Background Information on the ad hoc publication: ParTec AG Files Patent Infringement Lawsuit Against NVIDIA at the UPC in Munich

Munich, October 28, 2024
ParTec AG was founded in 1999 as a spin-off from the University of Karlsruhe. In its early years, ParTec was heavily involved in the development and production of operating software for large computers, known as middleware, which it continues to work on to this day. ParTec’s software, ParaStation Modulo, is used in many of Europe's largest supercomputers.

With the continued, intensive work on the software, it became increasingly clear over the years that the design, construction and technical equipment of supercomputers followed a traditional principle, which would make future significantly larger supercomputers much too slow, cumbersome and energy-hungry. In other words, computers based on traditional design principles would ultimately not be able to meet the dramatically increasing demands for computing capabilities.

Hence, around 2005, ParTec began the developmental work for later widely termed as "software-defined hardware". With the invention of the dynamic Modular System Architecture (dMSA), which ParTec patented in 2010, a dynamically adjustable processor and supercomputer architecture was developed, perfectly adaptable to computing requirements, transitioning from a static processor design. Over the following years, this principle was intensively developed, especially in close collaboration with the Jülich Research Center, eventually leading to the construction of large facilities, culminating in the currently largest AI supercomputer in the world, JUPITER, and other supercomputers in Germany and Europe.

A core component of this globally unique dMSA idea and subsequent development was to intelligently allocate the microprocessors of any computer of varying types and capabilities, such as CPUs and GPUs, to each other and subsequently being able to dynamically change this allocation while computing.

Over the years, great care was also taken to develop the patent portfolio for further self-financed inventions. It is worth noting that this new technology and architecture initially met with rejection by some in the relevant sciences and industries. Today, it is the technology of choice.

With ever larger and more powerful supercomputers a revolution in the realm of possibilities emerged: Artificial Intelligence. The mathematics of neural networks had been known and well researched for some time. However, until recent years, the massive computational capacity needed to process the necessary vast amounts of data was lacking. ParTec realized early on that accelerator processors, GPUs, would play a very special role. ParTec sought and conducted intensive cooperation talks with NVIDIA Corporation in California before 2019, but particularly in 2019. During one of these visits in 2019 ParTec's architecture, the ParaStation software, and its key patents were intensely presented. In particular, the core patent of the dMSA was highlighted, and copies were provided.

At this meeting in 2019 in California, attended by leading representatives of NVIDIA, NVIDIA expressed keen interest in ParTec’s technologies and declared a willingness to develop such machines together with ParTec based on the ParaStation software. Subsequently, NVIDIA never returned to its offer to collaborate. However, a good cooperation emerged in building various supercomputers in which ParTec was a leading participant in Europe, also because NVIDIA increasingly established itself as the supplier of choice for GPUs.

With the recent, avalanche-like surge in AI capabilities and demands on supercomputers, particularly driven by Microsoft with its Azure AI infrastructure and the construction of dozens of massive supercomputers worldwide, the demand for GPU products from NVIDIA Corporation potentially increased. This eventually led to these companies now belonging to the top tier of the world’s most valuable companies.

The underlying architecture of NVIDIA Corporation’s key GPU products is the subject of the patent infringement lawsuit in Munich (see www.par-tec.com). This lawsuit seeks to prohibit NVIDIA from selling in the protected European countries and demands compensation. This lawsuit became unavoidable as NVIDIA chiefly refused to enter discussions with ParTec about the supply of GPU products. Particularly, a letter from ParTec's CEO to NVIDIA's CEO remained unanswered to this day. ParTec is in Europe establishing infrastructure of large AI-specialized supercomputers and must also be able to rely on NVIDIA products. NVIDIA justified its refusal to discuss the matter with ParTec by pointing out that ParTec had sued Microsoft for patent infringement of the patents now also being claimed in Munich just a few months ago in Texas, USA. Noting that Microsoft is NVIDIA's biggest customer ParTec’s repeated offers for talks were rejected. This refusal continues to this day and has the potential to become relevant under competition and antitrust law.

All this culminates directly in a tremendous economic and geopolitical conflict. With ParTec’s technology and architecture, Germany and Europe have the opportunity to build their own sovereign industry. ParTec claims that its technology and architecture is currently the leading in the world and believes that it is used by the leading companies Microsoft and NVIDIA infringing patents. ParTec considers it unavoidable that artificial intelligence will fundamentally change human life and all conditions. Economies lacking the ability to produce and sovereignly use the indispensably necessary machines will face a profound permanent disadvantage and this already within a short time. Another problem that can be solved with ParTec's technology and program for establishing a Europe-wide infrastructure of highly efficient AI supercomputers in Germany and Europe: the world is currently nearly fully dependent on the – patent-infringing – infrastructure and supercomputers of NVIDIA and Microsoft in the USA and distributed outside Europe for processing artificial intelligence models. ParTec regards these quasi-monopolies and the absolute dependency on non-European supercomputers as the greatest threat to Germany and Europe’s current situation. That is one issue. The other issue is that for the fair entrepreneurial development of Europe’s high-tech location ParTec cannot accept that although ParTec’s technology is used, collaboration is refused due to the assertion of its rights.