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Virtualization's Dirty Laundry Aired in German Court Room

Quoting Virtual Strategy Magazine

Netsys has sued Parallels' German distributor for copyright violation claiming Parallels' virtualization products are directly based on a line of products that Parallels developed on paid commission for Netsys, of which it says, Netsys has been assigned all copyrights.

What reads like a novel of corporate intrigue and suspense, court documents of the lawsuit between financier Netsys and the accused, Avanquest, attempt to answer lingering questions in the virtualization community – what happened to the desktop virtualization platforms twoOStwo and SVISTA? These two products came and went, never really making it to market, although both products had the potential to give VMware and Connectix (acquired by Microsoft) a run for their money in the desktop virtualization market. To try and answer that question, we rely on the court documents to give us a brief history and timeline, and then try to corroborate that with information found on the Internet.

WHAT IS THE LAWSUIT ABOUT

Netsys has sued Parallels' desktop virtualization distributor in Germany, Avanquest, for copyright violations claiming that Parallels’ products are directly based on a line of products that Parallels developed on paid commission for Netsys, of which it says Netsys has been assigned all copyrights. The argument that the claimant makes is that all of the evidence suggests that Parallels has taken the product they had developed on paid commission for Netsys, enhanced it further and then ultimately began distributing it on their own.

Netsys' initial goal with the lawsuit is to stop the sale and distribution of Parallels’ virtualization software products in Germany.

The first lawsuit, where Netsys requested a temporary injunction from the Landgericht (district court) of Berlin, failed. They were trying to keep Avanquest from selling any more copies of the Parallels virtualization products. (Avanquest isn’t a normal reseller; it acts more like a vendor selling localized versions of Parallels in its own branded boxes across Europe). I say the lawsuit failed, but what it did do was confirm that Avanquest could be sued in a German court according to German law. The court seemed to follow on every aspect of the complaint, but did not conclude that today’s Parallels products are at least in part based on twoOStwo, and thus violating Netsys’ copyrights. However, as this was an “urgency proceeding,” there was no way to hear “arbitrary witnesses” and experts. As such, the court did not consider all the evidence that Netsys otherwise would have presented in support of its claim of copyright violation.

Netsys has again sued Avanquest, but this time requested a full trial, in which "arbitrary witnesses" and experts can be called and heard by the court. And as with the first trial, it seems as though Parallels has once again entered into the proceedings as a "trial party member."

The only thing left, according to Netsys, is the presenting of the full evidence for the copyright violation. However, if Netsys wins this trial, the court will only order Avanquest to stop selling Parallels in Germany. If that were to happen, it seems like it would be up to Netsys to decide whether or not they take things any further.

THE PRODUCT TIMELINE

Read the rest of this article on Virtual Strategy Magazine, here.

Published Tuesday, May 29, 2007 5:33 PM by David Marshall
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Simon Crosby, CTO, XenSource » Blog Archive » Apple’s Virtualization Strategy: Virtualize or be Virtualized? - (Author's Link) - May 31, 2007 7:38 PM
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