`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`
`
`
`Civil Action No.
`
`
`
`JURY TRIAL DEMANDED
`
`CIRBA INC. (d/b/a DENSIFY)
`and CIRBA IP, INC.,
`
`
`Plaintiffs,
`
`Defendant.
`
`
`
`
`
` v.
`
`VMWARE, INC.,
`
`
`
`
`COMPLAINT
`
`Plaintiffs Cirba, Inc. (d/b/a Densify) and Cirba IP, Inc. (collectively, “Densify”) file this
`
`Complaint against Defendant VMware, Inc. (“VMware”), and respectfully allege as follows:
`
`NATURE OF THE ACTION
`
`1.
`
`Densify is a quintessential start-up success story. Through innovation and years of
`
`hard work, Densify has earned recognition for having set the standard in the industry for cloud and
`
`virtual infrastructure optimization. Global 5000 organizations use Densify’s software to reduce
`
`costs, operate with less infrastructure, and achieve better application performance.
`
`2.
`
`Densify is an industry leader. For the past decade, Densify has won praise as a
`
`“Best Cloud Management Solution of the Year,” “EMA Top 3,” “Leader in Cloud Cost
`
`Monitoring,” “Best of VMworld 2017 Gold Winner,” “Top 10 Cloud Solution Provider,” “Editors’
`
`Choice,” “Hot Product,” “Vendor to Watch,” “Companies to Watch,” “Top 10 Virtualization
`
`Vendors to Watch,” “Cool Vendor,” among other recognitions.
`
`3.
`
`For years, Densify’s products have led the industry in optimization, competing
`
`effectively based on its innovations and foundational patent protection. Its products have saved
`
`1
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`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 2 of 51 PageID #: 2
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`customers millions of dollars in hardware and software licensing costs, increasing efficiency and
`
`decreasing risk.
`
`4.
`
`Densify’s technology offerings were so compelling that VMware took Densify’s
`
`ideas and intellectual property, brazenly infringing the patents with products that worked the same
`
`way, looked strikingly similar, and even were advertised using the “Densify” trademarks.
`
`5.
`
`Rather than innovating on its own, VMware has systematically copied Densify’s
`
`technology. VMware has used Densify’s technology as a blueprint to close in on Densify’s lead
`
`as one of the best optimization solutions in the market. VMware’s infringement has gradually
`
`increased over time, copying more and more of the features of Densify’s product—the most
`
`significant to date being the recent releases of its flagship product, vROps, and its movement into
`
`the hybrid cloud space. With these recent developments, VMware is imminently threatening
`
`Densify’s virtual infrastructure optimization IP, and VMware recently has indicated it intends to
`
`leverage its infringing technology to move into Densify’s cloud infrastructure optimization
`
`business.
`
`6.
`
`Densify has no recourse but to file this action to stop VMware’s misuse of its
`
`intellectual property. Densify has invested years and millions of dollars to develop and
`
`commercialize products embodying its intellectual property. VMware is a multi-billion dollar
`
`global player that dominates the virtual infrastructure market; 99% of Fortune 1000 companies
`
`reportedly are VMware customers. If VMware’s unauthorized use of Densify’s intellectual
`
`property is not stopped, VMware can use its market power and dominant position to outspend
`
`Densify and swamp Densify’s marketing and sales of products embodying Densify’s patented
`
`technology. Densify cannot fairly compete against a behemoth like VMware unless its intellectual
`
`property is respected.
`
`2
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`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 3 of 51 PageID #: 3
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`7.
`
`Densify, which has not licensed its patents to competitors, has chosen to compete
`
`in the marketplace and is entitled to do so based on the exclusivity afforded by its patents. The
`
`disclosure of innovation in patents is not intended to facilitate unauthorized use, but rather to
`
`incentivize public disclosure for the benefit of all, in return for the promise to inventors of
`
`exclusive rights for a limited period of time. Meaningful consequences are needed to protect
`
`Densify’s exclusive rights.
`
`8.
`
`In the end, this case is about ensuring a level playing field so smaller competitors
`
`like Densify can compete fairly based on their hard work and protected innovations against larger
`
`companies like VMware.
`
`9.
