Case 2:21-cv-01653 Document 1 Filed 12/10/21 Page 1 of 46
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
`
`DRUT TECHNOLOGIES, INC.,
`
`Plaintiff,
`
`v.
`
`MICROSOFT CORPORATION, INC.,
`
`Defendant.
`
` NO.
`COMPLAINT
`DEMAND FOR JURY TRIAL
`
`Plaintiff Drut Technologies, Inc. (“Drut”), by and through its attorneys of record,
`Williams Kastner & Gibbs, PLLC, and Shlansky Law Group, LLP (pro hac vice admission
`forthcoming), hereby states and alleges as follows:
`I.
`BACKGROUND
`This action concerns Microsoft Corporation’s (“Microsoft”) surreptitious
`1.
`misappropriation of Drut’s valuable and novel software and hardware, which it misled Drut and
`convinced Drut to provide to Microsoft, that was ultimately used to conceive (and build), upon
`information and belief, Microsoft’s newest cloud-based server architecture using such
`information that it accessed from Drut.
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`COMPLAINT - 1
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` 7508829.1
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`Williams, Kastner & Gibbs PLLC
`601 Union Street, Suite 4100
`Seattle, WA 98101-2380
`(206) 628-6600
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`Case 2:21-cv-01653 Document 1 Filed 12/10/21 Page 2 of 46
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`Drut was founded in 2018 by Jitender K. Miglani, Founder and President, who
`2.
`conceived proprietary, innovative technologies to improve efficiency in cloud-based data
`centers.
`Drut’s innovation – a set of computer algorithms and a configuration of software
`3.
`and hardware components – was designed to reduce inefficiencies in cloud-based servers. A
`cloud-based server is one that may involve a virtual server, which is built, hosted, and delivered
`via a cloud computing infrastructure over the internet, and is accessed remotely.
`4.
`Cloud-based servers are often inefficient due to unused cloud resources. A cloud
`resource refers to a computer’s capabilities such as networks, storage, accelerators, or other
`elements. Cloud resources become unused if a specific workload does not require them (i.e., the
`bandwidth of a workload does not use all resources). For example, if a user needs storage, but
`does not use accelerators, the accelerator resources are unused.
`5.
`Drut’s technology allows for reconfiguration of cloud architectures to provide for
`disaggregation of cloud-based resources so that data centers can be efficient in their use of cloud-
`based resources (i.e., avoid unused resources). For example, Drut’s technology allows for
`servers to be built so that only the resources needed by a user at a particular time or for a
`particular task are drawn upon, and the servers can be reconfigured, thus reducing unused
`resources.
`Drut’s technology is a key to allowing interconnection between computers to
`6.
`achieve the efficient utilization of cloud-based resources.
`7.
`While a disaggregated server configuration (that can adapt to user workloads) is
`not in itself a novel concept, the way it is implemented in a reconfigurable manner by Drut is
`novel. Drut, upon information and belief, is the first company that was able to build such a
`connection between two field-programmable gate array (“FPGA”) cards connected remotely.
`An FPGA exists on a circuit board that allows for re-programming after manufacturing. FPGAs
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`COMPLAINT - 2
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` 7508829.1
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`Williams, Kastner & Gibbs PLLC
`601 Union Street, Suite 4100
`Seattle, WA 98101-2380
`(206) 628-6600
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`

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`Case 2:21-cv-01653 Document 1 Filed 12/10/21 Page 3 of 46
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`are designed with logic structures, known as gates, including programmable elements and
`interconnects, establishing pathways for data to perform multiple or complex functions. Drut’s
`algorithms allows for reconfiguration of the interconnects across an optical link.
`8.
`Microsoft, which hosts a cloud computing service called Microsoft Azure
`(“Azure”), recognized the importance and benefit of Drut’s technology and engaged Drut to
`work on a project (“The Project”).
`9.
`The Project involved the parties’ execution of a Master Supplier Services
`Agreement, dated November 20, 2019 (the “MSSA”), which was subsequently informed by a
`Statement of Work, dated December 4, 2019 (the “SOW”).
`10.
`The goal of The Project was to provide for disaggregation of cloud-based
`resources by pooling them to be available as necessary, and to reduce waste and redundancy in
`existing architectures.
`11.
