptors (508) point to a shared set of files (512) in a common repository (Compl. ¶16).
• Technical Importance: This source-side data deduplication technique allows for more efficient management of large-scale backups, particularly in enterprise environments where many users may possess identical system or application files (Compl. ¶14; ’043 Patent, col. 10:45-55).

Key Claims at a Glance

• The complaint alleges infringement of "at least claim 1" and dependent claims 3, 4, 7, 16, 17, and 20 (’043 Patent, Compl. ¶24, ¶26). However, the complaint also states that as a result of prior IPR proceedings, claim 1 was cancelled while claims 3, 4, 7, 16, 17, and 20 were upheld as patentable (Compl. ¶10). The analysis below focuses on the elements of the cancelled independent claim 1, as it is the primary claim referenced in the complaint's infringement count (Compl. ¶24).
• Independent Claim 1 (Cancelled) of the ’043 Patent recites:
  • receiving, at a backup server, a first inventory of electronic data from a first remote storage medium, with the inventory comprising at least one descriptor;
  • the descriptor comprising a cryptographic signature computed from the actual file data;
  • comparing the descriptor to a list of descriptors associated with a second inventory of data stored on a backup data storage medium, where the second inventory contains data from a plurality of different storage mediums;
  • determining that the first descriptor substantially matches a second descriptor from the list; and
  • reporting to the first remote storage medium that the associated electronic data is already stored in the backup data storage medium.
• The complaint notes that dependent claims 3, 4, 7, 16, 17, and 20 are embodied in the Accused System (Compl. ¶24).

III. The Accused Instrumentality

Product Identification

The "Veeam Backup & Replication" backup solution, referred to as the "Accused System" (Compl. ¶18).

Functionality and Market Context

The Accused System is described as a software solution providing backup, recovery, and replication for virtual, physical, and cloud-based workloads (Compl. ¶19). The complaint alleges that a key feature of the Accused System is that it "deduplicates data on the source side," which is the central functionality accused of infringement (Compl. ¶19). The product is allegedly sold throughout the United States and has been available since at least 2014 (Compl. ¶18, ¶20).

IV. Analysis of Infringement Allegations

'043 Patent Infringement Allegations

The complaint alleges that the Accused System embodies all elements of at least claim 1, referencing an external Exhibit B which was not provided with the complaint (Compl. ¶24). Based on the complaint's narrative, the infringement theory is that Veeam’s source-side deduplication functionality meets the limitations of the patent's claims.

Claim Element (from Independent Claim 1)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
receiving, at a backup server, a first inventory of electronic data stored on a first remote storage medium, wherein the first inventory comprises at least one descriptor;	The Accused System allegedly operates by having a client-side component send information about data to be backed up to a central backup server.	¶18, ¶19	col. 2:16-21
wherein the at least one descriptor comprises a cryptographic signature computed based on the actual file data, the cryptographic signature uniquely identifying the electronic data to be backed-up;	The complaint alleges the Accused System performs "source side data identification" using "global data deduplication technologies," which suggests the creation of unique identifiers for data blocks.	¶6, ¶19	col. 2:38-40
comparing, at the backup server, the at least one descriptor of the first inventory to a list of descriptors associated with a second inventory of electronic data stored on a backup data storage medium...	To perform deduplication, the Accused System's backup server allegedly compares identifiers for new data against a list of identifiers for data already present in the backup repository.	¶19	col. 2:21-28
...wherein the second inventory of electronic data comprises shared electronic data from among a plurality of storage mediums including storage mediums different from the first remote storage medium...	The Accused System is allegedly sold to numerous customers, suggesting its backup repository contains shared data from a plurality of different sources, consistent with the patent's "group-based" model illustrated in Figure 5.	¶16, ¶19, ¶20	col. 6:49-55
determining that a first descriptor from the at least one descriptor of the first inventory substantially matches a second descriptor from the list of descriptors...	The core deduplication function of the Accused System allegedly involves identifying when an identifier for new data matches an identifier for data already stored.	¶19	col. 2:28-31
reporting, from the backup server, to the first remote storage medium that electronic data associated with the first descriptor is already stored in the backup data storage medium.	Upon finding a match, the Accused System allegedly informs the source-side client that the corresponding data block does not need to be transmitted, thus saving bandwidth.	¶14, ¶19	col. 2:32-34

