MDS Micro Vs Supermicro/ Brown/ Dickerman - Free Essay in Antitrust Law

Karriem Adams designed the MDS QUADv Server System (Virtual Appliance) in 2008 which is an energy-efficient, fully redundant, hot-swap, high bandwidth, highly dense computer server system with 4x hot-swappable/ pluggable chargers, 4x custom hot- swappable/ pluggable trays, (L/R) front LED indicator wing displays, dual hot- swappable/ pluggable power supplies, custom backplane for hot- swappable/pluggable servers, dual hot- swappable/ pluggable power supplies and 24x 2.5HD / 12x 3.5 HD Hard drive treys under the front cover.

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Karriem's company, MDS Micro, then sold numerous QUADv servers to VMware and worked with them and other groups and departments within VMware on the QUADv servers. VMware loved the QUADv servers so much that they stole them. Super Micro Computer Inc, one of VMwares largest server partners then usurped MDS Micro out of VMware and created the VMware EVORAIL with Mornay Van Der Walt, MDS's contact. Super Micro then began selling the QUADv servers as the VMWARE EVORAIL System.

The QUADv server systems integrated with the Vmware software created a full redundant virtual appliance in a box worth over $100 million in revenues. Super Micro also acquired a patent on the QUADv server system and licensing deals with other manufacturers to build similar EVORAIL boxes. VMware's largest competitor, Nutanix, also buys the MDS QUADv server systems from Super Micro. Super Micro then stole MDS Micro's clients, distributors,and partners.

Super Micro than admitted to usurping MDS in order to get direct access to VMware. Direct access would lead to joint marketing and market positions with VMware, and promotions. By usurping MDS, Super Micro would be able to build better relations with VMware. All the Super Micro products sold in partnership with VMware was MDS Micro intellectual property designed by Super Micro for MDS Micro. Before MDS was usurped, Super Micro had no relationship with VMware Global Engineering division or their contact, Mornay Van der Walt.

As the CEO of MDS Micro, I believe Super Micro violated Antitrust, trade secret and anticompetitive laws by the wrongful usurping of MDS and getting into a partnership with VMware to defraud MDS of its market position (Markham, 2010). MDS Micro lost potentially billions of dollars in revenue while Super Micro makes billions through their channel sales. The Intellectual Property rights which Super Micro acquired through fraud are worth millions of dollars and will continue to generate a lot of ,money over the next decade. MDS was also denied its right to gain revenue through licensing with other manufacturers like Dell and HP to create similar MDS QUADv server systems.

Clearly, from the facts and evidence, MDS Micro rights have clearly been violated and this conduct warrants an investigation from the Department of Justice. Section 2 of the Sherman Act provides that to prove the acquisition or preservation of monopoly power through anticompetitive means, it must be shown that the plaintiff controls monopoly power and he or she used anticompetitive means to acquire and maintain that monopoly (Markham, 2010).

The test to prove if an action is anticompetitive is to show that the alleged offender employed it to improve its position or to sabotage its rivals. This fact has been proved from the description given. Therefore, Super Micro Computer Inc should be investigated and charged with antitrust, anticompetitive and trade secrets violations.

References

Markham, W. (2010). An Overview of Antitrust Law. Retreived on April 28, 2016 from http://www.markhamlawfirm.com/law-articles/antitrust-law-san-diego/Sherman Antitrust Act (Sherman Act, 26 Stat. 209, 15 U. S. C ss 1 7)