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How Newegg Saved Online Retail
bargainsale writes with an account at Ars Technica of "the inspiring story of Newegg vs the patent troll. Perhaps the system does work after all." Newegg's lawyer Lee Cheng has some choice words for the business model employed by Soverain Software, the patent troll which tried, with some success, to exact money from online retailers for using online shopping carts. Newegg has prevailed, though, and Soverain's claims are toast. From Ars: "The ruling effectively shuts down dozens of the lawsuits Soverain filed last year against Nordstrom's, Macy's, Home Depot, Radioshack, Kohl's, and many others (see our chart on page 2). All of them did nothing more than provide shoppers with basic online checkout technology. Soverain used two patents, numbers 5,715,314 and 5,909,492, to claim ownership of the "shopping carts" commonly used in online stores. In some cases, it wielded a third patent, No. 7,272,639."
Since they died, it apparently was their time.
Patent trolls often wield bad patents. There are also companies that make things that wield bad patents. Beware of associating the bad of our patent system only with trolls -- the problem runs deeper. If all trolls disappeared tomorrow, we would still have vast minefields of bad patents and enormous, destructive patent battles.
We have just invented the greatest tool since Gutenberg for the dissemination of information. An almost incomprehensibly powerful tool for decentralizing problem solving. At the same time, we have been radically increasing the breadth and power of patents, which inhibit the decentralization of problem solving. Patents have a good mission, but their method is a hinderance to the information revolution. That conflict is inherent in patents; it does not require a troll to cause harm.
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The sarcasm was fun, but if you RTFA, you'll discover this isn't the lone mole. He's been at it for six years, and this is at least the 5th mole. So no, he hasn't Won the Game, but he's a lot farther in than one mole and he still has his mallet in his hand. More to the point, he has NewEgg executives and NewEgg's money behind him, so it's a pretty large and well-funded mallet.
NewEgg's executives should be inordinately pleased with themselves. Their strategy just paid for itself. All the money they sank into this defense will be paid back and then some by not having to pay a tax on every transaction to these stuffed shirts for the next 10 years. (Or 30 years, if they had filed an amended patent that magically re-ups the expiration term.) (Or 50 years. Or forever.)
Meanwhile, there's a laundry list of other retailers with an online presence who either knuckled under or fought just a little bit, then knuckled under. Ask yourself why. The answer starts with "cr-" and rhythms with brony....
RTFA. The patents were overly broad/obvious, and there was prior art. Other companies who were approached by Soverain settled because they didn't want to get drawn into a lengthy and expensive legal battle. Newegg stood their ground, and ultimately prevailed.
Yes, Soverain was a "legitimate patent holder" in the sense that they legitimately owned the patents in question. But the patents themselves were not legitimate (in the sense of embodying anything original or unique).
I suspect that one of the reasons Newegg stood their ground is that -- unlike most of the other companies mentioned in the article -- they are exclusively an online operation, and therefore had more at stake.
Screw them. Seriously, screw them. You can quote me on that.
In Internet vernacular: QFT—Quoted For Truth.
Thank you Mr. Lee Cheng for saying it and saying it with attitude. I'm afraid it will probably cost you in the future when judges read about it and are miffed by your attitude, but you'll probably only be seeing the same six judges for the next 20 years anyway, and they already don't like you on principle, so... full speed ahead and damn the torpedoes.
That's one useless little rent-seeker squashed. Only 1000 more to go...
(Mr Lee Cheng of NewEgg has some serious job security.)
yeah, I know, I know. I felt a twinge of regret when I hit the submit button. I was being grossly unfair. Sorry about that.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
According to the article, the main prior art they found was a Compuserv checkout. I wonder if they were prepared to bring up the various bulletin board commerce solutions...surely a few of those would qualify as well. It's absurd that a company would think they could sue every company and license for a technology that's existed since at least the early nineties, but wasn't patented until the web was well under way, and had NO ties to the original software.
Ummm, kudos? Seriously? He could've used another term. You're both asses.
Those other companies may be larger in total sales, but they have a smaller online presence; Newegg is currently the 13th largest online retailer. Probably explains why the other companies settled rather than go to trial; online sales likely weren't enough of a priority to them.
Poor choice of phrase, even though it accurately connotes the situation, its so inflammatory that nobody can hear your comment, which is too bad, its a good comment. I'm a little torn by this issue, I understand the pain and anguish this language has inflicted, and that the black culture still experiences some PTSD from it and related language. That said, there is important, vital work, by people like Twain in his stories about life in slave era Missouri, that people need to understand and appreciate, and that truth plied with honest compassion and dignity invariably trumps well meaning dishonesty even when that dishonesty is easier or socially less expensive. Rewriting the works of Twain and for that matter sanitizing history, science and art for our children, so we don't have to address real problems or philosophically complex truths does no service to them or the future of our society. So I would honestly say that the parent post doesn't deserve a Flamebait rating, however, I would also say, in this era of social awareness, it behooves us all to choose our words with at least a modicum of consideration for their unintended impact.
