United States District Court, D. New Jersey, Camden Vicinage
PIZZI O'REILLY FALANGA LLP By: Liza M. Walsh, Esq. Hector
D. Ruiz, Esq. Eleonore Ofosu-Antwi, Esq. And KIRKLAND &
ELLIS LLP By: Adam R. Alper, Esq. Brandon H. Brown, Esq. Reza
Dokhanchy, Esq. Michael W. DeVries, Esq. Patricia Carson,
Esq. Leslie M. Schmidt, Esq. Gianni Cutri, Esq. Kristina
Hendricks, Esq. Joel R. Merkin, Esq. Counsel for Plaintiff
McCARTER & ENGLISH, LLP By: Scott S. Christie, Esq.
Matthew A. Sklar, Esq. Four Gateway Center Lee Carl Bromberg,
Esq. Thomas R. Fulford, Esq. and GIBSON DUNN & CRUTCHER
LLP By: Mark A. Perry, Esq. Counsel for Defendants
RENÉE MARIE BUMB UNITED STATES DISTRICT JUDGE.
three weeks ago, a jury found that Defendants Xactware
Solutions, Inc. and Verisk Analytics, Inc.
(“Defendants”) willfully infringed six of Eagle
View's patents. The jury awarded lost profits damages of
$125 million to Eagle View. On September 26, 2019, this Court
entered a temporary restraining order (“TRO”)
enjoining Defendants from, among other things, selling or
offering to sell their Property Insight, Roof Insight, Geomni
Roof and Geomni Property products [Docket No. 800] that are
produced by computer software programs which the jury found
infringed Eagle View's patents. Shortly thereafter, Eagle
View filed the instant Motion for a Permanent Injunction. The
Court held a hearing on the motion on October 8, 2019.
Immediately following the hearing, the Court extended the TRO
to October 18, 2019 to allow Defendants to present their
equitable estoppel defense at an evidentiary hearing to be
held on October 18th. A few days later, however,
Defendants notified the Court that they wished to withdraw
their equitable estoppel defense [Docket No. 835], and the
parties agreed that there was no longer a need for a hearing
on that issue. Thus, all that remains for immediate
adjudication is Eagle View's Motion for Permanent
Injunction. For the reasons stated herein, the motion will
be granted, in part, and denied, in part.
View defines itself as a data analytics company, with the
“data” being derived from aerial imagery of
roofs. [Trial Transcript, p. 705:24-706:1 (“A: . . .
Eagle View is in the business of capturing aerial imagery and
then extracting roof measurements from the imagery.”).
Eagle View's patented processes are applied to that data,
and then a roof report is generated. This is Eagle View's
“cornerstone product.” [Daga Sept. 26, 2019 Decl.
¶ 4] In contrast to Eagle View, less than half of one
percent of Defendants' revenue results from the
generation of roof reports. [PTX-138; PTX- 940; Dkt. No.
791-1, Exs. B-E] It is Defendants' generation of their
roof reports from their software programs that the jury found
to be infringing.
Defendants' willful infringement of Eagle View's
patents aside, ironically, Defendants provide some business
value to Eagle View. Through the parties' contractual
relationship, Defendants run approximately 25% of Eagle
View's roof reports through its Xactimate cost-estimator
platform. [Trial Transcript, 1506:17-25 (West Testimony)]
That is, in addition to the generation of a roof report, a
cost estimate to repair or replace the roof per the
measurements of that roof report is also prepared through
Defendants' platform. [Trial Transcript, p. 2175:7-15
(Webecke Testimony)] This contractual relationship runs
through December, 2020. Suffice it to say it is indeed a
paradoxical set of facts: the parties in this hotly contested
litigation before the Court are business partners outside the
courtroom, at least until the end of next year.
developed record of the parties' relationship convinces
this Court that the effects of a denial of injunctive relief
to protect the patents at issue is far more consequential to
Eagle View, a company whose essential existence relies upon
the income generated as a result of the patented software,
than to Defendants, who are far more diversified. [See
infra at Section III., D.] As Eagle View's CEO,
Rishi Daga, explained at trial, Eagle View's patents are
critically important to its business. To Eagle View, having
patent protection means
small companies like [Eagle View] . . . spen[d] a lot of
time, energy, money . . . and do research and development,
create new technology, and then file a patent . . . so then
[it] can go and build a business and grow a business. And if
[those patents are not enforced] then any big company can
come steal your idea and crush you.
[Trial Transcript, p. 800:17-801:1] The CEO's fears were
born out by the trial evidence: in September, 2015,
Defendants announced in their formal, written business
strategy that they viewed Eagle View as a
“threat” [PTX-530.0023], and so they set out to
“aggressively” erode Eagle View's market
share and undercut Eagle View's prices. [PTX-530.0001]
Indeed, within three years of the 2015 Five Year Business
Strategy, Defendants had successfully eroded Eagle View's
market share by as much as 20% [Trial Transcript, p.
1511:2-10] and undercut Eagle View's prices by as much as
50%. [Trial Transcript, p. 1504:17-18] In short, the record
evidence supports a finding that Defendants deliberately set
out to, and did cause, irreparable harm to Eagle View.
