`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`CIVIL ACTION NO. 2:19-CV-00395-JRG
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`BRIGHT DATA LTD.,
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`Plaintiff,
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`v.
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`TESO LT, UAB, METACLUSTER LT,
`UAB, OXYSALES, UAB,
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`Defendants.
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`ORDER
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`Before the Court is Plaintiff Bright Data Ltd.’s (“Bright Data”) Motion for a Preliminary
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`and Permanent Injunction Against Infringement (the “Motion”) (Dkt. No. 529). Having considered
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`the Motion, the related briefing, and the applicable law, the Court is of the opinion that the Motion
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`should be DENIED.
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`I.
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`BACKGROUND
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`On December 6, 2019, Bright Data filed its complaint against Defendants Teso LT, UAB,
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`Metacluster LT, UAB, and Oxysales, UAB (collectively, “Oxylabs”) asserting infringement of
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`U.S. Patent Nos.
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`in addition to other causes of action. (Dkt.
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`No. 1). After discovery and subsequent case narrowing, the parties filed Daubert and dispositive
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`motions for consideration at the pre-trial conference. (See generally
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`As a part of the pre-trial conference, Bright Data asserted two damages models regarding
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`the cost of Oxylabs’s alleged infringement. (Id. at 136:11–20). First, Bright Data asserted that it
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`was entitled to recover lost profits from Oxylabs. (Id.). Alternatively, Bright Data asserted that it
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`was entitled to recover a reasonable royalty for Oxylabs’s infringement. (Id.). In support of such
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`damages, it was noted that Bright Data’s expert, Dr. Stephen Becker, opined that “a reasonable
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`royalty for [Oxylabs’s] use of the [Asserted Patents] is a per-
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`of traffic” on Oxylabs’s accused services. (Dkt. No. 236-1 at ¶
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` However, after hearing
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`argument on Oxylabs’s Motion to Strike Expert Opinions of Stephen L. Becker, Ph.D. (Dkt. No.
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`236) (the “Motion to Strike”), the Court found that certain portions of the reasonable royalty
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`analysis were not sufficiently tied to the statutory mandate of 35 U.S.C. §
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` because Dr. Becker
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`failed to apportion the value added by the Asserted Patents to Oxylabs’s accused services. (Dkt.
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`–
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`–167:9). As a result, the Court granted-in-part
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`Oxylabs’s Motion to Strike and struck
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`-
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`and SLB-
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` At no time during the initial pre-trial
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`conference held on August 31, 2021 or the final pre-trial conference held on October 29, 2021 did
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`Bright Data ask for (or even raise the possibility of) injunctive relief. (See generally
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`505).
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`The case proceeded to trial before a jury beginning on November 1, 2021. As a
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`consequence of the Court’s ruling on Oxylabs’s Motion to Strike, Bright Data elected to proceed
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`at trial only on its lost profits theory asserting
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`(Dkt. No. 529-
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` At the conclusion of the trial, the jury returned a verdict finding that
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`Oxylabs infringed at least one claim of the Asserted Patents, that none of the Asserted Patents were
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`invalid, and that Oxylabs’s infringement was willful. (Dkt. No. 516). The jury also awarded Bright
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`for such infringement. (Id.).
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`After trial and the return of the verdict, Bright Data then filed the instant Motion requesting:
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`(1) that the Court enter a preliminary injunction enjoining Oxylabs from offering its accused
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`services until the Court entered its Final Judgement, and (2) that the Court enter a permanent
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`injunction enjoining Oxylabs from “offering in the United States the Residential Proxies,
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`Residential ‘exit nodes,’ or Residential ‘Minions’ adjudged to have infringed the Asserted Patents”
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`in this case. (Dkt. No. 529-19 at 1). Following the trial, the Court ordered Bright Data and
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`Oxylabs—as well as other defendants in co-pending suits brought by Bright Data—to mediate
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`their disputes
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` On December 12, 2021, the Court stayed all deadlines in the
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`case—including briefing on the instant Motion—to allow the parties to focus their efforts on the
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`The parties were unable to resolve their disputes at the January 6th mediation, and the Court
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`lifted the stay as to the instant Motion for injunctive relief. (Dkt. No. 567 at 2). Briefing on the
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`Id.). At the hearing, the Court heard oral argument from both Bright Data
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`scheduled a hearing regarding the same
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`and Oxylabs addressing the Motion. (See generally
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`II.
