RSS
Newegg's 'Screw Patent Trolls!' Strategy Leads To Victory
from the standing-up-to-bullies dept
However, Newegg chose to fight it, and despite losing at the district court level (in East Texas, of course), the Appeals Court has invalidated all three patents. Incredibly, the East Texas court had refused to let Newegg make the argument that the patents were not valid.
At district court, the judge hadn't even let those invalidity arguments go to the jury, stating there wasn't "sufficient testimony" on obviousness, and that it would be "very confusing" to them.That's fairly incredible. The validity of a patent is a key issue in any patent trial, and for a judge to reject it even being brought up for being "too confusing" to a jury is astounding. Thankfully, the appeals court completely rejected not only that idea, but the patents as well -- and it means that some other recent verdicts in favor of Soverain are now dead as well.
Mullin's article also highlights some of the bogus nature of Soverain:
Mullin also includes a fantastic interview with Lee Cheng about why Newegg was willing to do this. It's worth reading in full, but here's just a snippet:It's all a sham. Court records show Soverain hasn't made a sale—ever. The various voice mailboxes were all set up by Katherine Wolanyck, the former Latham & Watkins attorney who is a co-founder and partial owner of Soverain. And the impressive list of big corporate customers on its Web page? Those are deals struck with another company, more than a decade ago. That was OpenMarket, a software company that originally created these patents before going out of business in 2001. It sold its assets to a venture capital fund called divine interVentures, which in turn sold the OpenMarket patents to Soverain Software in 2003.
"Thank you for calling Soverain technical support," says Wolanyck, if you press option 2. "If you are a current customer and have a tech support question, please call us at 1-888-884-4432, or e-mail us at support@soverain.com." That number, like the "customer support" number on Soverain's contact page, has been disconnected.
Patent trolling is based upon deficiencies in a critical but underdeveloped area of the law. The faster we drive these cases to verdict—and through appeal, and also get legislative reform on track—the faster our economy will be competitive in this critical area. We're competing with other economies that are not burdened with this type of litigation. China doesn't have this, South Korea doesn't have this, Europe doesn't have this.Of course, once again, we wonder how companies like Amazon, who "settled" with Soverain, paying them tens of millions of dollars, feel about this. Why is it that the companies who settled over patents later declared invalid aren't able to seek their money back? Seems only fair.
Just in our experience, we've been hit by companies that claim to own the drop-down menu, or a search box, or Web navigation. In fact, I think there's at least four that claim to 'own' some part of a search box.
It's actually surprising how quickly people forget what Lemelson did. [referring to Jerome Lemelson, an infamous patent troll who used so-called "submarine patents" to make billions in licensing fees.] This activity is very similar. Trolls right now "submarine" as well. They use timing, like he used timing.
Then they pop up and say, "Hello, surprise! Give us your money or we will shut you down!" Screw them. Seriously, screw them. You can quote me on that.
I have an idea...
From Noodles And Hot Sauce To Funding In 9 Weeks, With Oomf Founder Mikael Cho
Securing Venture Capital for that Next App Development
I’m looking for policy...
Policy Resources: Data Privacy & Security
Developers On Patents: Five Employees, Six Lawyers
I have an app...
Top 5 Reasons Why Mobile Analytics Is Important
Marketing And Monetization Strategies For Free Apps
Reader Comments (rss)
(Flattened / Threaded)
[ reply to this | link to this | view in thread ]
No it isn't. The companies who settled didn't pay their lawyers to fight the bogus patent. Instead they paid to settled. Newegg paid it's lawyers to fight. Each option has a cost. If certainly isn't "fair" to have those too intellectually weak to fight this to ride on Newegg's coattails post-victory and get their money back. That's just letting someone else pay for your mistakes.
However, now that the patents are invalidated, there should be some mechanism to invalidate (going forward at least) a contract based on an invalid patent.... though I expect, if the troll's lawyers were any good, the contract probably explicitly took that into account, so ... those who settled and took what appeared to be easy way out shouldn't be rewarded for their..... lack of .... we'll call it "character".
[ reply to this | link to this | view in thread ]
and that customer is me....
bravo good sirs and madams.....bravo
[ reply to this | link to this | view in thread ]
Why - why not
No - those companies were lazy and or cowardly.
The company that wins the lawsuit and gets the patent invalidated should scoop the pot.
That would create a good incentive not to settle!
[ reply to this | link to this | view in thread ]
Thanks guys!
[ reply to this | link to this | view in thread ]
Re:
It would certainly make patent troll slaying a more viable option.
[ reply to this | link to this | view in thread ]
seek their money back? Seems only fair.
Good for Newegg. Trolls will think twice before including them in on litigation.
[ reply to this | link to this | view in thread ]
Re: Troll Settlement Recouping
These companies use patients like lotto tickets, and a lot of them "get lucky." However if these trolls constantly have a axe hanging over their ill-gotten gains, they may think twice before trolling.