• Identified Points of Contention:
  • Procedural Question: The complaint's primary infringement count centers on Claim 1 (Compl. ¶24), yet it acknowledges that this claim was cancelled in IPR proceedings (Compl. ¶10). A central issue for the court will be whether the complaint, as written, states a viable claim for relief or if Plaintiff must amend to base its allegations on the surviving dependent claims and establish how they are infringed.
  • Scope Questions: The meaning of "cryptographic signature" will be a critical point of dispute. The case may turn on whether the algorithm used by the Accused System for data identification qualifies as "cryptographic," as opposed to a non-cryptographic hash or checksum, which the patent specification distinguishes as a deficient prior art technique (’043 Patent, col. 1:49-58).
  • Technical Questions: The complaint does not specify how the Accused System technically operates. A key question is what evidence exists that Veeam’s product performs each specific step as claimed. For instance, what proof shows that the system reports back to the "first remote storage medium" that data is "already stored" in the precise manner required by the claim?

V. Key Claim Terms for Construction

The Term: "descriptor"

• Context and Importance: This term is foundational to the invention, defining the unique identifier used for deduplication. Its construction will determine the range of data identification techniques covered by the patent.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The Summary of the Invention states a descriptor "may be a combination of file metadata ... and cryptographic signature or signatures," suggesting the components are not rigidly fixed (’043 Patent, col. 2:38-40).
  • Evidence for a Narrower Interpretation: Asserted Claim 1 explicitly requires that the descriptor "comprises a cryptographic signature," which may be argued to narrow its scope for that claim. The specification also provides specific examples like "an MD5 hash, SHA256," suggesting the term refers to established hash functions (’043 Patent, col. 9:10-14).

The Term: "substantially matches"

• Context and Importance: This term of degree defines the test for determining if a piece of data is a duplicate. Its scope is central to the infringement analysis.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent does not appear to provide an explicit definition, which could support an argument for a broader meaning of functional equivalence rather than strict identity.
  • Evidence for a Narrower Interpretation: The patent’s reliance on "cryptographic signature[s]" generated from "actual file data" implies that two descriptors will match only if the underlying data is identical, supporting a narrow interpretation of an exact bit-for-bit match of the descriptors (’043 Patent, col. 2:38-44).

VI. Other Allegations

• Indirect Infringement: The complaint alleges both induced and contributory infringement. It asserts that Veeam had knowledge of the ’043 Patent at least as of a December 17, 2019 notice letter (Compl. ¶27, ¶28). Inducement is alleged based on Veeam providing user manuals, websites, support, and other instructions that guide customers to use the Accused System in an infringing manner (Compl. ¶22, ¶27).
• Willful Infringement: Willfulness is alleged based on Veeam’s continued sale of the Accused System after receiving the 2019 notice letter, which allegedly contained a "detailed claim chart setting forth the basis for infringement" (Compl. ¶29, ¶30). The complaint further alleges that Veeam has not modified its product or instructions and has not relied on a formal opinion of counsel, thereby demonstrating reckless disregard for Hybir Inc's patent rights (Compl. ¶32-¶34).

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

• A threshold procedural question will be one of viability: can the complaint proceed based on an infringement theory centered on the cancelled Claim 1? The resolution of this issue will dictate the future course of the litigation and may require the Plaintiff to re-plead its case around the specific language of the dependent claims that survived IPR.
• A core merits issue will be one of definitional scope: can the claim term "cryptographic signature" be construed to read on the specific data hashing or identification algorithm used by Veeam's Accused System? The outcome will likely depend on technical evidence distinguishing between cryptographic hashes and other forms of checksums, a distinction the patent itself highlights.
• A key evidentiary question will be one of technical proof: what specific evidence will be presented to show that the Accused System's architecture and methods—particularly its process for comparing data identifiers between a client and a shared, multi-user server repository—map onto the limitations of an asserted claim? The complaint's high-level allegations will need to be substantiated with detailed evidence of the product's internal operations.