`If The Project was successful, it would reduce the need for certain resources, such
`as servers and energy usage, and enhance speed and user experience.
`12.
`For a large-scale cloud provider like Azure, this would reduce capital expenditure,
`potentially by billions of dollars, and provide Microsoft with a competitive advantage over other
`cloud service providers.
`13. Microsoft’s cloud business appears to be responsible for the largest portion of its
`revenue, according to its recent earnings reports, and its competitive advantages, which apply to
`processing conducted in proprietary centers, and are the basis for a large portion of its revenue
`and earnings growth.
`14.
`In fact, based on information and belief derived from Microsoft’s own modeling,
`the market opportunity for The Project ranged from $100 million to billions of dollars in annual
`value in terms of smaller numbers of servers, smaller physical facilities, less electricity to operate
`the units, less electricity to cool the facilities, etc.
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`COMPLAINT - 3
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` 7508829.1
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`Williams, Kastner & Gibbs PLLC
`601 Union Street, Suite 4100
`Seattle, WA 98101-2380
`(206) 628-6600
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`

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`Case 2:21-cv-01653 Document 1 Filed 12/10/21 Page 4 of 46
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`Beginning in 2019, Microsoft sought to engage Drut to refine Drut’s hardware
`15.
`and software to apply to Azure’s network of servers.
`16. Microsoft and Drut developed economic modeling for servers to be constructed
`by Drut for Microsoft that reflected hundreds of millions of dollars of licensing revenue to Drut,
`if Drut were to license its technology to Microsoft. Neither of the people negotiating or forming
`the business dealing between the parties actually believed or understood that Drut had licensed
`any technology to Microsoft, except the limited items arising from the paid work.
`17.
`Instead, Microsoft deliberately misappropriated Drut’s valuable and novel
`software and hardware, and ultimately, upon information and belief, built its newest cloud-based
`server architecture using the information that it learned from Drut, including hardware (and field
`programmable gate array/register-transfer level) that Microsoft solicited from Drut.
`18.
`Specifically, Microsoft engaged in a pattern of frustrating Drut’s ability to
`perform under the MSSA and SOW by requiring changes, constricting time and monetary
`resources, and refusing to compensate Drut for the work it had done, all while mining Drut’s
`confidential information and while stringing Drut along to develop, in parallel, a cloud-based
`server based on the information Microsoft had accessed from Drut, and Microsoft’s use of Drut’s
`technology during The Project.
`19.
`In fact, during April 2020, Microsoft was actively touting the extraordinary
`results that Drut had achieved. Microsoft also published a video in which the Azure’s Chief
`Technology Officer enthusiastically championed what Drut’s work could do, except that he
`claimed it to be Microsoft’s. This video featured the actual device that Drut physically shipped
`to Microsoft in April 2020, with its novel hardware and software enclosed, to demonstrate its
`technology to Microsoft. Whether unwittingly or knowingly, this enthusiastic endorsement was
`for exactly the product that Drut had provided, that the technical and program staff at Microsoft
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`COMPLAINT - 4
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` 7508829.1
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`Williams, Kastner & Gibbs PLLC
`601 Union Street, Suite 4100
`Seattle, WA 98101-2380
`(206) 628-6600
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`Case 2:21-cv-01653 Document 1 Filed 12/10/21 Page 5 of 46
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`had previously induced Drut to work on with Microsoft, on the expectation of Microsoft
`licensing the technology and buying its servers from Drut.
`20.
`Despite using Drut’s intellectual property and work enclosed in the device,
`Microsoft was actively representing to Drut, including in writing, that it was not using Drut’s
`work or prior-developed technology. Now, Microsoft also claims that that technology was
`irrevocably licensed to Microsoft in any event based on a supposed license that even Microsoft’s
`own program staff never believed when they were developing economic models for Drut to be
`paid hundreds of millions of dollars for (before, during, and after contract and expectation
`formation).
`Upon information and belief, Microsoft’s misappropriation of Drut’s trade secrets
`21.
`and contrived theory that it obtained an irrevocable license as part of a sleight of hand in its
`documents (that its own team never imagined) is part of a pattern of Microsoft seeking to obtain
`broad intellectual property rights for nominal payments.
`22.
`Drut brings this lawsuit to prevent Microsoft from continuing to misappropriate
`Drut’s novel confidential information, which constitutes trade secrets, and to prevent Microsoft
`from wrongfully using Drut’s confidential information to develop and enhance its cloud-based
`servers.
`Drut also brings this lawsuit to recover for Microsoft’s failure to perform its duties
`23.
`under the parties’ MSSA and SOW, and for Microsoft’s misuse of an amendment to the MSSA
`and SOW to refuse to pay Drut for the work it completed.
`24. Microsoft’s continuing disregard for Drut’s intellectual property and contractual
`rights constitutes misappropriation of trade secrets, breach of contract, breach of the implied
`covenant of good faith and fair dealing, and unfair competition, and otherwise entitles Drut to
`relief in quantum meruit or unjust enrichment.
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`COMPLAINT - 5
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` 7508829.1
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`Williams, Kastner & Gibbs PLLC
`601 Union Street, Suite 4100
`Seattle, WA 98101-2380
`(206) 628-6600
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`

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`Case 2:21-cv-01653 Document 1 Filed 12/10/21 Page 6 of 46
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`JURISDICTION AND VENUE
`II.
`The Court has jurisdiction over Microsoft pursuant to 28 U.S.C. § 1332(a),
`25.
`because the matter in controversy exceeds $75,000.00, exclusive of interest and costs, and
`because Drut and Microsoft are citizens of different states. See Section III ¶¶ 28, 29, infra.
`26.
`In addition, this is an action for trade secret misappropriation under state trade
`secrets law and the Defend Trade Secrets Act of 2016 (18 U.S.C. § 1836 et seq.), declaratory
`judgment pursuant to the Declaratory Judgment Act (28 U.S.C. § 2201), as well as state and
`common law claims for breach of contract, breach of the implied covenant of good faith and fair
`dealing, unfair competition, quantum meruit, and unjust enrichment. This Court has jurisdiction
`pursuant to 28 U.S.C. §§ 1331 and 1367(a).
`27.
`Venue in this case is proper in this District and before this Court pursuant to 28
`U.S.C. §§ 1391(b), (c), and 1400(b), because Microsoft resides and conducts business in the
`Western District of Washington.
`
`PARTIES
`III.
`Drut is incorporated in Delaware and its principal place of business is in New
`28.
`Hampshire. Thus, Drut is “a citizen of” either Delaware or New Hampshire. Accord 28 U.S.C.
`§ 1332(c)(1).
`29. Microsoft is incorporated in Washington state and its principal place of business
`is in Redmond, Washington. Thus, Microsoft is “a citizen of” Washington.
`30.
`The Parties are diverse under 28 U.S.C. § 1332(a)(1).
`IV.
`FACTUAL ALLEGATIONS
`Industry Background and Drut’s Technology.
`31.
`Today’s computer servers are often cloud-based, as described above, meaning
`that they can be accessed remotely over the internet.
`
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`Williams, Kastner & Gibbs PLLC
`601 Union Street, Suite 4100
`Seattle, WA 98101-2380
`(206) 628-6600
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`

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`Case 2:21-cv-01653 Document 1 Filed 12/10/21 Page 7 of 46
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`In such cloud-based servers, the components that store data, process graphics, or
`32.
`other information on a computer that can be accessed by a user (i.e., the resources) are generally
`located on a computer’s motherboard.
`33.
`These resources generally include Central Processing Units (“CPUs”) and
`memory, which are found on every laptop and desktop; Graphics Processing Units (“GPUs”),
`which allow a user to see graphics on a laptop or desktop; Solid State Storage Devices (“SSDs”),
`which allow for a computer to store information; and specialized accelerators or smart
`networking interface cards, which allow a computer to perform repetitive tasks. These resources
`are hardware elements.
`34. When these resources are on the same motherboard, they communicate with each
`other, which allows a computer to operate and be used.
`35.
`A virtual machine can either run off of a single motherboard and access these
`resources as local components, or clusters of these virtual machines can be used to service a
`bigger workload and access distributed resources as needed, rather than limiting a virtual
`machine only to the resources on a single, local motherboard.
`36.
`If a resource is not utilized fully, it can become inefficient and “fragment,” which
`can cause a server to perform work slower and negatively affects users of a cloud-based server.
