DCT

1:19-cv-01075

Intellectual Ventures I LLC v. VMware Inc

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 6:19-cv-00449, W.D. Tex., 08/23/2019
  • Venue Allegations: Plaintiff alleges venue is proper because Defendant maintains regular and established places of business within the district, including offices in Austin, Texas, and has committed acts of patent infringement in the district.
  • Core Dispute: Plaintiff alleges that Defendant’s suite of virtualization and cloud computing products infringes five patents related to extensible network systems, dynamic resource management for virtual servers, secure multi-tenant networking, and quality of service for virtualized I/O.
  • Technical Context: The technologies at issue are foundational to modern cloud computing and enterprise data centers, enabling the efficient management, scaling, and isolation of virtual machines and their associated network and storage resources.
  • Key Procedural History: This filing is a First Amended Complaint. The complaint alleges that Defendant had pre-suit knowledge of U.S. Patent No. RE43051E1, noting that Defendant's own U.S. Patent No. 8,619,771, issued in December 2013, cited the RE43051 patent as a prior art reference.

Case Timeline

Date Event
1998-10-23 '752 Patent Priority Date
2000-03-15 RE '051 Patent Priority Date
2000-05-11 RE '686 and RE '726 Patents Priority Date
2007-12-07 RE '818 Patent Priority Date
2011-05-24 '752 Patent Issue Date
2011-09-20 RE '726 Patent Issue Date
2011-12-27 RE '051 Patent Issue Date
2013-12-13 VMware's U.S. Patent No. 8,619,771 issues, citing RE '051 patent
2013-12-31 RE '686 Patent Issue Date
2014-03-25 RE '818 Patent Issue Date
2019-08-23 First Amended Complaint Filing Date

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

U.S. Patent No. 7,949,752 - "NETWORK SYSTEM EXTENSIBLE BY USERS"

  • Issued: May 24, 2011 (Compl. ¶18)

The Invention Explained

  • Problem Addressed: The patent describes a problem wherein customizing network-delivered services for individual subscribers was difficult, slow, and expensive, requiring direct modification of the service provider’s software applications ('7949752'' Patent, col. 2:12-34).
  • The Patented Solution: The invention proposes augmenting a network system with an "agent system" that allows users to create and deploy their own software "agents" to perform customized tasks ('752 Patent, col. 2:54-63). These agents operate on behalf of a user to utilize network services, with "service wrappers" mediating the interaction and a monitoring system controlling the consumption of resources to protect the overall system ('752 Patent, Abstract; Fig. 1).
  • Technical Importance: The invention describes a framework for user-programmable network services, an approach that aimed to make networked applications more flexible and customizable for end-users (Compl. ¶¶38-39).

Key Claims at a Glance

  • The complaint asserts independent claim 9 (Compl. ¶45).
  • Essential elements of independent claim 9 (a system claim) include:
    • receiving data for creating a network-based agent;
    • invoking an execution of the network-based agent in response to receiving a URL that defines an event type and identifies the agent;
    • wherein the agent's execution uses a service and consumes a finite "service resource";
    • communicating a result of the operation over a network link.
  • The complaint also asserts claims 1-4, 6, 10-11, 13-14, and 22-26 (Compl. ¶44).

U.S. Patent No. RE 44,686 - "DYNAMICALLY MODIFYING THE RESOURCES OF A VIRTUAL SERVER"

  • Issued: December 31, 2013 (Compl. ¶23)

The Invention Explained

  • Problem Addressed: The patent addresses the inefficiency of assigning a static, fixed level of resources (e.g., CPU, memory) to a virtual server, which may not adapt to changing demands and can lead to either resource starvation or waste (RE44686 Patent, col. 2:5-28).
  • The Patented Solution: The invention describes a system to dynamically adjust a virtual server's resource allocation based on its needs. The system monitors "resource denials" to determine if a virtual server is overloaded. If the host physical server has capacity, the virtual server's resource allocation is increased. If the host is also overloaded, the system transfers the virtual server to a different physical host with sufficient resources (RE ’686 Patent, Abstract; Fig. 2A).
  • Technical Importance: This technology enables automated load balancing and resource optimization in virtualized data centers, which is critical for efficient hardware utilization and maintaining application performance (Compl. ¶¶62, 64).