`
`Accordingly, Densify brings this action under the patent laws, 35 U.S.C. § 1 et seq.,
`
`the Trademark Act of 1946 (the Lanham Act), 15 U.S.C. § 1051 et seq., Delaware law, and
`
`common law. Densify seeks to stop VMware’s infringement of its patents and other intellectual
`
`property so that it may compete on the strength of the breakthrough products it worked so hard to
`
`create.
`
`10.
`
`Cirba, Inc. (d/b/a Densify)
`
`is a Canadian privately-owned corporation
`
`headquartered in Markham, Ontario. Densify’s principal place of business is located at 400 – 179
`
`Enterprise Boulevard Markham, Ontario L6G 0E7 Canada. In addition to Markham, Densify has
`
`operations in New York, London, and Melbourne. Cirba, Inc. is the exclusive licensee of the
`
`patents asserted in this case.
`
`11.
`
`Cirba IP, Inc. is Canadian privately-owned corporation headquartered in Markham,
`
`Ontario. Cirba IP is located at 400 – 179 Enterprise Boulevard Markham, Ontario L6G 0E7
`
`Canada. Cirba IP, Inc. is a wholly-owned subsidiary of Cirba, Inc. Cirba IP, Inc. owns all right,
`
`3
`
`
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`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 4 of 51 PageID #: 4
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`title, and interest in and to the patents asserted in this case, and has exclusively licensed them to
`
`Cirba, Inc.
`
`12.
`
`VMware, Inc. is a publicly traded corporation organized and existing under the laws
`
`of the State of Delaware. VMware’s headquarters are located at 3401 Hillview Ave, Palo Alto,
`
`California. VMware also has offices in Colorado, Georgia, Massachusetts, Texas, Virginia, and
`
`Washington, among other offices located in twenty countries around the world.
`
`13.
`
`This is a civil action asserting claims of patent infringement of U.S. Patent Nos.
`
`8,209,687 (“the ’687 patent”) and 9,654,367 (“the ’367 patent”) (collectively, the “Asserted
`
`Patents”), unfair competition under the Lanham Act, 15 U.S.C. § 1125(a), deceptive trade practices
`
`under Delaware Code Title 6 § 2532, and common law trademark infringement.
`
`14.
`
`This Court has subject matter jurisdiction over this case under 28 U.S.C. §§ 1331
`
`and 1338, 15 U.S.C. § 1121, and 28 U.S.C. § 1367(a).
`
`15.
`
`Venue is proper in this Court under 28 U.S.C. §§ 1391 and 1400(b). VMware has
`
`offered and sold and continues to offer and sell its infringing products and services in this district.
`
`On information and belief, VMware sells and offers to sell the infringing products and services to
`
`developers, partners, or customers in this district, such as the University of Delaware, ADP,
`
`Alliant, Rent-a-Center, Cardinal Health, and the Make-A-Wish Foundation of America. VMware
`
`has committed acts of patent infringement in this district, is incorporated in this district, and does
`
`business in this district.
`
`16.
`
`This Court has personal jurisdiction over VMware. VMware is incorporated in
`
`Delaware and has purposely availed itself of the privileges and benefits of the laws of the State of
`
`Delaware. VMware has continuous and systematic business contacts with the State of Delaware.
`
`VMware, directly and/or through subsidiaries or intermediaries, conducts its business extensively
`
`4
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`
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`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 5 of 51 PageID #: 5
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`throughout Delaware, by shipping, distributing, offering for sale, selling, and advertising its
`
`products and services in the State of Delaware and in this district. VMware, directly and/or through
`
`subsidiaries or intermediaries, has purposefully and voluntarily placed its infringing products and
`
`services into this district and into the stream of commerce with the intention and expectation that
`
`they will be purchased and used by consumers in this district.
`
`
`
`17.
`
`Densify was founded in 1999. It is a software company that provides machine
`
`learning analytics products related to on-premise information technology (“IT”) infrastructure and
`
`the public cloud. It is a company built on innovation of products that save its customers millions
`
`of dollars in software licensing and computing infrastructure costs by making their utilization of
`
`servers more efficient. Densify has grown to over 180 employees and counts among its customers
`
`many of the world’s most prominent and sophisticated companies. Densify has been recognized
`
`for its innovations; it has won numerous industry awards and has been granted patents on its
`
`technology by the U.S. Patent and Trademark Office (“PTO”). These accomplishments have
`
`attracted significant investment in Densify, which is used to innovate new products that make its
`
`customers’ businesses run more efficiently, reliably, and profitably.
