WACO, Texas (Legal Newsline) - Xockets, Inc. has received a favorable ruling from the United States District Court for the Western District of Texas in its ongoing legal battle in which it has accused NVIDIA Corporation, Microsoft Corporation and RPX Corporation of stealing its technology.
This decision, issued by District Judge Leon Schydlower on Sept. 25, sets the stage for the upcoming legal proceedings, including a preliminary injunction hearing set for Oct. 24, as Xockets seeks to advance its case against the tech giants.
Xockets filed the lawsuit against NVIDIA Corporation, Microsoft Corporation and RPX Corporation on Sept. 5 and as part of the litigation is seeking to enjoin the release of NVIDIA's and Microsoft's upcoming Blackwell GPU-enabled server computer systems, which it claims will exacerbate the infringement.
In the lawsuit, the Temple, Texas-based tech company accused the plaintiffs of violations of federal antitrust laws and patent infringement in a comprehensive complaint filed in the U.S. District Court for the Western District of Texas.
The suit, which demands a jury trial, accuses the defendants of stealing Xockets' patented Deep Learning Processor Unit (DPU) technology, claiming that their actions threaten Xockets’ exclusive patent rights and disrupt fair competition in the market.
Xockets was founded in 2012 by Dr. Parin Dalal who now works for Google.
During his time at Xockets Dalal invented the DPU which is used in NVIDIA technology.
“NVIDIA did not invent the technology in its BlueField, ConnectX, and NVLink Switch DPUs. This technology was taken from Xockets. And it was done so knowingly,” the lawsuit notes. “Instead of paying fair value for the technology, Microsoft and NVIDIA took it without permission.”
The complaint underscores that NVIDIA acknowledges the value of Xockets' DPU architecture, vital for the emerging AI market.
Xockets alleges “a pattern of illegal cartel behavior engaged in by NVIDIA and Microsoft.”
In connection to its hardware inventions Xockets also noted RPX Corporation was created by the defendants who “have formed a buyers’ cartel to avoid paying the fair market price for the fundamental intellectual property that transformed GPU and GPU-enabled platforms from a niche product for gamers and cryptocurrency miners into the most important industrial component in the United States economy today.”
“The fundamental technology was created by Xockets. This buyers’ cartel is designed to fix below market level the price for the critical technology held by Xockets.”
In its complaint, Xockets outlined several counts of infringement related to multiple patents, including claims of direct and indirect infringement by both NVIDIA and Microsoft.
“The fundamental intellectual property that turned NVIDIA’s GPUs from niche equipment for gamers and cryptocurrency miners to the driver of the AI revolution was created by Xockets,” the company claims in its lawsuit.
Following its entrance into AI technology, NVIDIA has seen its market capitalization increase from $180 billion to $3 trillion, Xockets notes in the lawsuit.
Xockets is seeking injunctive relief and damages, asserting that the defendants’ alleged predatory practices are designed to maintain a monopoly in the cloud computing space.
Xockets argues that NVIDIA's continued expansion into the AI market, while infringing its patents, threatens its ability to attract investment and compete effectively.
The suit details the financial strain Xockets faces due to NVIDIA's alleged infringement, describing it as a tactic of "efficient infringement," where large corporations choose to ignore patent rights, betting on the costs of litigation being less than licensing fees.
Xockets claims that this not only undermines its business opportunities but also harms the broader innovation economy by devaluing patent rights.
Xockets is represented by Waco-based Ciccarelli Law Firm, Irell & Manella LLP, of Los Angeles, and Winstead PC attorneys from Dallas and Austin.