Key Claims at a Glance

  • The complaint asserts independent claim 5 (Compl. ¶67).
  • Essential elements of independent claim 5 (a method claim) include:
    • receiving an indication that a first physical host is overloaded, where this indication is based on a determination that a virtual server is overloaded;
    • wherein the determination of virtual server overload is based on "resource unavailable messages resulting from denied requested to modify a resource allocation";
    • determining that a second physical host can accommodate the requested resource modification;
    • generating a transfer signal and transferring the virtual server from the first to the second physical host.
  • The complaint also asserts claims 6-7 (Compl. ¶66).

U.S. Patent No. RE 42,726 - "DYNAMICALLY MODIFYING THE RESOURCES OF A VIRTUAL SERVER"

  • Issued: September 20, 2011 (Compl. ¶25)
  • Technology Synopsis: This patent, related to the RE '686 patent, describes a system for dynamically adjusting computer resources allocated to a virtual server based on a "quality of service guarantee." The system includes a resource monitor to detect resource denials, a resource modifier, a load balancing module to identify host overload, and a server mover to transfer the virtual server to another physical host (Compl. ¶¶80, 82).
  • Asserted Claims: At least claims 1-13, including independent claim 1 (Compl. ¶¶84-85).
  • Accused Features: VMware's vSphere, vMotion, and Distributed Resource Scheduler (“DRS”) products are accused of infringing (Compl. ¶84).

U.S. Patent No. RE 43,051 - "ENABLING A SERVICE PROVIDER TO PROVIDE INTRANET SERVICES"

  • Issued: December 27, 2011 (Compl. ¶29)
  • Technology Synopsis: This patent relates to providing secure, multi-tenant virtual server services where different customers can use their own private, potentially overlapping, network address spaces. The technology uses "network tunnels" to isolate each customer's traffic and a lookup mechanism to route transmissions to the correct virtual server within a shared physical infrastructure (Compl. ¶¶32, 102).
  • Asserted Claims: At least claims 1 and 3-6, including independent claim 3 (Compl. ¶¶104-105).
  • Accused Features: VMware's NSX, NSX-T, and vCloud Director network virtualization products are accused of infringing (Compl. ¶104).

U.S. Patent No. RE 44,818 - "QUALITY OF SERVICE IN VIRTUAL COMPUTING ENVIRONMENTS"

  • Issued: March 25, 2014 (Compl. ¶33)
  • Technology Synopsis: This patent addresses quality of service (QoS) for input/output (I/O) operations in virtual environments. It describes a method of using a "hierarchical token bucket resource allocation" scheme to enforce bandwidth limitations on I/O packets, ensuring that packets are only transmitted across a network if a sufficient amount of allocated "tokens" is available (Compl. ¶¶123-124).
  • Asserted Claims: At least claims 1, 17, 30, 32-33, and 37-42, including independent claim 42 (Compl. ¶¶128-129).
  • Accused Features: VMware's vSphere, vSAN (virtual storage area network), and vDS (virtual distributed switch) functionalities are accused of infringing (Compl. ¶128).

III. The Accused Instrumentality

Product Identification

  • The complaint accuses a broad range of VMware's virtualization and cloud infrastructure products, including VMware Horizon, vSphere, ESX/ESXi, vMotion, Distributed Resource Scheduler (DRS), NSX, NSX-T, vCloud Director, and vSAN (Compl. ¶¶44, 66, 84, 104, 128).

Functionality and Market Context

  • The accused products form a comprehensive platform for creating and managing virtualized data centers.
    • Core Virtualization: vSphere and its ESXi hypervisor are the foundational components for creating and running virtual machines (VMs) on physical servers (Compl. ¶¶46-47).
    • Desktop Virtualization: Horizon provides users with remote access to virtual desktops and applications that are centrally managed and hosted on the vSphere platform (Compl. ¶46).
    • Resource Management: DRS and vMotion provide automated resource management, including monitoring server load and live-migrating VMs between physical hosts to balance workloads and avoid resource contention (Compl. ¶¶68-70). A screenshot in the complaint shows a vSphere interface displaying a cluster as "Imbalanced," illustrating the condition that may trigger DRS actions (Compl. p. 26).
    • Network and Storage Virtualization: NSX and vSAN provide software-defined networking and storage. NSX enables the creation of isolated virtual networks for multiple tenants using tunneling protocols like VXLAN (Compl. ¶106). vSAN provides shared virtual storage and, in conjunction with the Virtual Distributed Switch (vDS), uses Network I/O Control (NIOC) to allocate bandwidth based on a "shares" system, a form of QoS (Compl. ¶¶131, 133).