`
`18. Many companies deploy their own IT infrastructure, including computing, storage
`
`and networking equipment, on premises. Generally, computing environments are designed to run
`
`at least one workload that performs business functions and consumes compute resources, e.g.,
`
`resources related to central processing units (“CPUs”), memory, disk, network, and other
`
`hardware. The workloads run on computing systems such as servers that supply the computing
`
`resources. Each computing system has a finite capacity of resources.
`
`5
`
`
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`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 6 of 51 PageID #: 6
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`19.
`
`Depending on the size of the company, the amount of equipment and, importantly,
`
`the number of physical servers that companies deploy can be substantial, which is necessary in
`
`order to keep pace with today’s high processing demands. There are inefficiencies associated with
`
`these large infrastructure environments, requiring IT organizations to manage large numbers of
`
`physical servers, each operating only at a fraction of their capacity.
`
`20.
`
`Enter virtualization. In computing, “virtualization” refers to the act of creating a
`
`“virtual” version of something. Virtualization relies on software to simulate hardware
`
`functionality and create a virtual computer system, which allows companies to run more than one
`
`virtual computer system, or virtual machine (“VM”), on a single physical server. In other words,
`
`virtualization offers greater efficiency and economies of scale.
`
`21.
`
`In computing, a virtual machine or VM is essentially an emulation of a computer
`
`system. It functions as and represents a real computer machine but does so only logically as
`
`defined by software (virtualization software is referred to as a “hypervisor”). VMs originated from
`
`the desire to run multiple operating systems on the same piece of hardware and get the benefit of
`
`sharing computing resources. VMs are used to run software applications, and with virtualization,
`
`one physical server can run many applications as each application runs in a VM sharing the
`
`resources of the physical machine. Different application needs on the same physical hardware can
`
`create conflicts in complex systems—each piece of software competing for limited processing and
`
`storage capabilities of a physical server. Simplified, VMs allow time and capacity sharing among
`
`competing applications and their operating systems. If one physical machine can host multiple
`
`VMs, the utilization of its resource capacity becomes more efficient, and requires fewer physical
`
`resources, and software licenses, and hence costs less.
`
`6
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`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 7 of 51 PageID #: 7
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`22.
`
`In virtualized environments, the physical server and related software often are
`
`called a “host.” VMs running on a host often are called “guests.” Virtualization is accomplished
`
`through software that makes logical computing environments independent of physical
`
`infrastructure. In this context, virtualization refers to dividing up resources of a host into multiple
`
`VMs (i.e., multiple virtual servers). With virtualization, one host can run many applications
`
`because each run on a VM sharing resources of the host.
`
`23.
`
`Virtualization also allows for multiple hosts to be configured as one larger logical
`
`entity; the resulting group of hosts can be referred to as a “cluster.” A cluster offers an advantage
`
`of managing several hosts as one larger resource pool. Each host can be interchangeable in the
`
`pool, which enables VMs to move between them. The moves could happen, for example, if a host
`
`becomes too busy and another has more available resources.
`
`24.
`
`Decisions must be made regarding which VMs to run on which hosts. Running too
`
`few VMs or applications on a host means that more servers or capacity must be purchased.
`
`Running too many VMs or applications can create risk by over-utilizing hardware, i.e., it creates
`
`resource contention where VMs compete for the same resources. The inefficiencies and risks can
`
`be reduced by optimizing workload placements and making sure the amount of resources assigned
`
`to each VM is commensurate with host constraints.
`
`25.
`
`Even with promise of greater efficiency and scale, companies were not able to
`
`optimize a complex virtualized infrastructure on a day-to-day basis. For example, in virtualized
`
`environments, determining optimal placements of VMs in short times, while honoring complex
`
`operating constraints, was not practical.
`
`7
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`
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`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 8 of 51 PageID #: 8
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`26.
`
`Densify’s technology addresses these needs. With Densify’s analytics, managing
`
`virtualized infrastructures to an optimal state can be done with automation. In fact, intelligent
`
`automation has become critical as environments scale and become more complex.
`
`27.
