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Jury Finds Newegg Infringed Patent, Owes $2.3 Million
Jah-Wren Ryel sends this quote from Ars:
"Newegg, an online retailer that has made a name for itself fighting the non-practicing patent holders sometimes called 'patent trolls,' sits on the losing end of a lawsuit tonight. An eight-person jury came back shortly after 7:00pm and found that the company infringed all four asserted claims of a patent owned by TQP Development, a company owned by patent enforcement expert Erich Spangenberg. The jury also found that the patent was valid, apparently rejecting arguments by famed cryptographer Whitfield Diffie. Diffie took the stand on Friday to argue on behalf of Newegg and against the patent. In total, the jury ordered Newegg to pay $2.3 million, a bit less than half of the $5.1 million TQP's damage expert suggested. ... TQP's single patent is tied to a failed modem business run by Michael Jones, formerly president of Telequip. TQP has acquired more than $45 million in patent licensing fees by getting settlements from a total of 139 companies since TQP argues that its patent covers SSL or TLS combined with the RC4 cipher, a common Internet security system used by retailers like Newegg."
Hopefully this turns out to be good advertising for NewEgg - I know I'll be making my next computer purchase from them to help support them in fighting a patent troll.
I need to buy a new desktop anyway. Newegg, my money's coming your way.
"With patience a ruler may be persuaded, and a soft tongue will break a bone."
any doubts that patents are ridiculous?
Trolls 1, good guys 0.
Stupid judge/jury.
At least it sounds like NewEgg will take it higher.
We'll see what happens in the circuit courts. East Texas is a joke and gets overturned on appeal frequently.
guaranteed if Newegg is taking such a strong position vs. patent trolls, this is not over by a long shot.
expect appeals for years to come.
They may think they've won this round, but little does TQP know that I have a patent on the filing of frivolous patent lawsuits. TQP can expect to hear from my lawyers soon.
...let's kill all the lawyers...
How can that company not be a patent troll?
Get free satoshi (Bitcoin) and Dogecoins
Bonus: I get three passports then.
-- Tigger warning: This post may contain tiggers! --
aka Patent Troll Capital.
Surely Newegg is going to appeal this idiocy?
That's one more reason to stop using RC4, which isn't secure anymore when used with SSL/TLS, such that Microsoft is moving it out of IE11.
"a company owned by patent enforcement expert Erich Spangenberg"
That's putting it charitably, to say the least.
Is it an appeal? Oh yes it is. These ass-clowns who think they have patents on the internet haven't yet faced the wrath of slashdot's anti-patent group of extremely knowledgeable and resourceful people.
I suspect a few people here with a little time on their hands will be able to prior-art their way to having the patent completely invalidated.
Something's rotten in the state of Texas.
"In prison you just have to shut your eyes and take it. Here you have to shut your eyes and give it."
"And how is it that you're familiar with public key encryption?"
"I invented it."
I want to delete my account but Slashdot doesn't allow it.
"In accordance with the invention, to permit the two stations to communicate, each supplied in advance with a random number seed value which exclusively determines the numerical content of the sequence of numeric values generated by each of the two pseudo-random generators."
I don't think SSL requires that both sides use the same prandom function, much less get a seed in advance, so how does SSL infringe again?
Newegg lost the trial but has prevailed on appeal with past cases against patent trolls. Newegg had budgeted its legal warchest to include appeal, so the fight ain't over yet.
Eternity: will that be smoking, or non-smoking? I Corinthians 6:9-10
a common Internet security system used by retailers like Newegg
Perhaps the retailers should make a gentleman's agreement to stop shipping to Marshall, TX.
Those who can, do.
Those who can't, sue.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
It was nice to have you in the world as a developed country but it fills me with pain that you are the leader -a thing you have a hang off- into the dark middle age:
* torture
* repression of free speak
* extortion with the help of lawyers
* killing innocent people with their drone war
* big brothering in a way that "1984" seems a little unabitious
* emphasing on belief instead of knowledge in teaching
The list is much longer but i am to saddned to continue over here...
