VMware secures procedural victory in Siemens licensing dispute, keeping case in US court

Virtualization giant VMware has scored a significant procedural victory in its legal battle with German industrial conglomerate Siemens over alleged unlicensed software use, after a US magistrate judge recommended keeping the case in American courts.

The dispute's origins

The case began in March 2025 when VMware accused Siemens' US operations of requesting extended support for software that included products the company had not properly licensed. According to court documents, Siemens initially provided VMware with a list of software for which it sought extended support, but VMware claims this list contained numerous unlicensed products.

Siemens later submitted an amended list of its VMware software usage. VMware alleges it attempted to conduct a license audit, but Siemens refused to participate. The dispute escalated when Siemens claimed VMware failed to honor what it believed was its right to purchase extended product support.

Jurisdictional battle

A central issue in the case has been determining the appropriate venue for the dispute. Siemens argued that its contracts with VMware specified that any disagreements should be heard in German courts. However, VMware countered that because the alleged unlicensed software use occurred within the United States, American courts were the proper jurisdiction.

On Tuesday, Magistrate Judge Laura D. Hatcher of the Delaware District Court issued a Report and Recommendation indicating she favors VMware's position. The report recommends denying Siemens' attempt to transfer the case to Germany.

What the ruling means

Reports of this nature are procedural documents used by US courts to outline the reasoning and legal precedents likely to inform a final decision. While not binding, they carry significant weight and often predict the court's eventual ruling.

The magistrate's report gives both parties 14 days to file objections, but limits these submissions to ten pages. This restriction is designed to keep the focus on the issues raised in the report rather than allowing either party to introduce new arguments.

For VMware, this procedural victory is crucial. Having the case heard in US courts provides several advantages:

• Familiar legal framework and precedents
• Potentially more favorable jurisdiction for software licensing disputes
• Avoidance of the complexities and costs of international litigation
• Access to US discovery procedures that may be more extensive than German counterparts

Broader context

This case is part of a pattern of licensing disputes involving VMware. The company has previously settled similar cases, though its dispute with UK retail giant Tesco continues. In that matter, Dell, which is also a party to the case, recently filed a claim seeking nearly £14 million in damages if Tesco prevails.

These licensing disputes highlight the ongoing challenges in enterprise software licensing, particularly around virtualization technologies where usage can be complex and difficult to track. As organizations increasingly rely on virtualization for their IT infrastructure, disputes over proper licensing and support rights are likely to remain common.

The outcome of this case could have broader implications for how software licensing disputes are handled when they involve multinational corporations and cross-border elements. A decision to keep the case in US courts despite contractual language favoring German jurisdiction may influence future cases involving similar jurisdictional questions.

What's next

Both parties now have the opportunity to file objections to the magistrate's report within the 14-day window. If no substantial objections are raised, the report will likely be adopted by the district court, cementing VMware's procedural victory.

Following this jurisdictional determination, the case will proceed to address the substantive issues of whether Siemens indeed used unlicensed software and what remedies, if any, are appropriate. Given the stakes involved in enterprise software licensing disputes, this case will be closely watched by both software vendors and their enterprise customers.

The procedural win gives VMware a stronger position as it moves forward with its claims against Siemens, potentially influencing settlement negotiations or the ultimate outcome of the case.