Further, as explained below, Defendants have provided the
Court little assurance that, going forward, Defendants will
not continue their aggressive business strategy of what the
jury has found to be willful infringement and unfair
competition. Unless an injunction issues, there remains, in
this Court's mind, a possibility that Eagle View could be
pushed out of business altogether. It is a risk this Court is
not willing to take.
Patent Act provides that injunctions “may” issue
“in accordance with the principles of equity.” 35
U.S.C. § 283. “To obtain a permanent injunction,
‘[a] plaintiff must demonstrate: (1) that it has
suffered an irreparable injury; (2) that remedies available
at law, such as monetary damages, are inadequate to
compensate for that injury; (3) that, considering the balance
of hardships between the plaintiff and defendant, a remedy in
equity is warranted; and (4) that the public interest would
not be disserved by a permanent injunction.'”
TEK Glob., S.R.L. v. Sealant Sys. Int'l, Inc.,
920 F.3d 777, 792 (Fed. Cir. 2019) (quoting eBay, Inc. v.
MercExchange, L.L.C., 547 U.S. 388, 391 (2006)). A
patentee must establish each of these eBay factors
for an injunction to issue. Amgen, Inc. v. Sanofi,
872 F.3d 1367, 1381 (Fed. Cir. 2017).
prove irreparable injury, a patentee must show (1) that
absent an injunction, it will suffer irreparable harm, and
(2) that a sufficiently strong casual nexus” connects
the alleged irreparable harm “to the 
infringement.” Presidio Components, Inc. v. Am.
Tech. Ceramics Corp., 875 F.3d 1369, 1383 (Fed. Cir.
2017). “To determine whether the patentee
will suffer irreparable harm absent an injunction, the court
may consider factors such as the nature of competition
between the patentee and the infringer, the willingness of a
patentee to license, and any lost sales the patentee has
proven.” Id. The court may also consider the
harm to the patentee's reputation in the market. See
Douglas Dynamics, LLC v. Buyers Prod. Co., 717 F.3d
1336, 1344 (Fed. Cir. 2013) (“Irreparable injury
encompasses different types of losses that are often
difficult to quantify, including lost sales and erosion in
reputation and brand distinction.”). The record before
this Court amply supports a finding of each of these factors.
Competition between the parties
trial evidence establishes that the market for roof reports
is essentially a two-player market consisting of Eagle View
and Defendants. Both are each other's direct competitors.
[Trial Transcript, p. 792:22-794:12 (Daga Testimony,
“Q: . . . [D]oes Eagle View have any effective
competitors other than the defendants? A: No.”), p.
1491:2-3 (West Testimony, “Q: Are there any other [roof
report] alternatives [other than Defendants and Eagle View]
in the marketplace? A: No, there are not.”), p.
1511:2-10 (“Q: . . . what is EagleView's market
share[?] A: I would say somewhere between 80 and 90 percent.
. . . Who has the other 10 to 20 percent? A: The
defendants.”)] With respect to the insurance carrier
portion of the market, Defendants' own witness,
Xactware's President, Mike Fulton, testified that Eagle
View is Defendants' only “significant or
relevant” competitor. [PTX-961, Deposition Transcript
at 251:7-17] Indeed, in opposition to the instant motion,
Defendants concede that the insurance carrier portion of the
market is a two-player market, arguing that only the
construction contractor portion of the market is not a
two-player market. [Dkt. No. 825, Opposition Brief, p.
6]However, the evidence does not support a
finding, by a preponderance of the evidence, that there are
other significant or relevant competitors to Defendants and
Eagle View in the construction contractor portion of the
market. Defendants' evidence in this regard is vague and
undeveloped. Defendants' expert, Philip Green, in his
declaration filed in opposition to the instant
motion, merely identifies three
“SkyMeasure”, and Home Depot-- which he asserts,
in conclusory fashion, “offer reports that are based on
imaging such as that used by Eagle View and Xactware.”
[Dkt. No. 825-2, Green Decl. ¶ 18] This evidence is
insufficient because Defendants provide no evidence that any
of the three vendors are bona fide competitors to
Eagle View and Defendants. Even if this Court were to
assume-- which it does not--that the reports
“offered” by these companies are comparable to
Eagle View's roof reports in terms of similarity and
accuracy, nothing in the record provides any
information concerning how many reports these alleged
competitors actually sell or have sold. In the absence of
such evidence-- and in light of Eagle View's evidence to
the contrary-- the Court concludes that these
companies' presence in the roof report market is de
minimus, and therefore Defendants' proffered
evidence does not alter this Court's finding that the
entire market for roof reports (the insurer and construction
contractor portions combined) functions as a two-player
market for purposes of assessing irreparable harm.
some of the strongest evidence of the present competitive
landscape is what has happened since this Court entered its
temporary restraining order: rather than turning to some
third, non-infringing provider of roof measurements,
Defendants' roof report customers-- insurers and
construction contractors alike-- have returned to Eagle View.