`37.
`Today, upon information and belief, many cloud servers end up resulting in at
`least some poorly or unused resources, and generally only 30%-40% of a server’s overall
`resources are utilized at any given time.
`38.
`Drut’s key technologies are its algorithms with software and hardware elements,
`which provide a solution that allows for more efficient use of cloud-based resources and reduce
`fragmentation of resources.
`39.
`Drut’s algorithms use a mix of software builds (a build refers to activity to
`translate readable source code into a program) that runs off of programmable FPGA cards and
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`Williams, Kastner & Gibbs PLLC
`601 Union Street, Suite 4100
`Seattle, WA 98101-2380
`(206) 628-6600
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`Case 2:21-cv-01653 Document 1 Filed 12/10/21 Page 8 of 46
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`other hardware to fix the resources’ inefficiency by disaggregating the resources, essentially
`drawing on certain resources from a larger pool, as needed, to facilitate pooling of resources into
`coupled clusters.
`40.
`In other words, the resources are grouped so that they can be used on-demand
`without having to soak up the totality of a server. This results in higher utilization of these
`elements (up to 100%).
`41.
`Drut’s technology, which uses optically disaggregated GPUs, enables the use of
`resources that are positioned at greater distances apart than otherwise possible. Server
`components are typically housed in a box where they must fit tightly together, which imposes
`design limitations for organizing and arranging servers and other components, especially in large
`operations. Using Drut’s approach, these resources can be hundreds of meters apart (and
`potentially greater distances), but once connected, they work as if they are local. This allows for
`more efficient use of these resources when there are varying workload requirements. For
`example, a workload that requires more graphics resources can use specialized GPUs without
`other elements of unitized servers being left idle.
`42.
`The impact of this disaggregated approach is ubiquitous across all kinds of data
`centers in commercial enterprises, cloud providers, research computing, and government and
`educational institutions.
`43.
`Drut’s technology, with its foundation of proven and mature manufacturing
`processes, provides a significant economic benefit for the future of data center architecture. A
`data center is the location where a large number of computer systems are stored.
`44.
`There have been various approaches and attempts by companies to improve
`effective utilization of these resources, and, in fact, companies have tried to build various custom
`solutions. But, due to rigidity in connectivity around the resources, and higher economics of
`overall solutions, practical real disaggregation between CPUs, GPUs, and SSDs had not been
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`Williams, Kastner & Gibbs PLLC
`601 Union Street, Suite 4100
`Seattle, WA 98101-2380
`(206) 628-6600
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`Case 2:21-cv-01653 Document 1 Filed 12/10/21 Page 9 of 46
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`effectively achieved specifically for any large-scale data center until Drut developed the
`technology to achieve such results.
`45.
`Drut’s algorithms, and software and hardware components are trade secrets that
`have significant monetary value to Drut (and others in the trade), and as such, Drut guards its
`key technologies closely to maintain its proprietary interests.
`46.
`Drut protects its trade secrets, confidential, and proprietary information
`through a variety of mechanisms. For example, Drut uses a secure computer network with a
`VPN protocol and SSH keys required for login and any access, physical servers in a secure
`location protected by firewall software, and secure office space with electronic keycards required
`for entry. Drut further requires execution of non-disclosure agreements by all employees,
`companies, or individuals to whom it provides confidential information or trade secrets to. The
`algorithms themselves are used in private facilities that are not exposed to public or customer
`access, meaning that the market is especially conducive to effective trade secret protection, if
`confidentiality obligations are abided.
`B.
`Drut Developed a Relationship with Microsoft.
`47.
`Recognizing the need for a more efficient disaggregated cloud-based servers, in
`2019, Microsoft engaged Drut and the parties entered into the MSSA to develop a project,
`through a cooperative technical endeavor, referred to above and herein as The Project.
`48.
`Drut’s owner, Jitender Miglani, was the primary negotiator for Drut regarding the
`scope of The Project and the parties’ relationship with Bryan Tuttle and Joy Fan, who were the
`program sponsors from Microsoft. Mr. Miglani also discussed these and other terms with Harish
`Sachidanandan, then a business development manager for Microsoft. Through their
`communications, the parties shared a clear understanding that Microsoft would not have a license
`to use Drut’s intellectual property until the parties entered into a separate agreement, which never
`happened.
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`Williams, Kastner & Gibbs PLLC
`601 Union Street, Suite 4100
`Seattle, WA 98101-2380
`(206) 628-6600
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`Case 2:21-cv-01653 Document 1 Filed 12/10/21 Page 10 of 46
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`In fact, the MSSA specific contemplates a separate licensing agreement. MSSA
`49.
`§ 12(h) (“[t]his Agreement does not replace any separate written license agreement between
`Microsoft and Supplier, and any conflicts with licensing of Microsoft Materials will be resolved
`as provided in Section 3(b)(1)(ii).”).
`50.
`In fact, the Microsoft program leads themselves knew and expected, and led Drut
`to believe, that Drut was not conveying or licensing its core background technology, and created
`economic models showing Microsoft paying Drut hundreds of millions of dollars for large
`quantities of servers, with such projections and statements being made before, during, and after
`the signing of the MSSA.
`51.
`The MSSA points to a statement of work, an SOW, that would govern The
`Project.
`Neither the MSSA nor SOW provided that time was of the essence.
`52.
`The Project was implemented by Drut and Microsoft to develop a product using
`53.
`other companies’ (including Xilinx, Inc.’s) FPGA cards and hardware, and Drut’s preexisting
`and new software.
`54.
`The Project was specifically beneficial to Microsoft to attain know-how to allow
`it to provide disaggregated servers in the cloud marketplace and address critical fragmentation
`issues currently found in the cloud computing marketplace.
`55.
`All representatives of the parties involved in the contract negotiations understood
`that Drut was working on creating a new product that would involve hardware and software
`components, and that such product would entail Drut’s existing intellectual property, as well as
`Microsoft’s, including new intellectual property that Drut would assist Microsoft with
`developing.
`Specifically, Drut had developed certain intellectual property and trade secrets
`56.
`prior to engaging with Microsoft, including optically disaggregated GPUs and source code
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`Williams, Kastner & Gibbs PLLC
`601 Union Street, Suite 4100
`Seattle, WA 98101-2380
`(206) 628-6600
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`Case 2:21-cv-01653 Document 1 Filed 12/10/21 Page 11 of 46
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`described above, that runs off of programmable FPGA cards and hardware to fix a resource’s
`inefficiency by disaggregating these resources, essentially drawing on certain resources from a
`larger pool, as needed, to facilitate pooling of resources into coupled clusters over a flexible
`transport by connecting two FPGA cards in a reconfigurable manner.
`57.
`The parties understood that Drut would retain ownership of its pre-existing
`intellectual property.
`58.
`The MSSA provided that each party would “own and retain all rights” to its pre-
`existing intellectual property or any intellectual property owned prior to the execution of the
`MSSA. MSSA § 3(a).
`59.
`Section 3(a) of the MSSA also evidences that the parties understood that Drut’s
`preexisting software and intellectual property would not be licensed to Microsoft without a
`royalty or fee. In addition, Section 3(c) of the MSSA also reflected an understanding that the
`parties would discuss any license terms as a separate matter: “Unless the parties agree on written
`license terms, Supplier grants Microsoft and its Affiliates a worldwide, nonexclusive, perpetual,
`irrevocable, royalty-free, fully paid-up right and license . . . .” The Microsoft program leads
`specifically discussed with Drut that this clear, subsequent, royalty-bearing license was needed
`and would be negotiated, and even discussed the economic modeling of that later arrangement.
`60.
`The parties further understood that the intellectual property involved, including
`Drut’s pre-existing intellectual property, was highly confidential. The MSSA contains strict
`confidentiality protections and states, as to Drut’s intellectual property as the “Supplier,” that:
`‘Supplier IP’ means (1) Supplier’s pre-existing or independently
`developed IP and (2) any third-party IP with respect to which
`Supplier has sufficient rights to grant to Microsoft the license and
`sublicense rights contemplated in this Agreement.
`‘Supplier Materials’ means any technology created by a Supplier or
`third-party prior to or outside of the course of any Microsoft SOW,
`but which may be necessary or useful for achieving the requirements
`of a Microsoft SOW (including hardware, software, source code,
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`Williams, Kastner & Gibbs PLLC
`601 Union Street, Suite 4100
`Seattle, WA 98101-2380
`(206) 628-6600
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`Case 2:21-cv-01653 Document 1 Filed 12/10/21 Page 12 of 46
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`documentation, methodologies, know how, processes, techniques,
`ideas, concepts, technologies, and data).
