As I understand it, an important part of VMware’s closed-source hypervisor depends on Linux device drivers to communicate with hardware. VMware implemented their own interface, compatible with the Linux one, in order to allow these drivers to work. However, in doing so, they appear to have copied a lot of GPL-licensed code from the actual Linux kernel. There are probably more subtleties to the lawsuit than that, but more details here: <http://lwn.net/Articles/635290/>.