Microsoft Corp v. Daedalus Group LLC

1. Case Identification

• Case #: IPR2021-00830
• Patent #: 8,572,612
• Filed: May 7, 2021
• Petitioner(s): Microsoft Corporation
• Patent Owner(s): Daedalus Blue, LLC
• Challenged Claims: 1-15

2. Patent Overview

• Title: Autonomic Scaling of Virtual Machines in a Cloud Computing Environment
• Brief Description: The ’612 patent relates to methods and systems for automatically scaling virtual machines (VMs) in a cloud computing environment. The technology involves monitoring operating characteristics of a VM and deploying or terminating additional VM instances when predefined thresholds are crossed to manage data processing workloads.

3. Grounds for Unpatentability

Ground 1: Claims 1-15 are obvious over Keagy in view of Miller.

• Prior Art Relied Upon: Keagy (Patent 10,365,935) and Miller (Patent 8,296,434).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that the combination of Keagy and Miller teaches all limitations of the challenged claims. Keagy was asserted to disclose a cloud computing environment where VM resources (e.g., CPU, memory) are automatically scaled up or down based on predefined thresholds. Petitioner mapped Keagy’s teachings to claim limitations requiring a cloud operating system, a self-service portal for user configuration, and a deployment engine (Keagy’s Hypervisor Management Module or HMM). Miller was asserted to disclose a system that autonomically balances workloads by scaling entire VMs (termed “computing nodes”), including dynamically adding new VMs when demand increases and terminating VMs when demand decreases. Petitioner argued that the key limitation of “flagging the instance of a VM for autonomic scaling including termination” was taught by Keagy’s disclosure of specifying scaling thresholds for a VM’s resources during configuration, which effectively marks that VM for automated scaling actions, including resource removal that could lead to termination. Miller’s explicit teaching of terminating entire VMs was presented to supplement this disclosure.
  • Motivation to Combine: Petitioner asserted that a Person of Ordinary Skill in the Art (POSITA) would combine Keagy and Miller as they address the same problem of dynamic scaling in the same technical field of cloud computing. Petitioner argued that Miller’s approach of adding or removing entire VMs is a complementary and advantageous solution to Keagy’s resource-level scaling. A POSITA would have recognized that scaling a single resource within an existing VM, as in Keagy, would not efficiently alleviate bottlenecks caused by multiple, simultaneous burdens. Combining Miller’s teaching would allow the system to add entirely new VM instances to handle complex loads and to fully recover all resources from an underutilized VM by terminating it, thereby improving system efficiency and responsiveness—a highly desirable outcome.
  • Expectation of Success: Petitioner argued that a POSITA would have had a high expectation of success in this combination. The integration involved applying a conventional technique (adding and removing entire VMs, as taught by Miller) to an existing system architecture (disclosed in Keagy). Since Keagy already taught the termination and deletion of VMs in other contexts, a POSITA would have found it predictable and straightforward to implement Miller's autonomic scaling of entire VMs in response to monitored thresholds.

4. Key Claim Construction Positions

• "flagging the instance of a VM for autonomic scaling, including termination" (claims 1, 3, 6, 8, 11, 13)
  • Petitioner proposed this term should be construed to mean "adding a marker to the configuration information for a particular VM occurrence indicating whether that VM occurrence is to be autonomically scaled." This construction was central to Petitioner’s obviousness argument, allowing them to argue that Keagy’s system of specifying scaling thresholds for a VM’s resources during its initial setup inherently "flags" that VM for subsequent autonomic scaling actions. Petitioner asserted this flagging includes both up-scaling (adding resources/VMs) and down-scaling (removing resources), which would encompass termination, thereby overcoming the distinction the Patent Owner made during prosecution.

5. Arguments Regarding Discretionary Denial

• Petitioner argued that the Board should not exercise discretionary denial under 35 U.S.C. §314(a) based on the Fintiv factors. The core arguments were that the parallel district court case was in a very early stage, with no trial date set and minimal investment from the court or parties. Petitioner also emphasized that the IPR petition was filed diligently, just four and a half months after the complaint was served. Furthermore, Petitioner highlighted the difference in scope, as the IPR challenges all 15 claims while the litigation asserts only claim 1.
• Petitioner also contended that denial under 35 U.S.C. §325(d) was inappropriate because the primary prior art references, Keagy and Miller, were never presented to or considered by the Examiner during the original prosecution.

6. Relief Requested

• Petitioner requests institution of an inter partes review and cancellation of claims 1-15 of the ’612 patent as unpatentable.