Valtrus Innovations Ltd v. NetApp Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Valtrus Innovations Ltd. and Key Patent Innovations Ltd. (Ireland)
  • Defendant: NetApp, Inc. (Delaware)
  • Plaintiff’s Counsel: Fabricant LLP
• Case Identification: 2:25-cv-00517, E.D. Tex., 05/09/2025
• Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendant maintains a place of business in Plano, Texas, and has manufacturing and supply chain operations in the state, including in San Antonio.
• Core Dispute: Plaintiff alleges that Defendant’s data storage and management products, including NetApp ONTAP and SANtricity, infringe six patents related to clustered computing systems, dynamic storage control, data security, device profile migration, performance monitoring, and grid computing environments.
• Technical Context: The technologies at issue pertain to the management, performance, and security of large-scale, enterprise-class data storage systems, a critical component of modern data centers and cloud infrastructure.
• Key Procedural History: The complaint alleges that Defendant had pre-suit knowledge of several patents-in-suit. Specifically, it alleges Defendant cited the families of the ’416 and ’571 patents during the prosecution of its own patent applications, establishing knowledge dates as early as 2015. For the ’488 and ’832 patents, knowledge is alleged based on correspondence, including claim charts, sent to Defendant in 2021 and 2022.

Case Timeline

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

U.S. Patent No. 8,370,416 - “Compatibility Enforcement in Clustered Computing Systems,” Issued February 5, 2013

The Invention Explained

• Problem Addressed: The patent’s background section describes the technical challenges of ensuring hardware, software, and firmware compatibility within clustered computing systems, particularly when system configurations are modified (’416 Patent, col. 1:12-24).
• The Patented Solution: The invention proposes a method for enforcing compatibility through a licensing mechanism that stores information about the cluster’s characteristics. This information includes a "bundle-type parameter," which defines cluster-level attributes like size, and "node license parameters" for individual computing nodes (’416 Patent, Abstract). The system activates a computing cluster only after verifying that the number and type of nodes comply with the rules defined by the bundle-type parameter, thereby automating compatibility checks during cluster initialization and expansion (’416 Patent, col. 2:1-20).
• Technical Importance: This approach provides an automated framework for managing complex licensing and hardware compatibility rules in dynamic, scalable clustered environments, which can reduce administrative overhead and prevent the formation of non-compliant system configurations (’416 Patent, Abstract).

Key Claims at a Glance

• The complaint asserts infringement of at least independent claim 1 (Compl. ¶29).
• The essential elements of independent claim 1 include:
  • Storing license information for a computing cluster in a memory module associated with a computing node.
  • The licensing information includes a "bundle-type parameter" (identifying cluster size and another characteristic) and "one or more node license parameters" (identifying a node characteristic).
  • Initializing the computing cluster in a first computing node.
  • Adding one or more available computing nodes to the computer cluster.
  • Activating the computing cluster when the number of nodes complies with the "bundle-type parameter".
• The complaint does not explicitly reserve the right to assert dependent claims for this patent.

U.S. Patent No. 8,370,571 - “Transfer Control of a Storage Volume Between Storage Controllers in a Cluster,” Issued February 5, 2013

The Invention Explained

• Problem Addressed: In clustered storage architectures, one controller is often designated as the "optimal" owner for a specific storage volume. If client requests are routed through other, non-optimal controllers due to network changes or failures, performance degrades. Manually reassigning volume ownership to adapt to dynamic workloads is inefficient (’571 Patent, col. 1:52-64).
• The Patented Solution: The invention describes a method where the current owner-controller of a storage volume monitors both direct "client requests" and "proxy requests" (requests forwarded from other controllers in the cluster). By comparing the number of client versus proxy requests, the controller can automatically determine that another controller has become a more efficient path for I/O and initiate a transfer of ownership of the volume to that controller (’571 Patent, Abstract; col. 3:1-12).
• Technical Importance: This method enables dynamic, automated load balancing in a clustered storage environment by reassigning volume ownership based on actual traffic patterns, thereby optimizing I/O performance without manual intervention (’571 Patent, col. 2:5-12).

Key Claims at a Glance

• The complaint asserts infringement of at least independent claim 12 (Compl. ¶47).
• The essential elements of independent claim 12 include:
  • A first storage controller (the current owner) receiving "client requests" from client computers and "proxy requests" from other storage controllers.
  • Based on the numbers of these requests, determining that a transfer of ownership should be performed to a second storage controller.
  • This determination includes determining that the second controller has provided a higher number of "proxy requests" than the number of "client requests".
  • Performing the transfer of ownership in response to the determination.
• The complaint does not explicitly reserve the right to assert dependent claims for this patent.

U.S. Patent No. 7,904,686 - “Data Security for Use with a File System,” Issued March 8, 2011

Technology Synopsis

The patent addresses data security in file systems by proposing a method to obscure the physical location of data on a storage device (’686 Patent, Abstract). It describes applying a mapping function to the logical data block numbers listed in a file's index node (inode) to generate different physical block addresses, which may prevent unauthorized file reconstruction from raw disk access (Compl. ¶21; ’686 Patent, col. 2:1-14).

