Ooyala, Inc. v. Dominguez

CourtDistrict Court, D. Massachusetts
DecidedJuly 10, 2018
Docket1:17-cv-10943
StatusUnknown

This text of Ooyala, Inc. v. Dominguez (Ooyala, Inc. v. Dominguez) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ooyala, Inc. v. Dominguez, (D. Mass. 2018).

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

CIVIL ACTION NO. 17-10943-GAO

OOYALA, INC., and OOYALA MEXICO, S. DE R.L. DE C.V., Plaintiffs,

v.

RAUL FRANCISCO GARCIA DOMINGUEZ, DARIO PEREZ REAL, and BRIGHTCOVE, INC., Defendants.

OPINION AND ORDER July 10, 2018

O’TOOLE, D.J. The plaintiffs, Ooyala, Inc., and Ooyala Mexico, S. de R.L. de C.V. (collectively “Ooyala”), bring state and federal causes of action against the defendant, Brightcove, Inc. (“Brightcove”), and two of its now-former employees, alleging that Brightcove misappropriated Ooyala’s trade secret business information and used that information improperly to solicit existing and prospective Ooyala customers.1 Ooyala has moved for a preliminary injunction to enjoin Brightcove from communicating with customers whose information was stolen and from otherwise using, disclosing, or retaining that information.2

1 The amended complaint includes claims for federal and state trade secret misappropriation, 18 U.S.C. § 1836; Mass. Gen. Laws ch. 93, § 42, unfair or deceptive trade practices, Mass. Gen. Laws ch. 93, § 11, and common law tortious interference. 2 Though Ooyala originally sought an injunction based on all its legal claims, the parties have focused their arguments on the Massachusetts statutory claim for trade secret misappropriation. This Court will do the same. I. Legal Standard In determining whether a party is entitled to a preliminary injunction, courts consider (1) the movant’s likelihood of success on the merits of its claim; (2) the extent to which the movant will suffer irreparable harm if an injunction is not granted; (3) the balance of hardships as between

the parties; and (4) the effect, if any, that an injunction (or the withholding of one) may have on the public interest. Corp. Techs., Inc. v. Harnett, 731 F.3d 6, 9 (1st Cir. 2013) (citing Ross–Simons of Warwick, Inc. v. Baccarat, Inc., 102 F.3d 12, 15 (1st Cir. 1996)). The first of these factors, the movant’s likelihood of success, is the “touchstone” of the inquiry. Philip Morris, Inc. v. Harshbarger, 159 F.3d 670, 674 (1st Cir. 1998). “[I]f the moving party cannot demonstrate that he is likely to succeed in his quest, the remaining factors become matters of idle curiosity.” New Comm Wireless Servs., Inc. v. SprintCom, Inc., 287 F.3d 1, 9 (1st Cir. 2002) (citation omitted). Ooyala, as the moving party, has the burden of providing a sufficient factual basis to justify a preliminary injunction. Nieves–Márquez v. Puerto Rico, 353 F.3d 108, 120 (1st Cir. 2003). Because the parties have submitted adequate documentary evidence and the basic facts about

underlying events are not in dispute, an evidentiary hearing is not necessary, and the Court may accept as true well-pleaded allegations in the complaint and uncontroverted affidavits filed in support of the motion for a preliminary injunction. Elrod v. Burns, 427 U.S. 347, 350 n. 1 (1976); Campbell Soup Co. v. Giles, 47 F.3d 467, 470–71 (1st Cir. 1995); Avaya, Inc. v. Ali, No. CIV.A. 12-10660-DJC, 2012 WL 2888474, at *1 (D. Mass. July 13, 2012). II. Factual Background A. The Parties Ooyala is a California-based technology company that markets cloud-based video platform services and products which allow its customers to curate, publish, monetize, measure and analyze video content on a variety of electronic devices. Brightcove, a Massachusetts company, is the leading provider of such cloud-based video services and Ooyala’s biggest competitor. Both companies do significant international business and compete for the same customer base, which generally consists of large media and/or broadcasting companies. Relevant to this case are the

companies’ respective business dealings in Latin America prior to 2017, when the alleged misappropriation at issue took place. Internet use in Latin America is growing, with an estimated 375 million internet users and internet penetration that exceeds the global average by more than ten percent.3 The typical sales cycle for these cloud-based services is longer in Latin America than in other regions, including the United States, averaging approximately nine months between first contact with a potential customer and final sale. This cycle entails a long process of meetings and client development in order to identify each client’s business model, service needs, and key decision makers, which is then followed by client pitches, product demonstrations, and contract negotiations. The considerable expenditure of time and resources devoted to each sale makes customer-specific

information particularly valuable to businesses in the region. Ooyala derives more than half its business from international clients, including a now- significant customer base in Latin America. Over the past decade, Ooyala has expended substantial resources toward understanding the delivery methods, content preferences, and service needs of the regional markets, and has developed various genres of proprietary business information, including current and prospective customer lists and contact information, client-specific needs and pitches, sales/marketing plans and materials, and contract pricing methods, among others. Ooyala accordingly protects this proprietary information through confidentiality agreements, an updated

3 Internet penetration measures the prevalence of internet use in a given population. internal security policy, password-protected internet environments that are monitored by an information security team, two-fact authentication for email and shared document access, and annual third-party security audits. Access to this information is provided on a need-to-know basis. Brightcove serves approximately four thousand customers in seventy countries. But there

is no evidence in the record to suggest that Brightcove had a significant presence in Latin America prior to 2017, when it announced plans to expand into the region through the establishment of a new office in Mexico. Raul Francisco Garcia Dominguez (“Garcia”) and Dario Perez Real (“Perez”) were employees of Ooyala’s Latin America division, working out of its offices in Mexico, for several years before leaving Ooyala to join Brightcove as part of its Latin America expansion team.4 Between October 2012 and April 2016, Garcia served as Ooyala’s Regional Vice President for Latin America, and was responsible for growing, maintaining, and overseeing Ooyala’s client relationships throughout the region. Perez, who reported directly to Garcia, served as the business development manager in Ooyala’s Latin America division from November of 2014 until February

of 2017.

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