Oxylabs Retaliates Against Bright Data by Alleging Patent Infringement

Image credit: Nick Youngson CC BY-SA 3.0 Pix4free

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Continuing proxy industry wars change course as Oxylabs goes on the offensive in the most recent development

As the somewhat young proxy and data collection industry awaits widespread regulation and legal guidance, its competitors are attempting to pave the way for orderly conduct. Oxylabs’ newest patent infringement lawsuit is the latest development in the ongoing disputes between the two competitors since 2018.

Usually, however, Bright Data (formerly known as Luminati Networks Ltd.) have been on the offensive. They had previously opened three cases with various claims, mostly concerning patent infringement, with so far only one ending in a favorable jury verdict for Bright Data, albeit only for monetary damages. Oxylabs are still waiting for the Court’s decision affirming or rejecting the jury verdict, and in case of an unsatisfactory result intends to appeal the decision.

In the current case, filed in January 2022, Oxylabs allege that Bright Data have also infringed upon patents held by the former company. According to the filings, Oxylabs’ competitor has illegitimately used patented Smart Proxy Rotator and web script management technologies for their own gain.

Troubled legal waters

These latest developments could be considered a continuation of the events that transpired in 2018. Bright Data had then initiated a patent infringement case against Oxylabs, alleging that the “residential proxy service” and a now-defunct product Real-Time Crawler were making use of Bright Data’s patented technologies.

Over the course of three years, Bright Data filed two more complaints against its competitor, throwing nearly all offered services under the shade of patent infringement. One of the complaints has been resolved by the settlement agreement and accordingly dismissed with prejudice.

Oxylabs had reacted to these allegations by filing counterclaims on antitrust and attempts to mislead the market. According to the company, these were attempts to stifle competition through exorbitant legal fees and threats. Oxylabs has also initiated a stand-alone unfair competition, false advertising, false patent marketing lawsuit. Both Oxylabs’ counterclaims and the said stand-alone lawsuit were resolved by parties’ agreement in 2021.

The remaining two cases, originally filed by Bright Data, are at a standstill. One of them resulted in the initial findings of the jury that certain Bright Data’s patents’ claims had been infringed, the initial ruling ordering repayment of monetary damages. It seems, however, that the said case has been put on hold in relation to the parties’ attempts to resolve their differences through mediation.

In a press release sent out on the 7th of January, Julius Cerniauskas, the Chief Executive Officer of Oxylabs.io commented:

“Oxylabs is committed to principles of ethics and fairness in the proxy marketplace. That includes respecting valid intellectual property rights. With this lawsuit, we have made it known to Bright Data that it must respect Oxylabs’ existing and growing patent portfolio. We believe that Bright Data’s unfair business practices stifle innovation and competition, leading to potential market monopolization.”

Bright Data has yet to release any statement in regard to the matter.

No end in sight

There seems to be no expectation that these disputes will be resolved quickly. Neither company is willing to concede ground to the other, both attempting to maintain the supremacy of their patents.

While Bright Data and Oxylabs have the lion’s share of the market, the industry is rife with smaller players such as Smartproxy, Storm Proxies, NetNut, and several others. Incidentally, Bright Data has initiated legal proceedings against some of the smaller competitors as well.

Even with the proxy wars continuing to rage, the services themselves have been rising in popularity. Businesses, primarily, are using them for automated data collection, cybersecurity, and internet monitoring purposes, allowing proxies to become a staple in daily operations.

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