Asserted Claims

At least independent claim 1 (Compl. ¶63).

Accused Features

The complaint accuses NetApp's use of Apache Software Foundation's Hadoop Distributed File System ("HDFS"), alleging that the HDFS NameNode maps logical blocks to physical DataNode locations in an infringing manner (Compl. ¶21, 65-66).

U.S. Patent No. 7,856,488 - “Electronic Device Profile Migration,” Issued December 21, 2010

Technology Synopsis

This patent addresses the challenge of migrating a server's unique identity between physical devices in a network (’488 Patent, col. 1:8-21). The invention describes a system where a "profile"—comprising low-level hardware identifiers like MAC addresses or Fibre Channel World Wide Names—is migrated from a first electronic device to a second, allowing the second device to assume the network identity of the first (’488 Patent, Abstract).

Asserted Claims

At least independent claim 1 (Compl. ¶78).

Accused Features

The complaint targets NetApp ONTAP software, alleging that its functionality for migrating a Logical Interface (LIF) and its associated identifiers (such as a World Wide Port Name) from one network port to another constitutes infringement (Compl. ¶19, 79-81).

U.S. Patent No. 7,120,832 - “Storage Device Performance Monitor,” Issued October 10, 2006

Technology Synopsis

The patent addresses the problem of latent or "recoverable" failures in storage devices that degrade performance before a total failure occurs (’832 Patent, col. 1:65-2:2). It discloses a method for monitoring performance by intercepting communications between a computer and a storage device, analyzing metrics like access time or error rates, and proactively reallocating data on the storage device to enhance performance and preempt data loss (’832 Patent, Abstract).

Asserted Claims

At least independent claim 25 (Compl. ¶93).

Accused Features

The complaint accuses NetApp SANtricity software and NetApp systems that implement Apache Kafka Streams using RocksDB, Apache Cassandra, and/or Apache HBase of infringing, alleging these systems monitor performance and reallocate data via processes like dynamic data distribution or compaction (Compl. ¶22, 94-112).

U.S. Patent No. 7,640,332 - “System and Method for Hot Deployment/Redeployment in Grid Computing Environment,” Issued December 29, 2009

Technology Synopsis

This patent addresses the need to update applications in a distributed or grid computing environment without service interruption (’332 Patent, col. 1:52-58). The invention describes a "hot deployment" method where a new version of an application is added to a repository, a discovery service identifies which grid nodes are running the old version, and a client manager on each affected node is notified to deploy the new version without a shutdown (’332 Patent, Abstract).

Asserted Claims

At least independent claim 1 (Compl. ¶123).

Accused Features

The complaint targets NetApp systems, such as NetApp ONTAP and NetApp Trident, that integrate with Kubernetes to perform "rolling updates," which it alleges is an infringing form of hot deployment (Compl. ¶23, 122, 125).

III. The Accused Instrumentality

Product Identification (for ’416 Patent)

NetApp's Cluster Management ONTAP (Compl. ¶28).

Functionality and Market Context

NetApp ONTAP is alleged to be an operating system for creating and managing clustered computing systems (Compl. ¶30). The complaint alleges it performs steps of initializing a cluster, adding nodes, and managing licenses (Compl. ¶30, 31, 35). Licenses are alleged to be based on parameters such as storage capacity or specific features (e.g., CIFS protocol support), and can be associated with the cluster as a whole or locked to individual nodes (Compl. ¶32, 33). A screenshot from the NetApp OnCommand System Manager shows an interface for viewing various license types assigned to specific cluster nodes (Compl. p. 11).

Product Identification (for ’571 Patent)

NetApp SANtricity on E-Series controllers (Compl. ¶46).

Functionality and Market Context

NetApp SANtricity is alleged to be software used with E-Series storage arrays deployed in cluster environments (Compl. ¶48, p. 17). The complaint alleges it includes an "automatic load balancing" (ALB) feature that dynamically transfers ownership of a storage volume between controllers to optimize I/O workload distribution (Compl. ¶50, p. 20). This system allegedly uses an "I/O shipping" mechanism where a request sent to a non-owning controller is forwarded internally to the controller that currently owns the target volume (Compl. ¶49). A diagram in the complaint illustrates this I/O shipping concept, distinguishing between a "Normal IO" path to the owning controller and a "Shipped IO" path that is rerouted from a non-owning controller (Compl. p. 19).