[ reply to this | link to this | view in thread ]
your pretentious prattle has now got other people eroding patents, soon we will all be living in caves because of your selfish koolaid shower
[ reply to this | link to this | view in thread ]
Re:
Settlement agreements almost always have language releasing all claims known or unknown, and express waivers of issues/claims that might arise based on later-discovered facts. Designed to end it for good.
Contracts can sometimes be invalidated for fraud; but in settlement agreements, the facts were disputed in the first place, and the agreement likely would have indicated that. And ... these guys did have a patent with a presumption of validity.
So for the folks who paid, trying to get out would be a just a costly exercise in windmill tilting. I hope someone tries anyway. I'd take that long-shot bet on principal.
[ reply to this | link to this | view in thread ]
Re: Why - why not
When you defend yourself in court, you have to have the cash to pay for an attorney who can win. Usually not cheap.
Then you have to pay for the appeal. It's inevitable.
If you lose, you're then on the hook for the loss as well. This is a deep pockets game.
Lastly if you cut corners and bring anyone but the best attorney to court, you're going to lose at create more case-law that favors the patent trolls.
This stuff is a lot more murky than you're making it sound.
[ reply to this | link to this | view in thread ]
Re: Re: Troll Settlement Recouping
[ reply to this | link to this | view in thread ]
Re:
[ reply to this | link to this | view in thread ]
Translation: 'If the jury is provided with actual, relevant information, they might end up making a decision contrary to the verdict I've already decided on.'
[ reply to this | link to this | view in thread ]
nice
Every time you roll over and let a troll win, you provide incentive for that troll to continue trolling, and more people will be exploited.
In my opinion, money spent doing good like this does more to advertise for NewEgg than money spent on advertising would.
[ reply to this | link to this | view in thread ]
Why is "old technique but on a computer" patentable?
This is why patents are stupid.
[ reply to this | link to this | view in thread ]
Re: Re: Troll Settlement Recouping
But that gives incentive to the people the trolls go after to say "someone else will pony up for this one, and I'll claim back after."
I'd like to see the person who smashes the troll receive more incentive to fight, like being awarded costs plus punative...
[ reply to this | link to this | view in thread ]
Re: Re: Re: Troll Settlement Recouping
Send the settlement/extortion money the trolls got to the company that paid it or send it to charity or something like that, what matters is taking it back from the patent trolls, because if they get to keep all the money, then why would they care if they lost the ability to make money off of a particular set of bogus patents, they still managed to rake in millions with them, and all they have to do is switch to the next set of bogus patents, of which there is an endless supply.
[ reply to this | link to this | view in thread ]
Check out the interview he did with Ars.
And his philosophy
[ reply to this | link to this | view in thread ]
Why is that the case? Is there something in the settlements preventing them from going back and suing to get their money back?
It seems to me that a patent being declared invalid would invalidate the prior settlements concerning that patent also. Is it because both sides agreed voluntarily to the settlement and the issue is declared legally "resolved" at that point or what?
[ reply to this | link to this | view in thread ]
Re: Re: Why - why not
[ reply to this | link to this | view in thread ]
This just gives me more impetus to keep doing it. Thanks, Newegg.
[ reply to this | link to this | view in thread ]
Re: Re: Re: Why - why not
A lost case just provides more ammo for the trolls, making it harder for those who follow.
[ reply to this | link to this | view in thread ]
Re: Re: Re: Re: Troll Settlement Recouping
Punishing the patent troll is entirely different, and I like your idea about charity.... I'd like to see something like extracting gains from bogus parents forcibly. Of course the legal implications and unintended consequences of such a "law" are mind-numbing, but....it's fun to wish for justice even if we're unlikely to get it in this crazy world.
[ reply to this | link to this | view in thread ]
Re: Re: Why - why not
[ reply to this | link to this | view in thread ]
Re: Re: Re: Re: Re: Troll Settlement Recouping
[ reply to this | link to this | view in thread ]
Re:
[ reply to this | link to this | view in thread ]
[ reply to this | link to this | view in thread ]
Re:
No, this isn't a case of someone being weak, or dumb, or feeble, it's a case of Newegg being a bigger bite than this patent troll could chew.
[ reply to this | link to this | view in thread ]
Re: and that customer is me....
Congratulations Newegg, you just earned all of my computer hardware business.
[ reply to this | link to this | view in thread ]
Re:
If you really believe your patents are valid, Mr. Patent Troll, then you should have no problem with that. If you won't accept that as part of the settlement agreement, then you really don't believe in the strength of your patents, and you are signalling to me that I should fight rather than settle.
[ reply to this | link to this | view in thread ]
Did Amazon pay Neweggs legal fees?
No!
Then Screw'em.
[ reply to this | link to this | view in thread ]
Newegg; great company, awesome tech support, customer service, and prices.