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`LEGAL STANDARD
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`The Patent Act provides that in cases of patent infringement a Court “may grant injunctions
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`in accordance with the principles of equity to prevent the violation of any right secured by patent,
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`the
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`patentee must show: “(1) that it has suffered an irreparable injury; (2) that remedies available at
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`law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering
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`the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and
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`MercExchange, L.L.C.
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` The patentee must prove that it meets all four
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`eBay v.
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`equitable factors, and it must do so on the merits of its particular case. Nichia Corp. v. Everlight
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`Americas, Inc.
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`III.
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`DISCUSSION
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`“[T]he issues of irreparable harm and adequacy of remedies at law are inextricably
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`intertwined” and, as such, are often discussed together. 1 ActiveVideo Networks, Inc. v. Verizon
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`Comms. Inc.
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` Here, the briefing and the arguments at the
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`hearing before the Court often addressed these factors in unison. (See
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`see
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`also
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`together.
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`). Accordingly, the Court discusses these two factors
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`1. Irreparable Injury and Inadequacy of Remedies at Law
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`The parties do not dispute that they compete in the same Internet Protocol proxy network
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`(IPPN) marketplace. (Dkt. No. 529-
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`Dkt. No. 529-
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`–12; compare Dkt. No. 529 at 5,
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`with Dkt. No. 569 at 12). Bright Data argues that its injuries are irreparable because any loss of
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`market share, brand recognition, and goodwill are too difficult to calculate given Oxylabs’s status
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`–7) (citing Presidio Components, Inc. v. Am. Tech. Ceramics
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`Corp., 702 F.3d 1351, 13 (Fed. Cir. 2012); TEK Glob., S.R.L. v. Sealant Sys. Int’l, 920 F.3d 777,
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`793 (Fed. Cir. 2019) (noting that “head-to-head competition and lost market share tend to evidence
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`irreparable harm”)). Further, Bright Data asserts that the competition between the parties also
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`indicates that monetary damages are inadequate. (Id. at 11) (citing Retractable Techs. Inc. v.
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`Occupational & Med. Innovations, LTD
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`2010)). In light of Oxylabs’s statements that it continues offering its accused services, Bright Data
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`1 Such entwinement is intuitive—the ability to adequately measure a certain injury in terms of monetary damages
`undermines a conclusion that such harm is irreparable. See also Johnson & Johnson Vision Care, Inc. v. CIBA Vision
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`and the adequacy of monetary damages necessarily overlap.”) (citation omitted).
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`asserts than an injunction is the only adequate remedy to address its harm and that enforcing a
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`monetary judgment against a foreign Lithuanian defendant would be “difficult, if not impossible.”
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`(Id. at 1, 5–6, 12; Dkt. No. 529-
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`Oxylabs responds that Bright Data’s overly simple rationale would open the door to a
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`permanent injunction in every case involving competitors and return the Court to the “general rule
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`that courts [should] issue permanent injunctions against patent infringement absent exceptional
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`circumstances” previously rejected by the Supreme Court in eBay. (Dkt. No. 569 at 1). Oxylabs
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`argues that Bright Data has not met its burden to show irreparable injury or inadequacy of monetary
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`relief because Bright Data only points to harms that are commonly quantified in terms of monetary
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`damages—such as loss of market share, loss of sales, and lost profits. (Id. at 11–12) (citing
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`Novartis Pharms. Corp. v. Teva Pharms. USA, Inc.
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`2007) (“Both loss of market share and price erosion are economic harms that are compensable by
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`money damages.”), aff’d
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`Next, Oxylabs argues
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`that Bright Data’s own conduct—such as its purported willingness to license the Asserted Patents
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`across the industry2—establishes that licensing fees and other forms of monetary relief are
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`adequate compensation for any infringement of the Asserted Patents. (Id. at 9–10) (citing Nichia
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`Corp.
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`Johnson & Johnson, 712 F. Supp. at 1
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`–90). Finally, Oxylabs argues
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`that Bright Data has not proven any inability to successfully pursue and enforce a monetary
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`judgment against it in Lithuania—other than its unsupported assertion that because Oxylabs is
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`based in Lithuania monetary damages are difficult or impossible to collect. (Id. at 10–11).