IV. Analysis of Infringement Allegations

’416 Patent Infringement Allegations

Identified Points of Contention (’416 Patent)

• Scope Questions: A central dispute may be whether NetApp's "capacity license" and feature-based licenses meet the specific claim definition of a "bundle-type parameter that identifies a size of the cluster and at least one additional bundle-type characteristic." Defendant may argue that the patent’s term implies a more specific, pre-packaged software bundle, whereas its licensing is based on more granular or distinct parameters.
• Technical Questions: The analysis may question whether the act of "activating the computing cluster" as alleged corresponds to the claimed step. The complaint alleges that installing a standard license "entitles a node to the licensed functionality" (Compl. p. 14), but it may be disputed whether this constitutes "activating the computing cluster" as a whole in the manner required by the claim.

’571 Patent Infringement Allegations

Identified Points of Contention (’571 Patent)

• Scope Questions: The dispute may focus on whether "I/O shipping" in the accused product is synonymous with the claimed "proxy requests." Defendant may argue the terms are technically distinct or that its implementation differs from the patent's description.
• Technical Questions: A key technical question will be what NetApp's ALB algorithm actually measures. The complaint cites documentation that the system monitors "I/O workload statistics" including IOPS and bandwidth (Compl. p. 21). Defendant may argue that its algorithm does not perform the specific comparison recited in the claim—counting and comparing the number of proxy requests versus client requests—but instead relies on different, more holistic performance metrics that lead to a similar outcome through a non-infringing method.

V. Key Claim Terms for Construction

For the ’416 Patent

• The Term: "bundle-type parameter"
• Context and Importance: This term is central to defining the scope of the claimed licensing system. The infringement case depends on whether NetApp's licensing characteristics, such as "Capacity license" (Compl. ¶32), qualify as a "bundle-type parameter." Practitioners may focus on this term because its construction will determine whether a wide range of modern, flexible licensing models fall within the claim's scope.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification describes the parameter as identifying "a characteristic of the cluster" (’416 Patent, col. 3:17-18) and provides non-limiting examples such as "size ranges" (’416 Patent, col. 4:51-53), which could support construing the term to cover general cluster attributes like licensed storage capacity.
  • Evidence for a Narrower Interpretation: The term "bundle" itself, along with phrases like "original bundle SKU" (’416 Patent, col. 7:4), could support a narrower construction limited to a pre-packaged set of hardware and software components sold as a single unit, which Defendant may argue is distinct from a standalone capacity license.

For the ’571 Patent

• The Term: "determining that the second storage controller has provided a higher number of proxy requests for the storage volume than the number of the client requests"
• Context and Importance: This clause recites the specific logic for triggering an ownership transfer. Infringement hinges on whether the accused ALB feature performs this exact comparison. Practitioners may focus on this term because it presents a potential mismatch between specific claim language and the potentially more complex, multi-factor algorithm of the accused product.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent's summary suggests the overall goal is to transfer ownership when a different controller becomes "more efficient" or "optimal" (’571 Patent, col. 2:5-12). This context might support an interpretation where the specific comparison is an example of a broader principle of identifying the controller receiving the most traffic for a volume.
  • Evidence for a Narrower Interpretation: The claim language is highly specific, requiring a direct comparison between the number of proxy requests and the number of client requests. The specification reinforces this by stating the owner "monitors the client requests and the proxy requests" and transfers ownership if it detects "a larger number of proxy requests ... than there are client requests" (’571 Patent, col. 3:62-4:2). This could support a narrow construction that requires an explicit counting and comparison of these two request types, not just an analysis of overall I/O load.

VI. Other Allegations

• Indirect Infringement: The complaint alleges that Defendant induces infringement by supplying its customers with products like ONTAP and SANtricity along with instructional materials, such as websites and product literature, that allegedly guide users to operate the products in an infringing manner (Compl. ¶40, 56).
• Willful Infringement: Willfulness is alleged for all patents-in-suit. For the ’416 Patent, the complaint alleges pre-suit knowledge based on Defendant citing the ’416 patent family in its own patent application, with knowledge alleged as of at least December 15, 2015 (Compl. ¶39, fn. 11). For the ’571 Patent, similar allegations are made based on Defendant citing the patent in its own application, with knowledge alleged as of at least November 10, 2015 (Compl. ¶55, fn. 23). The complaint further alleges a corporate policy of not reviewing patents of others as a basis for willful blindness (Compl. ¶39, 55).

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

• A core issue will be one of definitional scope: For the ’416 patent, the case will likely turn on whether NetApp's flexible, capacity-based software licensing model can be construed to meet the patent's more specific language of a "bundle-type parameter," a term potentially rooted in pre-packaged hardware/software offerings.
• A key evidentiary question will be one of functional equivalence: For the ’571 patent, the dispute will center on whether NetApp's Automatic Load Balancing algorithm, which analyzes various "I/O workload statistics," performs the precise comparison recited in claim 12—counting client versus proxy requests—or if there is a fundamental mismatch in its technical operation.
• A third significant issue, particularly for damages, will be willfulness: Given the allegations that Defendant cited the asserted patents in its own prosecution history years before the suit was filed, the questions of when Defendant acquired knowledge and whether its continued conduct was willful will be central factual and legal determinations.