IV. Analysis of Infringement Allegations

'752 Patent Infringement Allegations

Claim Element (from Independent Claim 9) Alleged Infringing Functionality Complaint Citation Patent Citation
receiving data for creating a network-based agent A vSphere client is used to receive user input (data) to create a new Virtual Machine (the alleged agent) on a vSphere backend (the alleged agent server). ¶49 col. 22:15-19
invoking, in response to receiving a URL defining a type of event and identifying the network-based agent, an execution of the network-based agent... A launch URL is received by a server (e.g., View Connection Server), which identifies the VM and defines the event (instantiation), causing the VM to be instantiated and made available for remote access. ¶50 col. 18:29-39
...wherein the execution of the network-based agent comprises using a service and a service resource configured to be consumed by the network-based agent when the network-based agent performs the operation... An invoked VM (e.g., a virtual desktop) runs processes (services) that use allocated virtual CPU and virtual memory (service resources) from the physical host machine. The complaint includes a screenshot of a resource monitor showing CPU and memory usage by processes (Compl. p. 18). ¶51 col. 9:16-26
...and wherein an amount of the service resource is exhausted upon being consumed by the network-based agent... The virtual CPU and memory allocated to the VM are derived from finite physical host resources, which become occupied and unavailable for other processes while in use, thereby being "exhausted." ¶52 col. 25:57-67
...and communicating a result of the operation over a network communications link. The VM computes results (e.g., virtual desktop display updates) and communicates them over the network to a remote user interface, such as the VMware Horizon client. ¶53 col. 26:1-3

Identified Points of Contention ('752 Patent)

  • Scope Questions: A central question may be whether a "virtual machine" as implemented in VMware's modern platform constitutes a "network-based agent" as understood in the context of the patent's 1998 priority date. The defense may argue that an agent is a specific, task-oriented software process, not a complete, self-contained operating system environment.
  • Technical Questions: The analysis may turn on whether a user's action in a graphical interface (e.g., clicking an icon) to launch a virtual desktop technically constitutes the system "receiving a URL defining a type of event" as required by the claim language.

RE '686 Patent Infringement Allegations

Claim Element (from Independent Claim 5) Alleged Infringing Functionality Complaint Citation Patent Citation
receiving an indication that a first physical host is overloaded, wherein the indication is based on a determination that a virtual server is overloaded... The vSphere platform, through its DRS functionality, monitors the virtual infrastructure and can determine that a VM is overloaded, which contributes to the host being considered overloaded. ¶69 col. 5:35-43
...and wherein the determination that a virtual server is overloaded is based on one or more resource unavailable messages resulting from denied requested to modify a resource allocation The vSphere platform's monitoring allegedly includes tracking when VMs are denied resources, which serves as the basis for the overload determination. ¶69 col. 5:28-34
determining that a second physical host can accommodate the requested modified resource allocation The DRS functionality evaluates the resource usage of other physical hosts in the cluster to identify a suitable destination host that can satisfy the resource needs of the VM to be moved. ¶69 col. 6:3-11
...and generating a physical host transfer signal that indicates the second physical host and transferring the virtual server from the first physical host to the second physical host. DRS functionality generates a "migration recommendation" (the alleged transfer signal) and uses vMotion to transfer the live VM from the overloaded first host to the determined second host. The complaint includes a screenshot of a vSphere interface showing an "Imbalanced" cluster state (Compl. p. 26). ¶70 col. 6:40-45

Identified Points of Contention (RE '686 Patent)

  • Scope Questions: A key dispute may be whether the proactive, algorithm-driven load balancing of VMware's DRS, which seeks to maintain overall cluster "balance," meets the claim's specific requirement of an overload determination based on "resource unavailable messages resulting from denied requested to modify a resource allocation."
  • Technical Questions: The case may require detailed evidence on the internal workings of DRS to establish the precise trigger for a VM migration. The question will be whether the migration is a direct result of specific, discrete "denied requests" as claimed, or a more holistic assessment of resource distribution and performance metrics.