Just a bit of research and comon sense tells me TQP is a small company (run by 2 persons by the way) is a big patent troll. On top of that, almost every commercial website uses those protocols, how many times he's going to court with this.. omfg, really ?
Can someone with moderator points PLEASE downmod "Jews Sue" one as flamebait? A hint for the "Jews Sue" author - if you want to slag someone, at least man up when you do it, and put your name on it. If not, you're just a lame, scared little boy/girl. I have no problems with people speaking their mind (if they have one), but I can't abide a coward slagging someone and not being willing to own up to the slag.
... the justice system simply doesn't work.
Dear Slashdot: next time you want to mess with the site, add a rich-text editor for comments.
I have no idea how in the world anyone with a clue can claim that this patent and SSL using RC4 have anything to do with each other. I just took at look at the linked patent and in a nutshell, what it does is have both parties switch encryption keys multiple times during a transmission by having both parties have identically configured pseudo random number generators which supply the encryption keys (this means that a limited amount of the transmission is encrypted with the same key before the key gets changed). Effectively this simply transfers the overall security of the system to the security of the PRNG, but it doesn't solve the problem of the initial key transfer/generation. I really hope that Newegg appeals this stupid ruling.
They ate a $900 loss once for me when the mfg was useless. and crap.
Newegg has my business forever. (until they screw me over in a major way).
Hopefully never.
Xmas comming. Lets go buy something at newegg!
Just shot Erich Spangenberg in the head.
That should settle it.
As a developer of original software products, I consider it impossible - just my opinion - to determine if any software I create infringes on existing patents. There are usually thousands and often tens of thousands of ideas, algorithms and design approaches in a product that would need to be checked, and patents are so wordy that the time it would take to determine if there was infringement would always far exceed the time it takes to make the product. This seems to me to pose an undue burden, and is therefore unconstitutional?
Does anyone have any thoughts on this?
Sent from my ENIAC
Comment removed based on user account deletion
Annual Sales
Approximately $2.5 billion in 2010
http://www.newegg.com/Info/FactSheet.aspx
I'm sure this will really hurt their bottom line. lol
I'm surprised Newegg doesn't just buy this company and fire the entire staff with extreme prejudice.
I do a lot of business with newegg. As a hobby I run a small "custom computer" business. I basically started out building computers for my familly and friends... and then it move on to "extended family and friends" and now I do between $10k and $20k in business with them per year. I don't make any profit, I just like doing it and I get lots of freebies as a result.
Newegg is by far the best retailer I've worked with. I do all of my business with them now. They even let me return downloadable software once because it wouldn't install correctly. I've returned CPUs after they were installed! Granted, they give me more leeway because I do so much business with them but they really do have decent policies and try their best to rectify any issues I have with them. Dell? HP? Crutchfield? Yea, they can all burn in hell.
I thought all documents presented in court were required to be in comic sans....
As a developer of original software products, I consider it impossible - just my opinion - to determine if any software I create infringes on existing patents.
I'll make it easy for you: it does. Unless you're coding ridiculously simple, run of the mill, junior college project level software, you are violating someone's patents somewhere in your code. Will someone come kicking down your door someday? Probably not, at least, not unless you become successful enough to be worth it.
