VMware Hit With Temporary Restraining Order in AT&T Lawsuit

The judge overseeing the AT&T lawsuit against VMware by Broadcom has issued a temporary restraining order that keeps VMware support services intact within the telco – for now.

VMware by Broadcom previously had agreed to keep providing those services until Oct. 21. And it looked as though the two companies might reach a settlement before the judge needed to take any action.

But AT&T and VMware by Broadcom, after telling New York County Supreme Court Judge Jennifer G. Schecter on Oct. 11 that they had been “engaging in settlement discussions," apparently had not reached such an outcome. That would have put VMware support services within AT&T in immediate jeopardy, which presumably is why Schecter issued the restraining order on Oct. 23. 

We’ll learn more soon. Schecter in her brief Oct. 23 interim motion said that the reasons for the temporary restraining order against VMware will be explained via e-filing within a week. 

The restraining order comes one day after AT&T and VMware by Broadcom presented oral arguments to Schecter. And those arguments happened the day after VMware by Broadcom apparently was ready to pull its support services from AT&T. The cloud software provider, now owned by behemoth chipmaker Broadcom, had agreed to extend those support services until Oct. 21. Again, Schecter’s decision keeps those services intact “pending a decision” on the AT&T lawsuit overall.

Related:VMware by Broadcom Might Settle AT&T Lawsuit

Here’s what she wrote in the interim order dated and filed Oct. 23:

“By November 22, 2024, the parties shall e-file and email the court a joint letter that either: (1) indicates that the parties have stipulated to resolve this motion or the entire action; (2) sets forth an agreement on the appropriate duration of the preliminary injunction and the amount of the undertaking; or (3) sets forth the parties’ positions on the proper duration of the preliminary injunction and the amount of the undertaking.”

Channel Futures reached out to both AT&T and VMware by Broadcom for comment. An AT&T spokesperson told us, "“We are pleased with the court's order today and will continue to work to ensure uninterrupted service for our customers.”

Meanwhile, a spokesperson for VMware by Broadcom said the company will "continue to vigorously defend our position. Our focus continues to be providing our customers choice and flexibility while helping them address their most complex technology challenges."

A Refresh on the AT&T Lawsuit Against VMware

The temporary restraining order represents the latest milestone in AT&T’s lawsuit against VMware by Broadcom.

Related:AT&T Sues Broadcom Over VMware Contracts ‘Bullying’

AT&T filed its complaint on Aug. 29, alleging that the Broadcom seeks to breach its VMware contracts with AT&T, putting first responders, other critical government services and national security at risk. 

AT&T says Broadcom is retroactively trying to force it to shift from perpetual to subscription software licensing, which would cost hundreds of millions of dollars. AT&T also has said that Broadcom’s changes would translate into a 1,050% price hike. To date, AT&T has refused to comply with Broadcom’s demands and tried to invoke an extension of its support contract, which it says Broadcom (then VMware) and AT&T agreed to in August 2022. 

Conversely, VMware by Broadcom accuses AT&T of “sensationalism,” saying it failed to do its due diligence in renewing its support services when it had the chance and now is resorting to a “parade of horribles” to protect itself.

Along the way, both sides have tried to convince Schecter to seal their documents. Schecter mostly has refused, stating that “there is no good cause to seal much of [the information] because the public's presumptive right to properly understand the details of this case and the arguments made on the motion for a preliminary injunction outweighs the harms from disclosure.” Some of the filings contain redactions and some have undergone sealing, but the majority remain open for public consumption.

Go here for the complete Broadcom-VMware timeline that led to the AT&T lawsuit against VMware by Broadcom.