V. Key Claim Terms for Construction

Term: "network-based agent" (’752 Patent, Claim 9)

  • Context and Importance: This term's construction is fundamental to the infringement theory for the '752 patent. The dispute will likely center on whether a modern, full-featured virtual machine (VM) falls within the scope of this term, which was defined in the context of late-1990s technology.
  • Intrinsic Evidence for a Broader Interpretation: The specification provides a functional definition: an agent is a "software application, program, or process which autonomously, and possibly continuously, runs on behalf of its principal" ('752 Patent, col. 8:30-34). This could be argued to encompass a VM acting on behalf of a user.
  • Intrinsic Evidence for a Narrower Interpretation: The patent's examples describe agents performing discrete tasks like "answering telephone calls, taking voice mail messages, [and] setting up meetings" ('752 Patent, col. 8:58-62), which may suggest a more limited, task-specific software entity rather than a complete virtualized operating system.

Term: "resource unavailable messages resulting from denied requested to modify a resource allocation" (RE '686 Patent, Claim 5)

  • Context and Importance: This phrase defines the specific trigger for the patented method of resource modification and VM transfer. The infringement case against VMware's DRS hinges on whether its operation is based on this precise mechanism.
  • Intrinsic Evidence for a Broader Interpretation: The patent uses the general term "resource denials" and gives examples like a "memory allocation request denial" (RE '686 Patent, col. 5:31-32). Plaintiff may argue this covers any internal system state or signal within DRS that functionally represents resource contention leading to a migration.
  • Intrinsic Evidence for a Narrower Interpretation: The claim language is specific, requiring "messages" that result from "denied requested." This phrasing may support an interpretation requiring an explicit, failed request-response event, which Defendant could argue is different from the proactive, predictive algorithms used by DRS to prevent, rather than react to, such explicit failures.

VI. Other Allegations

Indirect Infringement

  • The complaint alleges both induced and contributory infringement for all five patents-in-suit. It claims VMware induces infringement by providing customers with products, user manuals, technical documentation, and marketing materials that instruct and encourage them to configure and use the products in an infringing manner (e.g., Compl. ¶¶58, 76, 93, 118, 141). Contributory infringement is alleged on the basis that the products have no substantial non-infringing uses or contain components especially made or adapted for infringement (e.g., Compl. ¶¶59, 77, 94, 119, 142).

Willful Infringement

  • The complaint alleges willful infringement for all asserted patents, claiming that VMware "knew of the... patent, or should have known of the... patent, but was willfully blind to its existence" (e.g., Compl. ¶¶57, 75). For most patents, knowledge is alleged from at least the date of service of the original complaint. For the RE '051 patent, the complaint alleges specific pre-suit knowledge since at least December 13, 2013, when Defendant’s own patent cited the RE '051 patent as prior art (Compl. ¶120).

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

  • A core issue will be one of definitional scope: can terms from patents with late-1990s and early-2000s priority dates, such as "network-based agent" and "URL," be construed to cover technologically distinct modern constructs like a "virtual machine" and the internal mechanics of a web-based management portal?
  • A key evidentiary question will be one of operational causation: for the resource management patents, does VMware's Distributed Resource Scheduler (DRS) migrate a virtual machine because it receives the specific "resource unavailable messages" or "denials" required by the claims, or is the migration driven by a different, more holistic load-balancing algorithm that does not map to the claimed infringement trigger?
  • A third central question will be one of architectural equivalence: do the software-defined networking and storage I/O control systems in VMware’s NSX and vSAN products implement the specific "tunneling lookup" logic and "hierarchical token bucket" mechanisms recited in the RE42726 and RE44818 patents, respectively, or are there fundamental architectural differences that place the accused products outside the claims' scope?