Key Takeaways
- VMware filed suit against Siemens AG in the U.S. District Court for the District of Delaware on March 21, 2025, alleging unauthorized overdeployment of VMware software valued at over $100 million.
- The dispute traces back to a September 2024 support renewal request in which Siemens allegedly listed over 30,000 software products, then later provided a revised list omitting thousands of items.
- VMware's complaint asserts direct, contributory, and vicarious copyright infringement, but conspicuously does not allege breach of the governing license agreement.
- Siemens filed motions to dismiss on June 10, 2025, arguing the case belongs in a foreign jurisdiction under a forum selection clause in the 2012 Master Software License Agreement.
- LicenseFortress's own view is that the balance of factors favors Siemens and predicts the U.S. court will decline jurisdiction.
A Lawsuit Testing the Boundaries of Global Software Licensing Appears to Stem from a Single Disclosure Connected to a License Renewal Request
In March 2025, VMware filed a lawsuit in the U.S. District Court for the District of Delaware against Siemens AG and its affiliates, alleging unauthorized overdeployment of VMware software products. VMware's complaint, filed March 21, 2025, claims Siemens deployed tens of thousands of unlicensed VMware software instances—valued at over $100 million—and failed to cooperate with VMware's demand for entitlement verification.
The complaint followed an alleged September 2024 support renewal request from Siemens, in which Siemens allegedly indicated use of over 30,000 software products. VMware objected to the request, stating many of the items listed had not been properly licensed and therefore could not be renewed. In subsequent exchanges, Siemens provided a revised list omitting thousands of items but apparently did not explain the discrepancy to VMware's satisfaction. VMware also requested that Siemens run scripts or submit to a third party auditor to identify actual deployments. According to the complaint, Siemens refused to do so. (We do note that, in the absence of a formal audit clause or other contractual provision requiring licensee participation in verification compliance, Siemens's refusal may be seen as uncooperative but not necessarily noncompliant.)
"It is far too early to speculate as to which party is in the right," says Joel T. Muchmore, a software licensing attorney at Beeman & Muchmore, LLP. "However, it does appear that Siemens rendered itself vulnerable with the initial renewal request that it later retracted." Accordingly, Mr. Muchmore stresses treating every vendor interaction seriously. "Wherever the truth lies, Siemens appears to be stuck with the unenviable task of trying to unring a bell. If nothing else, this underscores the importance of treating every single representation to a vendor with the utmost of care."
VMware's Causes of Action
The complaint includes three causes of action:
- Direct copyright infringement
- Contributory infringement
- Vicarious infringement
VMware further argues that Siemens AG had a role in managing deployment across its global infrastructure and that downloads occurred through U.S.-based servers, making its case for U.S. jurisdiction.
Conspicuously absent are any allegations regarding breach of the governing license agreement.
Audit or File Suit?
It is curious that VMware chose to file suit for copyright infringement rather than initiate a formal audit or otherwise use the courts to compel VMware to participate in an audit. Notably, VMware alleges several times that it proposed appointing a third-party auditor, but that Siemens "rejected" the proposal. The controlling agreement (attached to a Siemens declaration) includes an audit provision that expressly allows a third-party auditor, but VMware's complaint does not claim Siemens had any obligation to follow the contractual verification procedures. (In fact, in one of its moving papers Siemens itself cryptically refers to VMware as demanding an "impermissible audit.") That absence is telling and suggests that VMware either lacked an ability to enforce the audit provision and/or had other strategic reasons for filing suit.
Key reasons VMware may have opted for litigation instead of a formal audit (or seeking enforcement of the audit provision) include:
- No ability to enforce the audit clause – It is possible that the audit provision was unenforceable for contractual reasons (e.g., VMware had already conducted an audit during the preceding 12 months).
- Strategic pressure – Filing suit can create urgency and leverage in negotiations, especially if the vendor believes the customer is underlicensed but isn't cooperating voluntarily.
- Jurisdictional pressure – It is clear that VMware wishes for this matter to proceed in the U.S. Including a cause of action that alleges breach of an audit provision could strengthen Siemens's procedural arguments regarding the proper forum and, potentially, open up an exhaustion of remedies defense.
Siemens's Legal Strategy: Procedural First, Substantive Later
On June 10, 2025, Siemens filed two motions to dismiss the case. The primary thrust of both is that the case belongs outside the U.S. Among other things, Siemens points to a forum selection clause in the 2012 Master Software License Agreement (MSLA) requiring that disputes be handled in a foreign jurisdiction.
Siemens denies the allegation of overdeployment, stating it has "repeatedly explained to VMware why its allegations are incorrect," but, at this time, has provided no detailed rebuttal or supporting documentation. Unlike its detailed legal responses to jurisdictional and contractual issues, at this stage in the proceedings, Siemens remains vague on the core facts regarding its actual usage.
VMware's opposition to Siemens' motions to dismiss, filed in June 2025, counters that the MSLA does not cover statutory copyright claims and that Siemens's interpretation of the forum clause is overly broad. VMware also reaffirms that many infringing acts involved Siemens's U.S. affiliates and U.S.-based infrastructure.
Siemens's Current Silence on the Allegations
While Siemens strongly disputes VMware's right to bring the case in the U.S., by focusing on the procedural, it avoids offering any detailed rebuttal to the license overuse claim. Due to the procedural posture of the matter, Siemens's denial need not be specific, avoiding the costly submission of records and alternative license counts.
On the other hand, Siemens provided extensive details supporting its motions with arguments regarding:
- The forum clause in the MSLA
- The physical location of the VMware servers
- The alleged conflation of Siemens AG and its affiliates
Siemens asserts that pertinent discussions have taken place in Germany for months and that Germany can fully resolve the dispute, while U.S. courts cannot. Siemens also claims VMware filed the relevant U.S. copyrights this spring, suggesting improper forum shopping. If the case proceeds in the U.S., Siemens will need to produce detailed entitlement records that could either validate or undermine VMware's $100M claim.
Our Modest Prediction
While the court has yet to rule, it is our view that the overall balance of factors favors Siemens's position. The contract contains a forum selection clause pointing to a foreign venue, and Siemens AG—the central defendant—is based outside the U.S. VMware argues that U.S.-based downloads and subsidiaries are involved, but its filings fail to clearly establish that Siemens AG, the contracting party, committed infringing acts on U.S. soil. Siemens maintains that only Germany can resolve the dispute, and VMware's recent copyright registrations could tip the decision.
As a result, it is our prediction that the court will decline U.S. jurisdiction. This would allow Siemens to avoid U.S. discovery and halt VMware's $100+ million claim—at least in the U.S.
Closing Thoughts – Seek Technical Assistance Early
This entire dispute appears to have begun with a renewal request listing tens of thousands of VMware products—many of which allegedly didn't align with Siemens's purchase history—ultimately leading to VMware's lawsuit. It's a clear example of how something as routine as submitting an inventory can spiral into a high-stakes, high-cost and high-risk legal battle.
At LicenseFortress, we manage every engagement between the customer and the software vendor to ensure inventories are accurate, communications are strategic, and nothing sent to the vendor exposes the organization to unnecessary risk or triggers an audit. Our approach helps clients avoid exactly the kind of legal and financial fallout now facing Siemens.