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`2 See, e,g,, Dkt. No. 569- at 2 (“[Bright Data] is willing to discuss licensing of the above patents on reasonable
`terms.”), 3–
`reasonable terms. . . . “[Bright Data] is willing to discuss licensing of the above patents (regarding past and future
`products) on reasonable terms.”).
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`Having considered the parties’ arguments and weighing the various factors before it, the
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`Court finds that Bright Data has not met its burden to show irreparable harm or inadequacy of
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`monetary relief, particularly in light of its own representations. The Court agrees that Oxylabs’s
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`role as a competitor in the IPPN marketplace can counsel, under the proper circumstances, in favor
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`of finding irreparable harm. Presidio, 702 F.3d at 1363. This Court notes that it has previously
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`acknowledged the value of the statutory right to exclude, particularly in the context of a competitor
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`suit. Golden Hour Data Sys., Inc. v. emsCharts, Inc.
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`–11 (E.D. Tex.
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`, present in this case, weigh against Bright
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`Data’s reliance on Oxylabs’s status as a competitor and distinguish this case from Golden Hour.
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`First, the Court finds that Bright Data’s direct representations to third parties and its expert
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`damages report counsel against a finding of irreparable injury and inadequacy of future monetary
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`relief. Although Bright Data now claims that its harm is irreparable, its damages expert, Dr.
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`Stephen Becker, previously purported within his report to calculate the amount of monetary relief
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`adequate to compensate it for Oxylabs’s infringement. Specifically, Dr. Becker’s report notes that
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`the parties would agree to a running royalty in the context of a hypothetical negotiation. (Dkt. No.
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`236-1 at ¶ 170). Through the Becker report, Bright Data previously asserted that “a reasonably
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`royalty for [Oxylabs’s] use of the [Asserted Patents] is a per-
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`of traffic.” (Id. at
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`). Further, the Becker report notes that both the “lost profit and reasonable
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`royalty damages opinions quantify the financial harm to [Bright Data] that Defendants’
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`infringement has caused” and estimates an approximate reasonable royalty damage calculation
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`“were the infringement to continue unabated for the life of the patents.” (Id. at ¶ 197). In light of
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`Bright Data’s assertions through its retained expert that a running royalty and monetary relief could
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`fairly and fully compensate it for future infringement, the Court finds that Bright Data has not met
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`its burden to establish that remedies at law—i.e., monetary damages—are inadequate to
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`compensate it for Oxylabs’s infringement or that its harm is irreparable. 3
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`Next, the Court finds that Bright Data’s prior conduct related to licensing weighs against a
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`grant of injunctive relief. While the Court notes that “[a] plaintiff’s past willingness to license its
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`patent is not sufficient per se to establish lack of irreparable harm if a new infringer were licensed,”
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`a patentee’s past conduct regarding licensing can weigh against a finding of irreparable harm.
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`Acumed LLC v. Stryker Corp.
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`); see Nichia Corp.
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`injunctive relief. See Edwards Lifesciences AG v. CoreValve, Inc., 699 F.3d 1305, 1315 (Fed. Cir.
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`2012). Here, the Court finds that Bright Data’s past licensing practices weigh against granting a
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`may counsel against a grant of permanent
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`permanent injunction on both grounds.
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`Bright Data has initiated discussions about licensing its technology to an extensive swathe
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`of other entities engaged in the IPPN industry. (See generally Dkt. No. 569-
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`include “discussing licensing” of its patents and “other pending patent applications” with
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`Oxylabs’s predecessor entities. (Id. at 2). Beyond mere discussions, Bright Data’s own notice letter
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`states that Bright Data previously “offered a license on reasonable terms” to Oxylabs. (Id. at 3; see
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`also PTX-0009). Bright Data further disseminated letters to other entities in the IPPN field—such
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`as MicroLeaves, StormProxies, GeoSurf, Privatix.io, FoxyProxy, Penguin Proxy, and IP
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`Ninja—seeking to “discuss[] licensing of [its] patents (regarding past and future products) on
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`3 The Court further finds that—had certain portions of Dr. Becker’s reasonable royalty opinion survived the scrutiny
`of Daubert practice—Bright Data would have likely sought a running royalty for Oxylabs’s infringement at trial. Even
`after paragraphs
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`maintain its reasonable royalty model and asserted that it was “entitled to make a case for [a] reasonable royalty” at
`trial based on the remaining opinions in Dr. Becker’s report—which included the ultimate opinion that a per-unit
`Compare Dkt. No. 505 at 30:23–31:17, with Dkt. No. 236-1
` Noting that Bright Data was responsible for formulating its reasonable royalty model, the Court finds it
`improper to now allow a plaintiff to pivot to post-verdict injunctive relief and away from the earlier strategic choice
`to pursue monetary damages in the form of lost profits and/or a running royalty.