`
`MSSA § 1(p).
`Information shared by Drut with Microsoft under the MSSA and SOW was
`61.
`subject to a Non-Disclosure Agreement (“NDA”), and each party agreed to hold information
`shared in confidence and not disclose such information to third parties:
`During the Term1 plus 5 years, the parties will hold in strictest
`confidence and not use or disclose to any third-party any
`Confidential Information of the other party.
`A party will consult with the other if it questions what comprises
`Confidential Information. Confidential Information excludes
`information known to a party before the disclosing party’s
`disclosure to the receiving party, or information publicly available
`through no fault of the receiving party.
`
`MSSA § 6(a)(2), (3).
`62.
`The SOW breaks down Drut’s Deliverables into 5 “Milestones.” Initially,
`Milestone 1 was due by December 31, 2019; Milestone 2 by January 31, 2020; Milestone 3 by
`February 28, 2020; Milestone 4 by April 20, 2020; and Milestone 5 by May 29, 2020.
`63.
`The SOW required that Microsoft pay Drut for each Milestone: $300,000 for
`Milestone 1; $200,000 for Milestone 2; $300,000 for Milestone 3; $200,000 for Milestone 4; and
`$200,000 for Milestone 5.
`64.
`Each Deliverable was accepted by Microsoft within 15 business days after
`receipt, unless Microsoft expressly rejected a Deliverable.
`65.
`The MSSA provides:
`Acceptance of Deliverables. Unless otherwise agreed, Microsoft
`may evaluate each Deliverable and accept or reject it within 15
`business days after receipt. If Microsoft does not accept or reject
`within that time period, the Deliverable is deemed accepted.
`Supplier will fix rejected Deliverable within 10 business days after
`notice of rejection from Microsoft (‘Correction Period’). If
`Supplier does not fix the Deliverable within the Correction Period,
`
`1 The MSSA defines the “Term” as five years from the effective date (five years from November 20, 2019).
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`Case 2:21-cv-01653 Document 1 Filed 12/10/21 Page 13 of 46
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`Microsoft will have no obligation with respect to that Deliverable
`and Supplier will promptly refund Microsoft Fees paid for that
`Deliverable within 15 days following the end of the Correction
`Period.
`
`MSSA § 2(f).
`In accordance with the SOW, Drut completed a significant portion of the work on
`66.
`The Project on time, and Microsoft admitted that Drut had accomplished Milestones 1 and 2.
`Microsoft did not reject the Deliverables for Milestones 1 and 2. Microsoft and, in some cases,
`both parties, delayed the start of The Project while they resolved certain background issues and
`ambiguities resulting in delay of starting performance, which both parties accepted as faultless,
`in late 2019 and early 2020.
`67.
`However, after Drut’s completion of Milestone 2, Microsoft abruptly refused to
`continue to work cooperatively with Drut, including, among other actions, purporting effectively
`impose several additional material conditions, rendering Drut’s ability to complete remaining
`parts of its work under the SOW impossible, or at best, extremely difficult.
`68.
`Despite Microsoft’s noncooperation, Drut continued to work under the SOW, and
`completed additional portions of the Milestones with the exception of specific parts of the
`Milestones that it was unable to complete due to Microsoft’s refusal to work with Drut. Despite
`Drut’s efforts to complete the Milestones, Microsoft, in late spring 2020, adopted a hostile
`approach and unilaterally decided that Drut had “run out of time” and would not be paid for its
`work on the other Milestones.
`69.
`The several Microsoft program leads that had previously been supportive took a
`newfound hostile tone, implying that Drut was misperforming, and later suggesting that Drut’s
`whole approach was unworkable and uninteresting to Microsoft. They then proceeded to
`pretend, falsely, that Drut’s technology would not be used, and then, when caught red-handed
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`COMPLAINT - 13
`
` 7508829.1
`
`Williams, Kastner & Gibbs PLLC
`601 Union Street, Suite 4100
`Seattle, WA 98101-2380
`(206) 628-6600
`
`

`

`Case 2:21-cv-01653 Document 1 Filed 12/10/21 Page 14 of 46
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`otherwise, claimed that Microsoft had the right to use it, and that all that talk about licensing it
`(if used) was Drut’s sorry confusion.