Hire someone to look into it. Firms exists for this kind of thing. That would be a solution but I assume it's not cheap obviously since the firm as to take a look at all the details of your invention then search through a really huge database to look for similar technology that uses patents like yours or similar to yours...
the level of technical incompetence in these 'trials' is jaw-dropping. every description of the techniques at issue was loaded with metaphors, attempts to explain the technology involved to the technically illiterate involved in deciding the matter. how many of the jury have the skills to write, or even maintain, an RC4 based SSL service?
admittedly not many of us do, but by which madness does anyone expect these people to have a clue?
i profess to know a little about how these things work, having been involved in the development of somewhat similar technology, and yet i cannot find in any of the disclosures sufficient information to even begin to construct a system similar to the one newegg is in trouble over. obviously the information is there, the mechanism in question is everywhere, but in the trial itself, the actual mechanism is considered irrelevant, a black box. that nobody involved is expected to understand.
blinded by science.
still, what do you expect from a nation created by a god?
what are the chances this matter will ever be tried by a jury of competent professionals - ie the actual peers of the people who actually wrote newegg's system? my impression is that this will continue to be haggled over by professionals of every field except the field in question, like a bunch of blind men haggling over the price of an elephant.
do not believe everything you read on the internet - abraham lincoln
Unless you're coding ridiculously simple, run of the mill, junior college project level software, you are violating someone's patents somewhere in your code.
WTF? Are you out of your mind? Name one junior-college level project that won't infringe some patents. Go ahead, we're waiting ;-)
Why would the fact that there's a burden you can't meet somehow make it unconstitutional?
If I invent a new drug but don't have enough money to comply with FDA regulatory rules, does that make those rules unconstitutional?
That is all I can say.
Hire someone to look into it.
This is the last thing you want to do. The reality is your software is going to violate somebodies patent (there just too many overly broad software patents out there). If they can show you knew you infringed they can get extra damages for willful infringement. You are better off just not knowing. I know several companies that actively discourage their developers from looking for infringing patents for this very reason.
Patent that should never have been granted to begin with.
At some point the anti-patent troll (or even the anti-copyright cartel) folks needs to start resorting to violence, because this diplomatic route is not working at all. Get to work, boys!
http://nooooooooooooooo.com/
fashioned by the Supreme Court. The test was developed in the 19th century and is widely used to determine if a law or requirement is constitutional.
More here: http://en.wikipedia.org/wiki/Undue_burden_standard
It seems a fait-de-complete that this -is- an undue burden. But sincerely, how could this not have been challenged already by giant corporations on this basis?
Sent from my ENIAC
The fact that every plantiff for patents takes their case to this court in Texas smells corruption IMO.
There should be no more patent trials in this court. I wonder how many the plantiff will win if there were no more cases in this court.
Fuck marshal texas
If you use essentially any form of encryption, then you infringe on this patent.
"First they came for the slanderers and i said nothing."
I used to buy a lot from Newegg. But their distribution channels meant my stuff always came from West Coast which meant a 3 day or more package travel. So I typically use TigerDirect or Amazon. I wish Newegg success but they need more regional warehousing.
If the United States wants to be taken seriously in software development they will have to annex Texas.
Fittingly the captcha is Truths
Excuse me while I go buy something from NewEgg.
http://www.theatlantic.com/business/archive/2012/03/why-patent-lawyers-are-clueless-about-the-software-industry/254963/
Yes, it is impossible to figure out which patents your software is infringing. The article I linked explains a few reasons why.
In Soviet Russia, I ruled you
You shouldn't even have to go that far. If you, as an ordinary software developer, came up with an idea independently on your own, and you later find out that the idea was already patented, then the patent should be invalidated because it is obvious to someone with ordinary skill in the art .
Unfortunately it's nigh impossible to prove that in hindsight, since you can't prove that you didn't peek at the USPTO website to see the patent you supposedly infringed.
Is there an Indigogo campaign?
The business model TQP and other patent trolls use may be a thing of the past if the Innovation Act 2013 passes http://jolt.law.harvard.edu/digest/patent/innovation-act-of-2013-latest-effort-to-disarm-patent-trolls
that the simpler or more generic the idea, the more time-consuming the search becomes. Because 1) the simpler the idea, the more likely it is that it has already been thought of, and therefore more likely to be patented, and 2) the simpler and more generic the search terms are, the more hits are returned in a search. So this means the simplest of ideas are the hardest ones to verify, and there are many many more of them in a program.