As for the patent trolls. I want to flame them, and I don't mean over the internet. Thank you NewEgg, I've done business with you before and now I will do all my PC related business with you. You fight to keep the parasites and leaches from bleeding my world dry. This makes you heroic in my eyes, and I support your work to make this form of commerce safe from the greedy and conniving. We all suffer at the soulless ministrations of these sycophants and their legal minions. Its time to take back what it rightfully and justly ours, to stop this runaway train from sailing into the abyss, and put IP protection back to a place that serves the future rather than cannibalizing it.
> "the inspiring story of Newegg vs the patent troll. Perhaps the system does work after all."
Unfortunately this doesn't take into accounts the costs. Newegg was lucky that they had an in-house lawyer and the original owner who was prepared to make a stand. This is rare: Conventional wisdom is to hire outside lawyers - patent specialists and all. Lawyers don't come cheap, so Patent troll victims end up owing their lawyers millions of dollars EVEN IF THEY WIN. Under the American court system usually the loser does not have to pay the winners costs, and even in countries where they do, the loser only pays a fraction of the winner's costs costs. The article also doesn't consider the incredible waste of employee time responding to a suit where they could be doing something profitable instead. It also doesn't consider the stress on the employees and the owners. No one will buy a business threatened with a patent lawsuit. Business development grinds to a halt. In theory judges are supposed to dismiss law suits without merit, but they don't - because they don't give a shit about the costs and it gives them something to do.
That the original judge fucked up does not surprise me. Forget what you see on TV about just and fair judges: In patent troll counties like the Eastern District of Texas the judges are blatantly pro-plaintiff. If they were not all the money flowing into their district would dry up, the judges and legal fraternity would be looking for a job somewhere else. The system has not worked. Newegg may have won, but the suit would have still cost them a fortune. This is a rare outcome and usually costs the trolls nothing who shrug and move on to their next victim.
I suggest a new strategy: but the judges of the Eastern District of Texas and other patent troll counties under a microscope and petition the government to remove judges who are playing sides or unfit or incompetent to serve. Did you notice the article doesn't name the original judge? Awesome job. Imagine being able to fuck up like that but everyone is so in awe of your power no one will name you. In any other profession people would be laughing at them over the water cooler.
Under the current system, a lot of people own patents on things they shouldn't have been allowed to patent in the first place. That's the crux of the issue. I've got no problem with people enforcing patents on things that are truly innovative. But too many patents these days are for concepts which already existed prior to the filing of the patent and/or are clearly obvious.
I really have little idea - I've allowed for that possibility. But, if you've read TFA, then Mr. Cheng indicates otherwise. You can take your pick - believe Mr. Cheng's statements, or assume that Newegg has settled quietly with other patent trolls. It's possible that Newegg simply believed this case was winnable, while other cases may not have been.
What I am very sure of, is that the patent office needs more funds, more personnel, and orders from congress to weed out all these submarine patents, get rid of obvious patents, and search for prior art patents. Before any of that, though, the patent system itself needs to be overhauled.
It's been noted often enough here, that companies don't WANT an "inventor" to be aware of prior art, etc. They WANT their "inventors" to submit ideas, so that the company can file the patent. They get it filed, if it gets approved, then it's valid on it's face. Better to wait for a civil suit, to have it's validity tested, when everyone can innocently claim, "Well, we did this all independently, and we had no idea that anyone else may have done it. It wasn't all that obvious, from where we were sitting, at the time!" Those, and similar arguments, might convince a jury, or they may not.
Basically, it's all a huge gamble, largely determined by the size of your legal staff - and it's so very wrong.
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
People who didn't want to appear to be complete assholes would avoid a phrase that not only used a vile racial slur, but was a metaphor suggesting that a fugitive slave was a hidden problem rather than a person to be aided by all means necessary.
In the GP post's context, such a person might say "The catch is the word `legitimate'," or "The snag is the word `legitimate'."
Tom Swiss | the infamous tms | my blog
You cannot wash away blood with blood
Why would you need to? There is no woodpile. There is no person, African or otherwise. It's just a phrase that means what the damn link it links to above says is means. There's about 17 billion different ways to say the same thing, many of which aren't needlessly jarring (and hence don't detract from the actual point being made).
More to the point, while the point of patents (and other IP laws) was explicitly to incentivize innovation, patent trolls act as parasites and discouragements to innovation. They provide no new ideas or products of their own, instead litigating against and punishing those who do.