`C. Microsoft Breached Its Obligations Under the MSSA and SOW.
`70.
`The Project was a mutual, cooperative endeavor, and much of the performance
`by Drut was accompanied by a need for input from Microsoft – which Microsoft initially
`provided, and then abruptly stopped.
`71.
`For example, part of the SOW required that the parties cooperate to develop
`“Specifications” that were essential to the overall progress of The Project.
`72. Microsoft acknowledged that these Specifications were a moving target in
`response to issues and opportunities that arose throughout The Project.
`73.
`The Specifications were approved by both parties on February 29, 2020, and
`memorialized in a written document.
`74.
`The February 29, 2020, approval date of the Specifications and the need for the
`Specifications reflected that the requirements in the MSSA and SOW were insufficient for Drut
`to complete any of the Milestones beyond the first Milestone, in accordance with the originally-
`contemplated timing.
`75.
`Due to the complexity of creating the Specifications, they were not completed
`until February 29, 2020, one day after what was stated as Milestone 3’s original completion date.
`76.
`At the time that the Specifications were approved, Milestone 2 (out of 5) had not
`yet been completed since the Specifications were vital to Drut’s continued work on Milestone 2.
`77.
`The timing of the finalizing of the Specifications naturally caused some
`consequence to the SOW’s schedule, which had initially contemplated an overall completion of
`The Project by May 29, 2020.
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`COMPLAINT - 14
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` 7508829.1
`
`Williams, Kastner & Gibbs PLLC
`601 Union Street, Suite 4100
`Seattle, WA 98101-2380
`(206) 628-6600
`
`

`

`Case 2:21-cv-01653 Document 1 Filed 12/10/21 Page 15 of 46
`
`78. Moreover, beyond the delay caused by the Specifications, in March and April of
`2020, the parties realized that other assumptions that the parties had made when drafting the
`SOW needed to be changed.
`79.
`For example, Microsoft made the decision to switch from the licensed technology
`that was proven to work on a Xilinx card, and instead insisted on working with less-functional,
`but royalty-free technology, on off-the-shelf FPGA cards. Microsoft thereby insisted on a
`material change in the hardware platform.
`80.
`Drut’s platform was built and functioned on a VCU108 board (a development
`board manufactured by Xilinx). Microsoft insisted on switching to a VCU117 (another type of
`card manufactured by Xilinx, but in a different product-type family). FPGAs in different
`families may be programmed differently.
`81. Microsoft then insisted on switching to a Sidewinder card manufactured by Fidus
`Systems, Inc. (compatible with Xilinx products, but in yet another product-type family).
`82.
`Drut was required to transition from VCU108 to VCU117 and then to Sidewinder
`at Microsoft’s direction, because Microsoft happened to have some of these different cards in
`stock or would procure them as Microsoft deemed fit for their internal programs, which Drut did
`not have any visibility concerning. This decision to change the hardware platform was
`effectively imposed by Microsoft, and created consequences in the sequencing in work under the
`SOW that delayed and hindered Drut’s ability to complete the Milestones within the SOW’s
`schedule.
`The MSSA allowed Drut to perform with the royalty-bearing equipment, and the
`83.
`change frustrated this performance and was an attempt to change the Specifications midstream.
`84. While Microsoft could request a “Change Order” to amend the MSSA, it did not
`do so. Instead, it told Drut that it must use the less-functional FPGA components, yet insisted
`on compliance within the SOW’s schedule.
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`COMPLAINT - 15
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` 7508829.1
`
`Williams, Kastner & Gibbs PLLC
`601 Union Street, Suite 4100
`Seattle, WA 98101-2380
`(206) 628-6600
`
`

`

`Case 2:21-cv-01653 Document 1 Filed 12/10/21 Page 16 of 46
`
`The changes imposed by Microsoft had consequences. For example, the intended
`85.
`cost-saving measure of using a royalty-free card failed because the card did not function
`correctly, as Drut anticipated, a fact that Drut had previously brought to Microsoft’s attention.
`86.
`This switch to diff