I tested my theory by searching the USPTO database to see if the idea of a calculator program is covered by any patents. Using the Google patent search engine, the search results were overwhelming:
https://www.google.com/search?num=100&site=&tbm=pts&source=hp&q=calculator+program+&oq=calculator+program+&gs_l=hp.3..0l10.6707.22776.0.23191.31.23.6.2.2.1.221.3044.5j17j1.23.0....0...1c.1.32.hp..6.25.2141.3USxvlIs4TQ
I tried reading the first one and gave it an honest try to determine if it covers a generic calculator program, and it seemed to in places, and in other places it seemed not to cover it, But that leaves me with an even larger quandary, if parts of it encompass the generic calculator, does it encompass the generic calculator? So even on the very first one, I would need legal opinion. This is out of my league; in no way can I be expert enough nor have time enough nor resources enough to perform a patent analyses encompassing enough to determine if I should write my generic calculator program. The programming is far more trivial than the search.
Using the USPTO search tool was even worse, I could not even verify that my search was finding what I was looking for.
You could argue that I should then \hire an expert to determine this, but that seems to corroborate that this is an undue burden with somewhat similar legal president, because the IRS is required to make tax filings for individuals able to be reasonably filled out by the individual and not be required to hire an expert to file their taxes for them. Of course a business is different, but to me the burden here is orders of magnitude higher than with a tax filing.
Sent from my ENIAC
far too low. Most of what is patented, in my opinion is obvious. Even the MP3 encoding algorithm to me is obvious. I can barely imagine something software-related that is not obvious.
Does that make the system wrong, or does that make me someone with extra-ordinary skill, or does that make me delusional? Along with a million other coders?
And is the bar for ordinary skill static in the software industry? No, it changes every year. So if a patent is contested on this basis, how is it verifiable years later? These things seem obvious to me, but I guess I have above-average skill, just like almost everyone else.
Sent from my ENIAC
Unfortunately it's nigh impossible to prove that in hindsight, since you can't prove that you didn't peek at the USPTO website to see the patent you supposedly infringed.
And the fact that cases are adjudicated on the basis that you can't prove a negative is just more reason to conclude the entire patent system is broken beyond repair.
What they should have done is get Jeff Bridges to play Whitfield Diffie. Then the jury would be impressed.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
I mean why not? Would be pretty satisfying to wipe the smug off his face with a bullet to the chest. I mean for fucks sake, how many millions does a guy get to steal before someone puts him down?
but I would have had to click twice.
If a loss is unpredictable and unavoidable, it should be insurable. I guess one is expected to take out some form of errors and omissions insurance policy that covers unforeseen assertions of patents by NPEs.
I will make it simpler. If you make a product. Any product whatsoever. I would be willing to put money that you infringed some patent somewhere. There will be a couple of questions, 1) is the patent still enforceable (i.e. has it expired) and 2) does it matter. There are over 8.5 million U.S. Patents alone. The odds are against you. Really, just make your product. Make it great. Get some patents of your own if your can afford it and have patentable ideas. Worry about infringing patents last. And please, just don't go looking for patents that you might infringe. You don't want to be on the stand someday admitting (or lying) because you knew of the patent you are being sued on.
A good reason to use RC4 today is that it is the only SSLv3/TLSv1.0 cipher that is not vulnerable to the BEAST attack. But attacks against RC4 itself are gaining momentum, and BEAST is a client vulnerability, and it should be fixed at client side, either by implementing TLSv1.1/TLSv1.2, or by adding the 1/n-1 split workaround. Most browsers did, but there are exceptions.
1) the interest to create and sell a software product of my own choosing, and derive my livelihood from it.
2) the interest of the government to foster innovation and progress
If I can't create -anything of significance- without impinging on a patent (and I believe that to be true), then the system prevents me from creating anything of significance and both of these interests are destroyed.