Newegg.com - patent troll beat down specialists :)
[ reply to this | link to this | view in thread ]
Re:
I wonder if law enforcement has ever audited these E Texas judges' finances? By now they must have many millions stashed away from "supporters" grateful for their supernatural level of reptilian ignorance.
[ reply to this | link to this | view in thread ]
Re:
[ reply to this | link to this | view in thread ]
Re: Re: Re: Re: Re: Troll Settlement Recouping
Now, if it was treated like this, the money would have to go to the one who originally paid the extortionists, as otherwise you'd have judges deciding on a whim where millions of dollars were going, but that seems like a small price to pay to stomp out the trolls.
As a further idea, and assuming it was treated this way, perhaps have the defendant's legal fees paid out from the money that's to be returned, equally, which would provide incentives for those fighting the trolls.
[ reply to this | link to this | view in thread ]
Re: Re:
If a company cannot afford to fight a troll, then they are feeble. I forgive them for paying the extortion price, as the alternative is devastation, but they're still feeble.
Every time a company pays a patent troll, they are damaging themselves in the long run, and everybody else in the short run. Paying a patent troll is an inherently selfish act.
[ reply to this | link to this | view in thread ]
Re: Re: Troll Settlement Recouping
The SHIELD act will force patent trolls to take financial responsibility for their lawsuits by allowing defendants to recoup money spent to successfully defend themselves against frivolous lawsuits.
I just created a petition on whitehouse.gov to urge the Congress to pass this act. In order for the White House to respond to this petition we need collect 100,000 signatures (the threshold has been increased recently) in 30 days.
Following are the information for the petition:
Title: Pass the SHIELD Act to protect American technology companies from frivolous patent lawsuits
URL: http://wh.gov/V9O7
[ reply to this | link to this | view in thread ]
Re:
[ reply to this | link to this | view in thread ]
Re: Re: Re: Re: Troll Settlement Recouping
All the money they won is gone, one way or another. Either it was paid to the lawyers and expenses for later cases, paid out to "investors" or has been funneled through many shell corporations and is effectively untraceable as far as the law is concerned. This is nothing new - whether it is for tax evasion, money laundering, or structuring expenses so studios don't need to pay royalties, all you need are a few ethically lacking lawyers and accountants to hide money beyond the reach of retrieval.
[ reply to this | link to this | view in thread ]
Please forward your payment to Mr Want Uma-nie
[ reply to this | link to this | view in thread ]
[ reply to this | link to this | view in thread ]
Better lawers
[ reply to this | link to this | view in thread ]
Good job newegg!
So good on you Newegg, I still won't be sending you money though :(
[ reply to this | link to this | view in thread ]
Re: Re: Re: Re: Why - why not
In the long run it is basically a huge disincentive to the filing (and more especially the enforcement) of bad patents!
[ reply to this | link to this | view in thread ]
http://www.soverain.com/pdf/patents_found_valid_and_infringed.pdf
As in most cases, trolls(or those who exhibit trollish behavior) never learn.
[ reply to this | link to this | view in thread ]
Re:
Soverain Software currently owns a portfolio of more than 50 issued and pending U.S. and international patents. Many of these patents resulted from Open Market’s pioneering research and development, and date back to applications filed in the 1993-1995 timeframe.
Among the technologies addressed by this portfolio are:
Internet-based systems for making secure payments
Online purchasing methodologies
Online shopping cart system
Online advertising creation and product fulfillment
Online customer service
Hypertext-based linking and authentication
Multi-merchant/-site transaction processing and order fulfillment
Session management in the stateless environment of the Internet
Mapping telephone numbers to URLs - Doesn't Apple have this one in the bag already???
[ reply to this | link to this | view in thread ]
Re: Re:
[ reply to this | link to this | view in thread ]
Re: Re: Re: Re: Re: Re: Troll Settlement Recouping
As someone who used to work for a federal district court judge, I say this: fuck you, you don't know what you're talking about. Judges work very hard and do their very best in trying to decide the cases before them correctly. The very idea that judges decide cases based on whimsy is completely wrong and insulting.
[ reply to this | link to this | view in thread ]
Re: Re: Re: Re: Re: Re: Re: Troll Settlement Recouping
What I was trying to say is that, in a hypothetical system like the one that was described, where a judge was able to determine where the recouped money retrieved from a patent troll went, without guidelines that either mandated it go back to the original company, or specifically listed a set of charities that the money would be sent to, it would basically fall down to the judge as to which 'charity' the money was going to, hence the 'on a whim' bit, as I'm sure which charities were considered 'more important' would vary between judges.
[ reply to this | link to this | view in thread ]
Re:
So this way if Company A pays up, then Company B fights and wins and the patents are declared invalid, Company A has grounds to sue the troll for compensation. Of course they'll never get back the full amount they paid up as they'll have to shell out some cash for lawyers and stuff, but in the end it'll be another cost for the troll.
[ reply to this | link to this | view in thread ]
Add Your Comment