Judge orders mediation after jury orders Oxylabs to pay $7.5m in latest episode of proxy wars

(Image credit: Shutterstock)

After a Texas jury delivered a verdict awarding nearly $7.5 million against Oxylabs for patent infringement against Bright Data, another judge has nowordered the two parties to undergo mediation to resolve their disputes. 

A court order mentions that “the parties might benefit from an effort to resolve their disputes via mediation” and will have 45 days to abide by the judgement.

The case was brought by Bright Data (formerly Luminati) alleging that Tesonet violated Bright Data’s patents by providing a “residential proxy service” to route internet traffic through devices of millions of residential or mobile users worldwide since July 2018. A legal timeline of the case can be found on Oxylabs’s website.

Data trust

At the time of the first verdict, Bright Data said that it was pleased with the verdict, which found that Oxylabs' infringement was willful. "This is a welcome and deserved outcome for us and the whole community," explained Or Lenchner, CEO, Bright Data. "To trust the web data you receive, you first need to trust the data collection partners you rely on”.

Oxylabs issued a separate statement highlighting the fact that “the jury's decision relates to a claim for monetary damages only. Therefore, Oxylabs can continue providing the accused services as per usual.”

Julius Černiauskas, CEO of Oxylabs, commented: "It would be an understatement to say that we were disappointed with the decision. While we disagree with it and will appeal to the higher court, we thank the jury for their effort and time over the course of the case. Our company has always put forth the importance of ethics, positive restraint, and regulation. Oxylabs is still committed to these beliefs and we will continue our pursuit for justice."

Proxy wars

While the lawsuit names Lithuania-based Teso LT, UAB as a defendant rather than “Tesonet”, this is as a result of a corporate restructuring several years ago. Aside from its link to Oxylabs, Tesonet also advertises itself as a creator and investor of a number of online services, including NordVPN, Hostinger and others.

In an interview with TechRadar Pro, Tom Okman, the co-founder of both Tesonet and Nord Security, answered some questions regarding the relationship between Tesonet, NordVPN, and the plethora of associated online services the companies offer.

Interestingly, Luminati was also the owner of Hola VPN, which was caught in a scandal back in 2015. Back then, the company vowed to change its ways, and its CEO (and founder of Bright Data), Ofer Vilenski, promised to stop selling Hola users’ idle bandwidth, even as it continued to operate its residential proxy service.

Other than Oxylabs and Bright Data, there’s a handful of additional companies that account for most of the market: Netnut, Squidproxies, Storm Proxies, IPRoyal and Smart Proxy

Proxies can be used for a wide range of purposes like data scraping, website testing, brand protection and ad verification. But they can also use nefarious means to operate their businesses, to the extent that they are reselling unknowing internet users’ bandwidth. 

Desire Athow
Managing Editor, TechRadar Pro

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website builders and web hosting when DHTML and frames were in vogue and started narrating about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium.