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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."
"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.
We can fight these stupid decisions coming out of east Texas one by one, or we could be smarter about it. We can try for patent reform, but the $$ involved, they will probably find a way around that as well. How about we start a PR fund with the goal of flooding the East Texas jury pool (buy TV/Radio/Newspaper/Internet in that geography) explaining why this is bad to the people that will be sitting in the jury box. Explain that it's actually killing small, successful companies, and only enriching the trolls/lawyers who actually did nothing. Call it carpetbagging - should resonate with Texans.
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
Playing devil's advocate here... Why is this result some failure of the judge/jury of this case? Like it or not, this patent has previously been granted by the patent office. Jurors and judges don't get to invalidate patent claims because of some flaky idea of who is trolling who. Rather, they have to follow a more or less established legal process, regardless the side they may otherwise be rooting for. You want a "Bad Guy" for this event? Blame Congress, as current law incentivizes patent reviewers to accept questionable patent applications, and the number of years granted to these patents are too many.
What is somewhat surprising is that Newegg had, as expert witness, Whitfield Diffie, as in 'Diffie-Hellman' Diffie. I didn't even know that it was possible to lose an assymetric-key encryption related case with him on your side, especially against nobody in particular.
When the guy who invented public key encryption tells you that the basis of the patent had been around for years, that is a failure of the jury in this case.
At this point, I think people should just be suing the USPTO for lousy patents which should never have been granted in the first place.
Lost at C:>. Found at C.
The most amazing thing is that TQP's argument against Diffie involved them finding potential prior art to show that Diffie wasn't the inventor of public key cryptography. Even if this argument succeeded, then it should have put an even bigger nail in their coffin since it would show even more prior art for the patent.
This really was the worst kind of patent too. So I see you're doing asymmetric crypto for key transfer...but ah ha, I got a patent for asymmetric crypto for key transfer using RC4! Checkmate! Like wow, you applied the most common (at the time) algorithm to a system that kind of resembles a SSL connection, except that it's with modems and came a few years after the big Diffie-Helmann paper.
And of course they aren't suing the people who made the SSL offload appliances that got NewEgg into trouble, they're suing all of their customers, for using the thing with the default settings. And they're calling it willful infringement because they didn't go an explicitly disable the RC4 feature to comply with a patent they knew nothing about.
I read the internet for the articles.
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
It wasn't better marketed, it was created and made available by Diffie. That 'and' is important here. The British kept it secret that they even done it until '97. This is an example of parallel invention, only in this case one side made it known he had created it and the other didn't. For creating and publicizing Diffie is correctly attributed as the co-creator of Public Key Cryptography.
"I use a Mac because I'm just better than you are."
When the guy who invented public key encryption tells you that the basis of the patent had been around for years, that is a failure of the jury in this case.
Except he didn't, and they didn't. Read page two of this article from yesterday about his testimony.
Basically, TQP admits that their patent is obvious in view of a combination of two references, one of which is Diffie's work, and the other of which was some work by Lotus: neither Diffie nor Lotus invented TQP's invention, but if you slap the two together in a reasonable way, they teach everything in TQP's invention, so it's obvious.
Except, Lotus didn't publish their work until after TQP filed their application. And legally, that means it's not prior art, even though they were working on it in secret for some time. In other words, even though someone else invented what they did, it doesn't count, because that someone else kept it secret.
So, Diffie gets on the stand and talks about his work on crypto, which was the first half of TQP's combination. On cross examination, TQP's lawyer points out that he didn't really invent it, did he? And Diffie says that someone else invented what he did, but it doesn't count, because that someone else kept it secret.
So, it sounds like the jury was persuaded by Diffie that TQP's patent was valid.
Or we could just encourage Texas to follow through on their threats and secede from the United States. Problem solved!