`
`Densify enables automated infrastructure optimization for virtualized environments
`
`through its proprietary software. Densify offers products that optimize virtual environments and
`
`are referred to herein as “Densify’s Optimization Engine.” Densify’s Optimization Engine is
`
`predictive analytics software that optimizes public cloud, bare metal cloud, and on-premise
`
`virtualized environments, enabling customers to operate with less cloud cost, less infrastructure
`
`and better performing applications.
`
`28.
`
`Densify’s Optimization Engine decreases risk in a VM infrastructure. Its predictive
`
`analytics anticipate capacity risk, place workloads, and allocate resources to avoid capacity
`
`shortfalls, meet compliance and other key operating policies, which results in reducing
`
`unnecessary movement of VMs and avoiding application performance issues. The figure below is
`
`an example of how Densify’s Optimization Engine displays risks in a customer’s environment
`
`across clusters, hosts, and guests.1 The display shows, for example, how: (1) specific placement
`
`and allocation recommendations can address risks; (2) the customer can automate and execute
`
`those recommendations; and (3) to track the progress over time.
`
`
`1
`Screenshot from Densify Video, Cloud Optimization Done For You, available at
`https://www.densify.com/resources/video-optimize-on-premises-virtual-infrastructure-bare-
`metal-cloud (Ex. 1). A full version of the video from which the screenshot (Ex. 1) was taken has
`been provided as Ex. 31.
`
`8
`
`
`
`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 9 of 51 PageID #: 9
`
`
`The Densify Optimization Engine reduces infrastructure costs. Its intelligent
`
`
`
`29.
`
`workload stacking and resource allocation increases optimization by identifying savings of an
`
`average of 33% on hardware and 55% on software licensing. The picture below illustrates, by way
`
`of analogy, the effect of inefficient stacking, creating operational risk and stranded capacity, and
`
`then how Densify’s Optimization Engine organizes the workload to reduce risks and
`
`inefficiencies.2
`
`
`2
`Screenshot from Densify Video, Cloud Optimization Done For You, available at
`https://www.densify.com/resources/video-optimize-on-premises-virtual-infrastructure-bare-
`metal-cloud (Ex. 2). A full version of the video from which the screenshot (Ex. 2) was taken has
`been provided as Ex. 31.
`
`9
`
`
`
`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 10 of 51 PageID #: 10
`
`
`Densify’s Optimization Engine automates workload placement and resource
`
`30.
`
`optimization. The figure below illustrates how Densify’s Optimization Engine provides customer
`
`control over making stranded capacity available, how to increase the density of VMs, and how to
`
`minimize software costs.3
`
`
`3
`Screenshot from Densify Video, Cloud Optimization Done For You, available at
`https://www.densify.com/resources/video-optimize-on-premises-virtual-infrastructure-bare-
`metal-cloud (Ex. 3). A full version of the video from which the screenshot (Ex. 3) was taken has
`been provided as Ex. 31.
`
`10
`
`
`
`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 11 of 51 PageID #: 11
`
`
`
`31.
`
`Through its innovative product offerings, Densify has attracted a substantial
`
`
`
`customer following among the Fortune 5000. Customers pay millions of dollars for Densify’s
`
`Optimization Engine, which in turn save those companies many more millions of dollars. Densify
`
`has invested heavily in research and development to create innovative, award winning products
`
`that have been in high demand from some of the world’s leading companies.
`
`
`
`32.
`
`VMware is a company focused on platform virtualization and cloud computing
`
`software and services. Founded in 1998, it entered the server market in 2001. It began as a leader
`
`in virtualization software and has expanded its offerings over the years. It is known for its
`
`innovation of the hypervisor—the layer of software residing between the operating system and the
`
`system hardware that enables virtualization.
`
`33.
`
`VMware’s early success was grounded in its innovations relating to server
`
`virtualization. But, as analysts have recognized, it has been hesitant to embrace new technologies:
`
`11
`
`
`
`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 12 of 51 PageID #: 12
`
`“The history of VMware presents a company that disrupted the IT industry with server
`
`virtualization, but that was hesitant to embrace new technologies, such as the public cloud.
`
`VMware’s future success will depend on how it finds a role in the current cloud market and how
`
`it approaches containers.”4
`
`34.