Sent from my ENIAC
It is unconstitutional, the legal profession and USPTO barely gives a shit. I lived with a guy whose uncle hired like 20 lawyers to craft a patent over years he thought is worth a billion in legal extortion; they're now on the payroll of the "software" company as "programmers" when it really has like 1 or 2. They have about 1 or 2 real working products, and of course paid every public announcing business-media-propagating info-outlet around to get word out that they had this all-encompassing covers-all patent...and they're not even afraid. You're talking a coalition of some of the best lawyers out there. There's even a giant bounty on the damn thing, but it's so ambiguously worded and the legal formalism bulletproof that I doubt anyone can take it apart due to the vacuousness, but over years of "working with" the USPTO and carefully observing the "legal" environment they checkmarked every little dot and tittle necessary to make it "bulletproof" in the eyes of a judge, and probably psychologically impenetrable due to its lack of substance. These guys just...congratulated themselves on how clever they are, and they are...carefully wading their way through test trials, backroom deals, and other means to establish this as a threat and go after major players. The real question, then, is how...do we start prosecuting people like this, and administrations that continue up with them to put?
I should correct myself; what is consonant with the tenor of the Constitution (to use founders'-era or near-founders' era language) and "Constitutional" are, when you hang around lawyers and judges, two very different things; "Constitutional" is what they can get the highest symbolic authorities to declare and uphold against what probably actually is. And this is no joke. If I sound bitter about this, it's that I can see no "legal" remedy to this situation, at the moment, barring a successful amendment process which would not be wise with a nation of buffoons, because the "legal" profession and its many participants have created the mess.
The dumb piece of shit article didn't even explain that. By using some 3rd party hardware/software? How does possibly make them liable? If so, take out a few million and take out a hit on the judge / jury / patent troll and cleanse the gene pool a bit.
NewEgg is guilty of much worse!
Carpet bomb their HQ and distribution centers; leave no one alive.
You are infringing on countless patents before you even write a line of code. Do not ever do a patent search. That opens you up to triple-damages.
...is that no one here is outraged that Newegg, the patent infringer, is trying to get out of paying for this amazing technology. They think that since they can afford a gaggle of expensive lawyers that they shouldn't have to pay for technology they ripped off from this hard working patentor.
Only in America. (TM)
So using RC4 in TLS/SSL is cryptographically suspicious and legally troubled. What else do you need to disable it on your servers?
...let's kill all the lawyers...
First, they came for the lawyers, and I said nothing.
After that we all lived happily ever after.
The End :-)
...music!
From what I could find, it seems patent litigation is implicitly excluded from normal E&O insurance, and on new policies for tech firms is explicitly excluded, due to the high cost of patent litigation and the scale of the potential damages. Also, it is excluded from commercial general liability (CGL) insurance, and this has been upheld by the courts.
Interestingly, you -can- specifically get patent infringement insurance, but it is "generally considered too expensive to be worth the cost." (http://en.wikipedia.org/wiki/Patent_infringement#Patent_infringement_insurance)
And insurance seems like such a reasonable idea and a great solution. I wish it were practical. But hell. if the insurance companies won't even insure us for it at reasonable rates, then that is the "we ain't touchin' this cause it will make us broke" stamp that provides the undeniable proof that this system is an impractical nightmare.
Sent from my ENIAC
It seems I meant "undue hardship" - I didn't know that was different from "undue burden," because I'm not a lawyer, but it sound like you are - that's great. :) And this makes more sense because it seemed weird that it was a constitutional test.
So if undue hardship is "Special or specified circumstances that partially or fully exempt a person from performance of a legal obligation so as to avoid an unreasonable or disproportionate burden or obstacle." then how could that be applied? Do you think it could it be used as a defense in an infringement case?
Sent from my ENIAC
The easy part is guessing that it infringes a patent. The hard part, the only important part, is determining which, if any of the tens of thousands of patents even potentially apply.
CAPTCHA: despise, how apropos