[Daga Oct. 1, 2019 Decl., Docket No. 817-2, ¶¶
5-10] As counsel for Eagle View correctly observed at the
permanent injunction hearing, Defendants have not provided
any evidence of even a single customer choosing an option
that was not Defendants or Eagle View. [Oct. 8, 2019 Hearing
Transcript, p. 11, 14, 77] Thus, Defendants' gain is
Eagle View's loss, and vice versa.
Cf. Presidio Components, 875 F.3d at 1384
(“Since March 17, 2017, the injunction against [the
infringer] from selling [the infringing product] has been in
effect. Based on the evidence presented to this Court, it
appears that, fortuitously, this injunction may have created
the hypothetical market necessary to determine whether
consumers would purchase [the patent holder's product] in
the absence of [the infringer's product]. On remand, the
district court should consider whether consumers have turned
to noninfringing alternatives to the [patent holder's
product] . . . after the [the infringing product] became
unavailable or whether [the patent holder's] sales of the
[patented product] have increased because the [infringing
product] is no longer on the market.”).
Eagle View's lost sales and lost market share to
View has also proven that it has lost highly valuable
customers to Defendants because of Defendants' ability to
undercut Eagle View's price. [Trial Transcript p.
1504:17-18 (West Testimony) (“we consistently see the
defendants' products in the market at 30 to 50 percent
below Eagle View's pricing.”)] Indeed, the trial
evidence demonstrated that Defendants intended to
aggressively compete, head-to-head, with Eagle View with the
express goal of luring away Eagle View's customers and
decreasing Eagle View's market share. As mentioned, in
September 2015, Defendants created a “Five Year
[Business] Strategy” which set forth “how”
Defendants planned to “aggressively grow [their roof
report] market share”: “[t]here is nothing more
important at this time that [sic] to support and sell Roof
InSight to U.S. markets and beyond where possible. . . .
[Eagle View] is very active in the market . . . . We need to
erode their market share by selling Roof InSight right
now[.]” [PTX-530.0001, p. 14, 21-22] Defendants
specifically identified insurance customers State Farm and
Nationwide as business Defendants sought to “take,
” from Eagle View thereby “hav[ing] [a]
significant impact on the competition.” [Id.
at p. 14-15] Defendants also planned to “be aggressive
on price.” [Id. at p. 23]
trial evidence further supports a finding that Defendants
were successful in achieving their acquisitive goals.
Nationwide did, in fact, switch to Defendants, as did
MetLife, USAA, Travelers, and Country Financial, among
others. [Trial Transcript, p. 797:18-798:2 (Daga Testimony),
p. 1483:23-1485:24 (West Testimony); Daga Oct. 1, 2019 Decl.
¶ 7]. Why these customers did so is clear: Defendants
were offering their roof reports “at a significantly
lower price.” [Trial Transcript, p. 1485:6-9,
1488:19-25 (West Testimony)]
although Eagle View did not completely lose all of its
customers to Defendants, Eagle View was nonetheless forced to
lower the prices it offered to both its insurance and
construction customers in order to compete with Defendants.
[Trial Transcript, p. 1489-96, 1503-04 (West Testimony);
effects of Defendants' aggressive competition strategy
persist, post-verdict, to today. Mr. Daga states that at
least one of Eagle View's customers is delaying
negotiations on a contract renewal with Eagle View so that
the customer may potentially take advantage of a lower price
offered by Defendants. [Daga Sept. 26, 2019 Decl. ¶ 5-6]
mountain of evidence notwithstanding, Defendants erroneously
assert that Eagle View's market share has remained
constant over the relevant time period, and therefore assert
that Eagle View has not proven that it has lost market share
to Defendants. This argument is not supported by the
evidence. Defendants' own document, the “Five Year
Strategy”, illustrates that between 2013 and 2015,
Defendants “command[ed] a ~10% market share vs. [Eagle
View] for roof reports” in the U.S. insurance carrier
market. [PTX-530.0001, p. 21-22] Similarly, the evidence
shows that Eagle View's overall market share (insurance
customers and construction contractors combined) did not
remain steady at 90%, as Defendants assert. Rather, Eagle
View's market share has dipped as low as 80%. [Trial
Transcript, p. 1511:2-10 (West Testimony)]
Eagle View's unwillingness to license its
undisputed that Eagle View has not licensed the patents at
issue. This factor also weighs in favor of a finding of
irreparable harm. See Presidio Components, 702 F.3d
at 1363 (“The district court correctly found [the
patent holder's] unwillingness to license favored finding
irreparable injury.”). That Defendants' opposition
to Eagle View's Motion completely ignores this fact is
evidence also demonstrates that Eagle View's roof reports
have lost some of their “distinctiveness and market
lure” as a result of Defendants' infringement.
Douglas Dynamics, 717 F.3d at 1344. The confusion
and uncertainty in the market created by Defendants'
infringement has negatively impacted Eagle View's
relationships and business negotiations with its customers.
[Dkt. No. 792-1, Sept. 22, 2019 Daga Decl. ¶¶ ...