`
`“The concept of virtualization has moved from the server to other areas in the data
`
`center infrastructure. The history of VMware shows a company trying to keep up with its original
`
`innovation.”5 Over time, VMware has been successful in raising money, with which it acquired
`
`companies with innovative technology and developed products using the technology of others.
`
`35.
`
`In 2008, “after a disappointing financial performance due to mismanagement of the
`
`company’s growing scale, the board of directors replaced VMware president and CEO Diane
`
`Greene with Paul Maritz, a former Microsoft veteran who headed EMC’s cloud computing
`
`business unit. This leadership reorganization marked a point in the history of VMware that
`
`foreshadowed a shift in the company's direction.”6
`
`36.
`
`Thereafter, VMware began rapidly acquiring innovations from other companies,
`
`and, at least in the case of Densify, copying a competitor’s technology. The history shows
`
`VMware has been taking an increasingly aggressive approach in maintaining its market power as
`
`the market shifts and new innovators spring up.
`
`37.
`
`Today, VMware faces challenges in adapting its business to the public cloud as
`
`companies shift away from on premise to cloud-based infrastructures. “VMware Cloud on AWS
`
`isn’t as attractive for organizations developing new applications. VMware maintains its position
`
`
`4
`Korzeniowski, P., “What The History Of VMware Reveals About Its Future Projects,”
`available at https://searchvmware.techtarget.com/tip/What-the-history-of-VMware-reveals-about-
`its-future-projects (Ex. 4).
`5
`Id. (Korzeniowski, Ex. 4).
`6
`Id. (Korzeniowski, Ex. 4).
`
`12
`
`
`
`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 13 of 51 PageID #: 13
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`with data center technicians, but it’s not growing with business unit developers who increasingly
`
`control significant portions of IT spending. . . . VMware’s virtualization software reshaped the
`
`computer industry. Cloud and containers are now having a similar effect. VMware’s response to
`
`these trends will determine its impact in the coming years.”7
`
`38.
`
`This case centers on VMware’s products and services related to its virtualization
`
`platform, including but not limited to, vRealize Operations (“vROps”), Distributed Resource
`
`Scheduler (“DRS”), and other related products and services, including VMware’s suite of software
`
`products and services that include vROps or DRS (collectively, the “VMware Accused Products”).
`
`39.
`
`According to VMware, vROps is an enterprise software product that “can
`
`proactively identify and solve emerging issues with predictive analysis and smart alerts, ensuring
`
`optimal performance and availability of system resources - across physical, virtual, and cloud
`
`infrastructures.”8 VMware states that vROps provides “complete monitoring capability in one
`
`place, across applications, storage, and network devices, with an open and extensible platform
`
`supported by third-party management packs.”9 In addition, according to VMware, vROps
`
`“increases efficiency by streamlining key processes with preinstalled and customizable policies
`
`while retaining full control.”10 Using data collected from system resources (objects), vROps
`
`“identifies issues in any monitored system component, often before the customer notices a
`
`problem.”11
`
`
`7
`Supra n. 4 (Korzeniowski, Ex. 4).
`8
`vRealize Operations Manager 7.0 Help Guide at 5 (Nov. 15, 2018), available at
`https://docs.vmware.com/en/vRealize-Operations-Manager/7.0/vrealize-operations-manager-70-
`help.pdf (Ex. 5).
`Id. (vRealize Operations Manager 7.0 Help Guide, Ex. 5).
`9
`Id. (vRealize Operations Manager 7.0 Help Guide, Ex. 5).
`10
`Id. (vRealize Operations Manager 7.0 Help Guide, Ex. 5).
`11
`
`
`
`13
`
`
`
`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 14 of 51 PageID #: 14
`
`40.
`
`VMware’s core hypervisor is referred to as ESXi. VMware’s DRS is a tool for
`
`managing VM workloads and “works on a cluster of ESXi hosts and provides resource
`
`management capabilities like load balancing and virtual machine (VM) placement. DRS also
`
`enforces user-defined resource allocation policies at the cluster level, while working with system-
`
`level constraints.”12 VMware states that DRS ensures that “VMs and their applications are always
`
`getting the compute resources that they need to run efficiently.”13
`
`
`
`41.
`
`Densify’s business historically has focused on technology that can optimize the
`
`placement of virtual machines on hosts while under the multiple operational constraints. It works
`
`with virtualization platforms offered by, among others, VMware. Densify’s Optimization Engine
`
`historically has complemented VMware’s products, but as VMware learned Densify’s technology,
`
`it slowly over the years has become Densify’s competitor in virtual infrastructure optimization.
`
`42.
`
`IT organizations of major companies typically utilize virtual environments, and
`
`most of these companies use VMware’s virtualization platform (i.e., hypervisor and related
`
`software).
`
`43.
`
`Densify integrates with VMware’s virtualization platform, including working with
`
`VMware management products like DRS and vROps.
`
`44.
`
`Because VMware offers the baseline virtualization platform with approximately
`
`99% of Fortune 1000 companies as customers, it is naturally the dominant “incumbent” with direct
`
`access to customers. VMware uses its incumbent position and market dominance to consolidate
`
`
`12
`Understanding vSphere DRS Performance, VMware vSphere 6 at 4, available at,
`https://www.vmware.com/content/dam/digitalmarketing/vmware/en/pdf/techpaper/vsphere6-drs-
`perf.pdf (Ex. 6).
`13
`Id. (Understanding vSphere DRS Performance, Ex. 6).
`
`14
`
`
`
`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 15 of 51 PageID #: 15
`
`its power, particularly when it comes to competitors. For example, on information and belief,
`
`VMware controls access to the industry’s leading tradeshow (called “VMworld”), including
`
`speaker and analyst invitations. By doing so, VMware is capable of controlling the agenda for
`
`what is known to be a must-attend virtualization tradeshow.
`
`
`
`45.
`
`VMware has long been familiar with Densify’s product, technology and inventions.
`
`VMware embarked on a strategy to introduce products with Densify’s technology and intellectual
`
`property.
`
`46.
`
`As an example, VMware previewed its release of vROps 6.1 at the VMworld 2015
`
`trade show. vROps 6.1 was shown with the following dashboard:14
`
`
`
`
`
`
`14
`Screenshot from VMware Videos, How to Troubleshoot Using vRealize Operations
`Manager (Deep Live Demo) (MGT4928-1) and How to Troubleshoot Using vRealize Operations
`Manager
`(Deep
`Live
`Demo)
`(MGT4928-2),
`available
`at
`https://videos.vmworld.com/global/2015?q=MGT4928 (Ex. 7). Full versions of the videos from
`which the screenshot (Ex. 7) was taken have been provided as Exs. 32 – 33.
`
`15
`
`
`
`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 16 of 51 PageID #: 16
`
`47.
`
`vROps’ dashboard looked the same in relevant respects as Densify’s product that
`
`was in the market since 2012, shown below.15 In fact, an audience member spoke up during the
`
`VMworld conference presentation to note how similar vROps dashboard was.
`
`Screenshot of Densify’s Product
`
`As seen above, Densify’s product and VMware’s vROps 6.1’s dashboard share
`
`
`
`48.
`
`substantially the same key features (e.g., “too little infrastructure” is analogous to “overutilized”).
`
`The similarity of VMware’s dashboard to Densify’s was so striking that Densify received a call
`
`from a customer who mistakenly assumed VMware must have acquired Densify.
`
`49.
`
`Upon information and belief, the dashboard in paragraph 47 remains a vROps
`
`feature.
`
`50.
`
`VMware also released “predictive DRS” that was in material respects the same as
`
`a core Densify feature that VMware knew about and copied.
`
`
`15
`Screenshot of Densify’s Product (Ex. 8).
`
`16
`
`
`
`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 17 of 51 PageID #: 17
`
`51.
`
`These releases were troublesome and infringing, but still VMware was not able to
`
`offer a product, like Densify’s, that satisfied the needs of customers with complex business and
`
`operating constraints.
`
`52.
`
`Then, in late September 2018, VMware released vROps version 7.0. vROps 7.0
`
`added the “Automated Host Based Placement” feature, which allows vROps to “teach DRS your
`
`business intent and control not only balancing across clusters, but also which host within a cluster
`
`the workload will land on.”16 The particular use case for this feature is software license control17—
`
`a key Densify product feature known to VMware.
`
`53.
