In the ever-evolving domain of global technology licensing, the case of VMware LLC v. Siemens AG, et al., C.A. No. 25-353-RGA-LDH (D. Del. Feb. 10, 2026), provides an analysis of how forum selection clauses interact with statutory intellectual property claims. This dispute, centred on allegations of widespread software over-deployment and copyright infringement, highlights the balance between contractual obligations and statutory protections in private international law (PrIL).
As corporations increasingly operate across borders, the precision with which they draft jurisdictional agreements becomes paramount, as a single phrase can determine whether a dispute is adjudicated in a domestic court or a distant foreign forum.
Introduction
The ratio of this judgment centres on the narrow interpretation of the phrase “arising out of” within a forum selection clause. The court determined that such language, unlike broader phrases like “relating to” or “regarding,” does not naturally encompass statutory copyright infringement claims even when a contractual relationship exists between the parties. This distinction is important because it prevents a contract from becoming an all-encompassing jurisdictional vacuum that pulls in every potential tortious or statutory dispute simply because the parties have a history of dealing with one another.
The implications of this case are noteworthy for the practice of PrIL. It reinforces a “plain meaning” approach to contract interpretation that respects the specific linguistic choices of the parties. For common law jurisdictions like India, which often look to U.S. jurisprudence for guidance in complex commercial matters, this case might even serve as a persuasive authority that statutory rights, like copyright, should not be easily subsumed by narrow contractual forum choices.
Factual Background
The dispute involves VMware LLC, a prominent developer of virtualization and cloud computing software, and the German conglomerate Siemens AG. The relationship was governed by a Master Software License Agreement (MSLA) entered into on November 28, 2012, which was later supplemented by a 2021 amendment and an Enterprise License Agreement (ELA). These agreements authorized Siemens and its worldwide affiliates to use specified VMware software products and receive related support services.
The conflict was ignited in September 2024 when Siemens AG submitted a “September 9 List” to VMware to renew support services. VMware alleged that this list revealed software deployments that “far exceeded the number of licenses” actually purchased. VMware concluded that Siemens had downloaded, copied, and distributed products for which it held no valid license. Although Siemens retracted this list on October 29, 2024, and provided a revised one, VMware viewed the initial disclosure as evidence of substantial copyright infringement. VMware specifically alleged that these unauthorized downloads were facilitated through its U.S.-based servers, with a significant portion of the infringing deployments occurring within the United States.
Judicial Background
VMware filed a three-count complaint in the District of Delaware, asserting claims for direct, contributory, and vicarious copyright infringement under the U.S. Copyright Act, 17 U.S.C. § 101 et seq. The Defendants responded with several procedural motions aimed at dismissing the case. These included a motion to dismiss under the doctrine of forum non conveniens, citing the MSLA’s forum selection clause; a motion to dismiss for lack of personal jurisdiction over the German parent company, Siemens AG, under Federal Rule of Civil Procedure 12(b)(2); and a motion to dismiss for failure to state a claim under Rule 12(b)(6), arguing against the extraterritorial application of U.S. copyright law.
The matter was referred to a Magistrate Judge, who held oral arguments on November 18, 2025. The resulting Report and Recommendation addressed whether the litigation should proceed in Delaware or be moved to Munich, Germany, as dictated by the MSLA.
Arguments of the Parties
The Defendants argued that the entire dispute was essentially a “payment dispute” that grew directly out of the contractual relationship established by the MSLA. They contended that since the software was originally obtained under the MSLA, any claim regarding its use “arose out of” that agreement. Siemens leaned on the idea that VMware was attempting to avoid a valid forum selection clause by re-characterizing a contract dispute as a copyright claim. They further argued that Siemens AG, as a German entity, lacked the requisite “minimum contacts” with the United States to justify the court’s jurisdiction.
VMware countered that its claims were based on the violation of federal statutory rights that exist independently of any contract. They highlighted that the MSLA’s forum selection clause in § 9.17 was narrow, covering only disputes “arising out of” the agreement, rather than broader “relating to” language. Furthermore, VMware pointed to a “carve out” provision in MSLA § 9.18, which explicitly permitted the parties to seek injunctions to enforce intellectual property rights in the courts of “any country” that accepts jurisdiction. On the jurisdictional front, VMware argued that Siemens AG’s centralized management of U.S.-based licenses and its use of U.S.-hosted download servers provided a sufficient basis for jurisdiction under Rule 4(k)(2).
Court’s Holding and Reasoning
The court recommended denying the motion to dismiss for forum non conveniens, granting the motion for lack of personal jurisdiction over Siemens AG, and denying the motion for failure to state a claim regarding extraterritoriality. In reaching its decision on the forum selection clause, the court conducted a rigorous textual analysis. It heavily cited the Third Circuit’s decision in In re McGraw-Hill Global Education Holdings LLC, 909 F.3d 48 (3d Cir. 2018), where a copyright claim was found to be within a clause covering “disputes regarding” an agreement. However, the court distinguished the present case by noting that “arising out of” has a much narrower connotation than “regarding”.
Relying on John Wyeth & Bro. Ltd. v. CIGNA Int’l Corp., 119 F.3d 1070 (3d Cir. 1997), the court emphasized that “whether or not a forum selection clause applies depends on what the specific clause at issue says”. Because VMware’s complaint did not rely on the MSLA to establish its right to sue for infringement, and because the Defendants had not yet asserted the MSLA as an affirmative defence, the court found the copyright claims fell outside the narrow “arising out of” scope. The presence of the “carve out” further supported this, as it indicated the parties contemplated that IP-related actions might be brought in various jurisdictions.
Regarding personal jurisdiction, the court applied the test from Saudi v. Acomarit Maritimes Servs., S.A., 114 F. App’x 449 (3d xCir. 2004), which requires a claim under federal law and sufficient contacts with the U.S. as a whole under Rule 4(k)(2). While the claims against the U.S. Affiliate Defendants could proceed, the court found insufficient evidence of Siemens AG’s direct “minimum contacts” to satisfy the due process standards of Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009).
Conclusion and Takeaway
This judgment serves as a critical warning that the specific phrasing of a jurisdictional clause can have a decisive impact on the litigation of intellectual property rights. By maintaining the distinction between contractual “arising out of” claims and statutory copyright actions, the court has preserved the ability of IP holders to seek domestic remedies for unauthorized use, even when a master license agreement exists.
For common law countries like India, this case reinforces the principle that courts should prioritize the literal text of a forum selection clause over a broad, generalized interpretation of the parties’ relationship. Ultimately, the VMware decision underscores that in the realm of PrIL, linguistic precision is not just a drafting preference but a fundamental determinant of where and how justice is sought.