They undermine the very system they are abusing, and hurt everyone involved for their own gain.
And two-clicks is actually more user friendly because then you don't have to go through a dozen clicks to cancel the order you accidentally placed.
What changed under Obama? Nothing Good
The examiner's biggest problem is probably time. The paperwork flows onto his desk at a breakneck pace, and he needs to get it off of his desk somehow. Skim it, rubber stamp it, and pass it on to the next person who rubber stamps it seems to be the most common method.
Well, there is also the problem that in most jobs the ones whom management considers the best workers are those who go through their work the fastest, not those who do the highest quality work.
This ad space for rent.
You must be kidding. Since the patent troll is enjoying a government-granted monopoly, what the troll does with that monopoly is every bit the government's business.
"It is a denial of justice not to stretch out a helping hand to the fallen; that is the common right of humanity."
There's a lot of colorful (no pun intended) speech from a time before the civil rights movement. My Mother used to own a nut and candy store, and old folks would come in and ask for N***** Toes, a euphemism for Brazil Nuts. There was no dark intent, no racial slur, its just what people from a certain part of the country called Brazil Nuts. This is valid speech, yet it has the burden of all these unintended consequences. I was watching a Ralphie May video, I don't know if his idea for destroying words that reflect hate is the right way to go, but I have to applaud the attempt... Gays have reclaimed "Queer", though a number of bigots still use it as an epithet, but the word most folks looking to hurt use now is "Fag" or its longer variant, because queer has lost its sting..
I was listening to Shawn Mullins' song "Shimmer" and the first verse talks about a child being born perfect and we'll teach it how to hate. But, we're born to shimmer, born to shine, born radiate, born to live and born love, and born to try not to hate. I think George Carlin had it right. There are no bad words. Those are just arbitrary noises coming out of our mouths. There are bad intentions, bad deeds, bad actions predicated on hate and ignorance. Its time to wash the words clean. Its time to end the hate and embrace our differences, celebrate our diversity.
Nope. All that would do is produce another mountain of fake/useless bureaucracy at taxpayer expense. Patent troll are quite capable of pretending to do "research".
No sig today...
...or... after the second year we should limit patent damage claims to a multiple of what the licensee was paying the patent office every year to maintain that patent. A patent which is earning you millions every year is worth paying $100,000 a year to maintain, right? 5% of the patent's value feels about right.
Hang on... that might actually work.
I've just fixed the system!
No sig today...
1. Require the plaintiff in a patent suit to actually manufacture and sell a product using the patent in question. No patent holding companies putting their tax on innovation.
2. Require patents to be available under a statutory rate which must to the lowest license fee charged to any of the current licensees.
"GET / HTTP/1.0" 200 51230 "-" "Mozilla/4.0 (compatible; Setec Astronomy)"
I'd call it "mistaking succesful damage control for correct functioning". Apparently the system isn't entirely dysfunctional as patents can be revoken and it is possible to prevail against a patent troll, depending. But that doesn't imply the system as a whole is functional.
The fact that these patents were issued in the first place and that patent troll companies can exist on settlements and the occasional lawsuit already ought to be proof enough that the system is at least partly dysfunctional and therefore not fully functional. I would even argue it is dysfunctional enough to warrant immediate takedown of the entire system, and a rethink of what we originally wanted with the system.
If you can't see that, then maybe you're not really informed and if you're trying to inform the public while in such an uninformed state you're likely to spread misinformation. As such, shame on ars technica for wishful thinking. They ought to have known better.
That won't work. The patent troll will just do the minimum amount of 'work' to keep the patent active. "Report: prototype now uses green LEDs instead of blue ones for better readability. Still much more to be done."
Posting anonymously b/c I'm moderating. (Immerial)
The problem with that seems to be they would have to guess the commercial value of a patent in advance. If they guess too high, they end up paying large amounts of money for the privilege of a worthless patent. If they guess too low, and their patent becomes immensely valuable, other companies can license it from them at rock-bottom prices. Imagine if copyrights worked like that and you had to guess how many books you would sell before getting a copyright...
That would be a Justice system.
Some people call what we have a justice system, but they are wrong. What we have in the US is a legal system.
There are a few good things about a legal system. Also a few pitfalls in having a "Justice System".
Though I think I would still prefer a justice system. Even though it would result in the instantaneous execution of many lawyers and politicians.
Notice how such a large number of scum sucking politicians are lawyers?
Why is it so hard to only have politicians for a few years, then have them go away?
Nope. That way just opens the door to creating new ways to beat the system.
I think letting patent holders choose how much to pay the patent office, then limiting their damage claims to a multiple of that amount is the way. In that world nobody could afford to sit on a stack of patents in the hope of suing somebody for big money. The only patents being actively maintained would be patents that were earning real money.
No sig today...