Wedoany.com Report on Feb 13th, In the cross-border legal dispute between Broadcom-owned software company VMware and German industrial giant Siemens, VMware has recently gained a preliminary advantage in a Delaware, USA, court. A magistrate judge has recommended dismissing Siemens' request to transfer the case to Germany for trial, reasoning that the language in the forum selection clause within their agreement is too narrow in scope to cover the current copyright infringement dispute.
Siemens argued that its 2012 master software license agreement with VMware explicitly grants exclusive jurisdiction over "any dispute arising out of this agreement" to the Munich courts, therefore the case should be transferred to Germany. However, Magistrate Judge Laura Hatcher pointed out in a 21-page investigative report that the forum selection clauses in the precedents relied upon by Siemens used language such as disputes "concerning" the agreement, which has a significantly broader semantic scope than the "arising out of" language in the clause at issue. Based on this, she recommended dismissing Siemens' transfer request.
Although VMware currently leads in this clause interpretation dispute, this ruling is only a preliminary finding. Both parties have approximately 14 days to file written objections. Hatcher also recommended removing the German parent company, Siemens AG, from the list of defendants in this case, on the grounds that VMware failed to sufficiently demonstrate personal jurisdiction over that entity. However, Siemens' US affiliate remains a defendant in the case.
The case originated from a copyright infringement lawsuit filed by VMware against Siemens' US branch in March of last year. VMware alleges that Siemens used its software products far beyond the scope of its license authorization. Siemens attempted to steer the case towards German courts using the contract's jurisdiction clause, while VMware contends that the core of the dispute is copyright infringement, not contract performance issues, and should therefore be heard in a US court.
This case is just one of several legal disputes VMware has faced since its acquisition by Broadcom and the implementation of its licensing policy reforms. As VMware Cloud Foundation (VCF) suite becomes its core product, some customers have reported significant increases in licensing costs. Companies like UK retailer Tesco have already filed lawsuits over licensing issues. US telecom giant AT&T previously criticized Broadcom but later reached a settlement; a Dutch water authority successfully obtained a court order requiring VMware to continue providing its original services.
Broadcom CEO Hock Tan recently stated that over 90% of VMware's top 10,000 customers have already signed up for the VCF platform. Despite ongoing business transformation, legal disputes surrounding licensing terms, contract interpretation, and court jurisdiction continue to develop. In this case, the semantic details of the forum selection clause have become a key battleground, and the direction of subsequent proceedings and potential appeals remains to be seen.
