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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."
You gotta make sure it takes at least 2 clicks to check out, or you're done for. I still wonder why someone doesn't patent the 2 click, 3 click... n click patent so for anyone to do business without tribute it takes 1000 clicks!
God spoke to me
A patent troll is one who files or buys overly broad patents, expressly for the purpose of not pursuing active development or marketing of their patents. A patent troll's business plan is to wait for a company to make big on something that might infringe, or buy portfolios that might be infringed on, and keep them in obscurity, till such time they can be used to sue(read: extort) a company such that proper legal defense is purposefully less than the cost to comply with their licensing agreements.
In short, a patent troll would prefer you not learn about their patent till it's too late, while a proper patent holder wants you to know of their patent so that you will license it from them for your technology.
You never realize how much manually made unmanaged "linked" lists suck, till you have src.link.link.link.link...
If I wasn't already a loyal customer, I sure would become one now.
A "patent troll" is someone that takes advantage of patent law for monetary gain based on the innovation of others. Patent trolls aren't trying to claim reward for what is theirs. They simply game the system and out-maneuver the innovators such that, by legal definition (but not common sense) they are entitled to reward.
As such, it's mostly counterproductive for the purpose that the method of patenting was intended to serve. (encouraging and rewarding innovation)
Patent trolls siphon off some of the rewards of innovation through litigation and through the licensing of innovations where they themselves were not the innovator.
Fortunately, a lot of courts (at least those that'd don't directly benefit from the litigations, such as texas east district) have identified these people as taking advantage of the legal system and costing it money in exchange not for the support of innovation, but for the enrichment of the trolls and stifling of innovation, and are starting to push for change.
I work for the Department of Redundancy Department.
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.
Stop-Prism.org: Opt Out of Surveillance
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.)
It seems like the easy way to fix the patent troll situation is for the government to require yearly progress reports (it's not too much to ask to have the patent holder produce something that indicates actual development work is going on whether the product is complete or not). The patent should be rendered null and void if the patent holder has done nothing but sit on it; if the holder hasn't done anything then it's time to let someone else try. No more free money by gaming the system and shaking people down.
"It is a denial of justice not to stretch out a helping hand to the fallen; that is the common right of humanity."
"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. "
They did hire an outside law firm, Weil Gotshal, which is one of the top firms in the country.
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.
Absolutely wrong, judges love dismissing cases, particularly complex cases like patent actions, because they don't want their docket to get overloaded. Judges make incorrect holdings of fact and law all the time; that's the whole point behind appeal courts. It's usually not out of malice or incompetence, despite perennial slashdot anger at what is perceived as to the contrary. Speaking as someone who used to litigate in federal courts, the majority of judges just don't care on a personal level about the parties before them, they just want to get the cases moved through their court. The only personal investment most judges have in the cases is they don't want them to be reversed because they consider it as a hit on their reputation.
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
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."
And this is why the legal system (not just patents ... the WHOLE legal system) is so screwed up. Judgment on cases brought before the court should always, and only, be based on the merits of the case, no matter how good ... or how bad ... the attorneys are. This is what is raising the cost of lawsuits in this country.
now we need to go OSS in diesel cars
This is the clearest explanation I have seen of the difference between a troll and a non-troll. Thank you for that.
A troll lurks under his bridge, the one you have crossed every day for a year, and then after you have crossed many times, maybe even built your business based around using that bridge, springs up and says, "You crossed 365 times without paying me. My bridge is critical to your livelihood - now pay me [some enormous amount] or you can not cross again!" The non-troll, on the other hand, proudly stands by the entrance to his bridge and, before you cross the very first time, says "Crossing the bridge will cost [some nominal amount] per trip. Do you wish to pay, or find another route?"
There are in fact legitimate companies whose business model is to perform research, develop new technologies, and license those new, patented, technologies to other companies who produce products using those technologies. Some companies are good at making stuff. Others are good at inventing stuff. They shouldn't necessarily have to be one and the same.
It bothers me that people want to throw all "non-practicing entities" in the same bucket as true patent trolls. Some NPE's add real value. (One example - look at the cell phone in your pocket. The fundamental technology behind that little wonder was developed 30 years ago by a company who today would be called an NPE. They still do R&D, they still actively license their patented inventions. They are the furthest thing from a troll. Google InterDigital.)