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In press conference on Nvidia lawsuit, ParTec’s CEO describes UPC as “pragmatic and efficient” with injunctions issuing after 12-18 months

Context: German supercomputer firm ParTec, which has been conducting research in that field for 15 years and has helped build various supercomputer clusters, filed patent infringement actions against two of the world’s three most valuable companies: Microsoft in the Eastern District of Texas (June 10, 2024 ip fray article) and Nvidia in the Unified Patent Court’s (UPC) Munich Local Division (LD) (October 28, 2024 ip fray article).

What’s new: Yesterday, ParTec held a virtual press conference with dozens of participants, among them financial and local media as well as specialized outlets such as ip fray. Various lawyers were also attending, presumably on behalf of the two large defendants as well as other companies operating in the same field. Nothing new was announced, but ParTec CEO Bernhard Frohwitter, with his decades of experience as a patent litigator, explained what gave rise to the Nvidia complaint and commented on how the dispute(s) might be resolved. He particularly praised the UPC’s pragmatism and efficiency.

The participation of various media outlets in the press conference reflected that ParTec’s enforcement actions are drawing significant attention. They involve foundational supercomputer technology that is essential to the operation of large data centers capable of providing the computer power needed for Generative AI applications. The defendants are very large corporations. The plaintiff is an operating company, but its CEO is also a seasoned patent enforcer.

Nothing major has happened in the Microsoft case. Last week, Microsoft filed a notice of compliance according to which it had served, in accordance with the Judge Gilstrap’s Patent Local Rules, its invalidity contentions on ParTec’s counsel by email. The invalidity contentions themselves were not filed with the court.

Mr. Frohwitter referred yesterday’s audience to the public Microsoft complaint and steered clear of commenting on the issues in the case in any way. In addition, he repeatedly made a disclaimer that he was just voicing opinions.

With respect to the Nvidia case, Mr. Frohwitter’s ability to comment specifically was restricted by the fact that a UPC complaint, unlike a complaint in U.S. district court, is not public.

Despite those restrictions, it was helpful to hear from Mr. Frohwitter himself what led to the Nvidia complaint. Mr. Frohwitter stressed that the filing of patent litigation must not be equated to an outbreak of hostilities. He noted that the lawyers working on opposing sides of such cases often even become friends.

According to Mr. Frohwitter’s explanations, ParTec considers the biggest problem for its market, and of its chances as a European technology company, to be a dependency on chipsets and cloud computing resources. At the same time, he said that despite Nvidia’s decision to stop supplying ParTec (apparently in response to the Microsoft lawsuit), there fortunately are alternatives such as AMD, and ParTec continues to be able to build supercomputers.

Asked whether ParTec would be prepared to extend licenses to the defendants, Mr. Frohwitter said that an amicable resolution of the disputes could also involve licensing. He did not want to get into the specifics, but it sounded like ParTec is looking for a comprehensive solution that will provide everyone involved with freedom to operate and access to essential technology.

Mr. Frohwitter hopes that progress with the UPC case against Nvidia can bring about a settlement, given that the UPC is “a pragmatic and efficient court” that adjudicates such cases within 12 to 18 months of the filing of the complaint.

It appears that ParTec is almost a “poster child” of the kind of company that politicians particularly hoped would benefit from the UPC: a relatively (as compared to the defendants) small European innovator that now has cost-efficient and timely access to patent remedies in a large number (18) of counties, provided that it prevails on the technical merits.

As ip fray noted in its analysis of recent UPC filing statistics (November 5, 2024 article), ParTec v. Nvidia is one of the cases with the greatest potential to encourage other patentees to bring UPC complaints (but, again, subject to ParTec’s ability to prove the infringement of valid patents).

Another participant in the press conference asked whether ParTec was going to sue other companies. Mr. Frohwitter was not in a position to make any such announcement and noted that the number of players in this field is rather limited.

ip fray asked Mr. Frohwitter whether ParTec and its licensing agent BF exaQC might bring assertions over other patents from their respective portfolios in the event that no satisfactory solution is worked out within a year or two. Mr. Frohwitter responded that he was reluctant to discuss this, but he was able to say that these companies have a broad portfolio of patents and patent applications, developed mostly in a research and development center in the Northern German town of Juelich. He said they are “among the very few to dare to develop quantum computers to be integrated into supercomputers.”

The patent families-in-suit will have a couple more members soon, and once there have been additional patent grants, they will check against competitors and companies in the field. “Everyone must do that,” he said in reference to industry practice. Based on such analysis, they will then determine whether it is advisable to bring further patent assertions.