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`reasonable terms.” (Dkt. No. 569-
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`–15) (emphasis added). Bright Data’s voluntary efforts
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`to engage licensees indicates that it believes its injury can be fairly remedied through monetary
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`relief in the form of a reasonable royalty or other monetary payments under a license. Accordingly,
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`Bright Data’s own paper trail weighs against its later representations that it “did not want to license
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`its technology” and against a finding of irreparable harm and inadequacy of monetary relief. (See
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`–6).
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`Under the particular facts of this case, granting an injunction would run directly counter to
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`Bright Data’s pre-trial position on licensing. In fact, Bright Data relied on its notice letters
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`discussed above (and its offers of a license) to help secure a finding of willful infringement from
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`the jury. (See
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`; Trial Tr. (11/3/21)
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`at 109:11–
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` While Bright Data used such letters at trial seeking a willful infringement
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`finding (and the possibility of enhanced damages), Bright Data now argues post-trial that it “did
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`not want to license its patents” to Oxylabs and always intended to maintain exclusivity in the
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`market. (
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`–10). Bright Data used its willingness to license as a sword at trial,
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`but now seeks to use as a shield its post-trial claims of unwillingness to license—as part of its
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`efforts to now obtain injunctive relief. The Court is persuaded that it should hold Bright Data to
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`its original position on licensing and finds those positions inconsistent with a late-breaking grasp
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`for injunctive relief. (Dkt. No. 569-
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` PTX-0009).
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`Finally, the Court notes that the facts and circumstances of this case materially differ from
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`those in Golden Hour, where this Court granted injunctive relief. Notably, the defendant in Golden
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`Hour was involved in a co-pending bankruptcy proceeding and expressly stated that an on-going
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`royalty rate would “ris
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`Court in Golden Hour had “serious doubts about [the defendant’s] ability to fulfill” a monetary
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`obligation compensating the plaintiff for infringement. This Court specifically noted that “an
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`infringer’s inability to pay a judgment … may demonstrate the inadequacy of damage[s].” Id.
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`(quoting Apple Inc. v. Samsung Elecs. Co., Ltd., 735 F.3d 1352, 1369 (Fed. Cir. 2013)). Here, the
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`Court has no such doubts regarding Oxylabs’s ability to satisfy a monetary judgment in Bright
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`Data’s favor. In fact, Bright Data acknowledged that “[it’s] not putting Oxylabs out of business
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`here” given that Oxylabs provides other non-infringing revenue-generating services like static IP
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`and data center proxies. (See Trial Tr. (11/5/21) at 103:10–11). Further, Bright Data’s own conduct
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`regarding licensing separates its conduct from that of the Golden Hour plaintiff’s, which “never
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`licensed [its patent] to anyone.”
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`whole, the Court finds that Bright Data has not met its burden to show irreparable injury or
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`inadequacy of monetary damages to justify the grant of a preliminary or permanent injunction.
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`2. Other Factors
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`As noted above, the patentee bears the burden to prove that it meets all four equitable
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`factors. Nichia Corp.
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`at
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`. Having found that Bright Data has not met its burden as
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`to the first two factors, the Court finds no utility in weighing the remaining two eBay factors.
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`IV.
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`CONCLUSION
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`For the reasons stated above, the Court finds that Bright Data has not met its burden to
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`show that it has suffered an irreparable injury or to establish “how money damages could not
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`adequately compensate [it] for ‘lost market share’” and other economic damages. Praxair, Inc. v.
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`ATMI, Inc.
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`DENIED.
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`So ORDEREDand SIGNEDthis 10th day of February, 2022.
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` RODNEY GILSTRAP
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`UNITED STATES
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`DISTRICT JUDGE
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`Code200, UAB,et al. v. Bright Data Ltd.
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