`
`Upon information and belief, prior to the vROps 7.0 release, vROps did not have a
`
`host-based software license control feature. With the “Automated Host Based Placement” feature,
`
`however, VMware, for the first time, provides a commercially viable host-based software license
`
`control feature that allows a customer to “automatically drive” its “business intent” from a single
`
`and automated user interface enabling the type of software license control feature Densify
`
`described as important to its customers. VMware has not stopped there. In a recent announcement,
`
`VMware has emphasized that it is further enhancing the vROps host-based placement software
`
`license control features in a brand new vROps 7.5 release.
`
`54.
`
`Not only did VMware copy Densify’s technology, it even began using its name and
`
`trademark DENSIFY (or formatives thereof) in reference to VMware’s products. For example, it
`
`
`16
`Gandhi, T., What’s New in vRealize Operations 7.0, VMware Blogs, available at
`https://blogs.vmware.com/management/2018/08/whats-new-in-vrealize-operations-7-0.html (Ex.
`9).
`Dias, J., Using Host Rules with Business Intent in vRealize Operations 7.0, VMware Blogs,
`17
`available
`at https://blogs.vmware.com/management/2018/11/using-host-rules-with-business-
`intent-in-vrealize-operations-7-0.html (Ex. 10).
`
`17
`
`
`
`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 18 of 51 PageID #: 18
`
`began identifying its key feature as “Workload Optimization – Densifying to Repurpose Hosts.”
`
`An example is below:18
`
`
`
`55.
`
`VMware implemented features in VMware products that infringed Densify’s
`
`
`
`patents.
`
`1.
`
`The ’687 Patent
`
`56.
`
`On June 26, 2012, the U.S. Patent and Trademark Office duly and legally issued
`
`the ’687 patent, entitled “Method and System for Evaluating Virtualized Environments,” with Tom
`
`Silangan Yuyitung and Andrew Derek Hillier as inventors. The earliest application related to the
`
`’687 patent was filed on August 31, 2007. A true and correct copy of the ’687 patent is attached
`
`as Exhibit 12.
`
`
`18
`Screenshot from Workload Optimization - Densifying to Repurpose Hosts, VMware Cloud
`Management, available at https://www.youtube.com/watch?v=IymKQdg3oNE (Ex. 11). A full
`version of the video from which the screenshot (Ex. 11) was taken has been provided as Ex. 34.
`
`18
`
`
`
`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 19 of 51 PageID #: 19
`
`57.
`
`The ’687 patent is directed to technological solutions that addresses problems
`
`specifically grounded in enterprise IT environments. For example, the ’687 patent explains that
`
`“IT infrastructures used by many organizations have moved away from reliance on centralized
`
`computing power and towards more robust and efficient distributed systems. While the benefits
`
`of a distributed approach are numerous and well understood, there has arisen significant practical
`
`challenges in managing such systems for optimizing efficiency and to avoid redundancies and/or
`
`under-utilized hardware. In particular, one challenge occurs due to the sprawl that can occur over
`
`time as applications and servers proliferate. Decentralized control and decision making around
`
`capacity, the provisioning of new applications and hardware, and the perception that the cost of
`
`adding server hardware is generally inexpensive, have created environments with far more
`
`processing capacity than is required by the organization.”19
`
`58.
`
`The ’687 patent also states that “[w]hen cost is considered on a server-by-server
`
`basis, the additional cost of having underutilized servers is often not deemed to be troubling.
`
`However, when multiple servers in a large computing environment are underutilized, having too
`
`many servers can become a burden. Moreover, the additional hardware requires separate
`
`maintenance considerations; separate upgrades and requires the incidental attention that should
`
`instead be optimized to be more cost effective for the organization. Heat production and power
`
`consumption can also be a concern. Even considering only the cost of having redundant licenses,
`
`removing even a modest number of servers from a large computing environment can save a
`
`significant amount of cost on a yearly basis.”20
`
`
`’687 patent, 1:26-41.
`19
`’687 patent, 1:42-54.
`20
`
`19
`
`
`
`Case 1:19-cv-00742-LPS Document 1 Filed 04/25/19 Page 20 of 51 PageID #: 20
`
`59.
`
`The emergence of virtual infrastructure provided a technology foundation to
`
`achieve consolidation, and according to the ’687 patent, “organizations have become increasingly
`
`concerned with such redundancies and how they can best achieve consolidation of capacity to
`
`reduce operating costs