L1 Technologies, Inc. v. Chekanov

Opinion

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10 UNITED STATES DISTRICT COURT 11 SOUTHERN DISTRICT OF CALIFORNIA 12

13 L1 TECHNOLOGIES, INC.; Case No.: 3:20-cv-00259-H-JLB 14 SYNCWISE, LLC; and PIXELS 15 MATTER, LLC, PERMANENT INJUNCTION 16 Plaintiffs, 17 v. 18 SERHII CHEKANOV, 19 Defendant. 20 21 On August 30, 2023, the Court issued a Memorandum Decision in favor of Plaintiffs 22 L1 Technologies, Inc., Syncwise, LLC, and Pixels Matter, LLC (“Plaintiffs”) and against 23 Defendant Serhii Chekanov (“Defendant”). (Doc. No. 89.) That same day, the Court 24 issued a judgment based on the Memorandum Decision indicating that the Court will issue 25 a permanent injunction to protect Plaintiffs from future harm. (Doc. No. 90.) Accordingly, 26 the Court incorporates the findings in the Memorandum Decision in support of this 27 permanent injunction. 28 1 PERMANENT INJUNCTION 2 A. Permanent Injunction 3 In the Ninth Circuit, a plaintiff who seeks a permanent injunction must satisfy a four- 4 factor test. See Kurin, Inc. v. Magnolia Med. Techs., Inc., 473 F. Supp. 3d 1117, 1141 5 (S.D. Cal. 2020) (citing eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006)). 6 A plaintiff must show: 7 “(1) [t]hat it has suffered an irreparable injury; (2) that remedies available at 8 law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and 9 defendant, a remedy in equity is warranted; and (4) that the public interest 10 would not be disserved by a permanent injunction.” 11 eBay Inc., 547 U.S. at 391. “The decision to grant or deny permanent injunctive relief is 12 an act of equitable discretion by the district court.” Id. (citing Weinberger v. Romero- 13 Barcelo, 456 U.S. 305, 320 (1982)). 14 Here, the evidence at trial established that Defendant took Plaintiffs’ confidential 15 intellectual property and used it to create a competitor company. Defendant then reached 16 out to Plaintiffs’ customers and offered Plaintiffs’ products at a reduced price. 17 Additionally, Plaintiffs’ presented evidence showing that Defendant made multiple false 18 statements about Plaintiffs over an extended period of time to the IRS and on social media 19 platforms. Based on Defendant’s actions, the evidence at trial further established that 20 Plaintiffs’ reputation with their customers had been harmed. Accordingly, Plaintiffs have 21 shown that they suffered an irreparable injury. See Optinrealbig.com, LLC v. Ironport 22 Sys., Inc., 323 F.Supp.2d 1037, 1050 (N.D. Cal. 2004) (“Damage to a business’ goodwill 23 is typically an irreparable injury because it is difficult to calculate”). 24 Plaintiffs have also established that remedies available at law are inadequate to 25 compensate for their injury. Money damages will not prevent Defendant from taking steps 26 again in the future to solicit Plaintiffs’ customers with Plaintiffs’ confidential intellectual 27 property. Money damages will also not prevent Defendant from making additional false 28 statements about Plaintiffs over the internet and to governmental agencies. Further, money 1 damages alone will not compensate Plaintiffs for the loss of reputation Plaintiffs suffered 2 due to Defendant’s solicitations and postings. Thus, Plaintiffs have shown that remedies 3 available at law are inadequate. See, e.g., Facebook. Inc. v. Power Ventures, Inc., 2013 4 WL 5372341, at *15 (N.D. Cal. Sept. 25, 2013); Pyro Spectaculars North Inc. v. Souza, 861 5 F.Supp.2d 1079, 1092 (E.D. Cal. 2012) (granting injunction in part because defendant still 6 possessed plaintiff’s data). 7 Next, Plaintiffs have shown that, considering the balance of hardships, injunctive 8 relief is warranted. Plaintiffs have suffered irreparable harm from Defendant’s defamatory 9 statements, Defendant’s conversion of Plaintiffs’ intellectual property, and Defendant’s 10 solicitation of Plaintiffs’ customers using Plaintiffs’ stolen intellectual property. 11 Specifically, any injunction is focused on preventing Defendant from unlawfully using 12 Plaintiffs’ intellectual property to solicit Plaintiffs’ customers and from posting similar 13 false statements about Plaintiffs. Defendant, on the other hand, would suffer little hardship 14 if enjoined from committing future unlawful actions. Accordingly, Plaintiffs have shown 15 that the balance of hardships is in their favor. See Pyro Spectaculars, 861 F.Supp.2d at 16 1092 (granting an injunction because it “would not cause any significant hardship to 17 defendant, because it would essentially only require him to abide by existing law regarding 18 the unauthorized use of another’s [property]”). 19 The public interest factor supports an injunction as well. Injunctive relief serves the 20 public interest because California has a strong policy in favor of protecting a company’s 21 confidential intellectual property. See Morlife, Inc. v. Perry, 56 Cal. App. 4th 1514, 1520 22 (1997) (“[F]undamental to the preservation of our free market economic system is the 23 concomitant right to have the ingenuity and industry one invests in the success of the 24 business or occupation protected from the gratuitous use of that ‘sweat-of-the-brow’ by 25 others.”) Further, the injunction benefits the public’s interest because it will serve to deter 26 only conduct that violates the law. Thus, Plaintiffs have proven that the public interest 27 would not be disserved by a permanent injunction. eBay Inc., 547 U.S. at 391. 28 /// 1 ||B. = Injunction 2 In sum, Plaintiffs have shown that a permanent injunction is warranted. Id. Plaintiffs 3 || are entitled to a permanent injunction as follows: 4 Defendant, individually and doing business under any other name or using any other 5 entity, and those persons in active concert or participation with him, are permanently 6 || enjoined from: 7 1. Possessing, using, selling, advertising for sale, disclosing, posting, or 8 |/transmitting any of Plaintiffs’ confidential intellectual property. Plaintiffs’ intellectual 9 || property includes but is not limited to: 40,000 golf course maps; methods for processing 10 || the golf course maps through mobile applications on IOS and Android platforms or any 11 |}source code related thereto; and all technical information related to the Yamaha YTX, 12 |/including motor control and geo fence data. 13 2. Contacting Plaintiffs’ customers, including any current or former customers, 14 || regarding Plaintiffs’ confidential intellectual property. 15 3. Making any false statement that Plaintiffs are a terrorist cell, terrorists, or are 16 || affiliated with Russia. 17 4. Making any false statement that Plaintiffs engaged in theft, money laundering, 18 |/or tax evasion. 19 5. Making any false reports about Plaintiffs to the IRS or other governmental 20 || agencies. 21 IT IS SO ORDERED. 22 ||DATED: October 16, 2023 | | | | l | | | J 23 MARILYN N. HUFF, Distric ge 24 UNITED STATES DISTRICT COURT 25 26 27 28