Insanity Rules In East Texas: Jury Finds Newegg Infringes On Ridiculous Encryption Patent

from the why-trolls-love-east-texas dept

There's a reason why patent trolls love east Texas -- and big part of that is that the juries there have a long history of favoring patent holders, no matter how ridiculous or how trollish. That was on display last night, when the jury in Marshall, Texas sided with patent troll Erich Spangenberg and his TQP shell company over Newegg. As we've been describing, Newegg brought out the big guns to prove pretty damn thoroughly that this guy Mike Jones and his encryption patent were both not new at the time the patent was granted and, more importantly, totally unrelated to the encryption that Newegg and other ecommerce providers rely on. Having Whit Diffie (who invented public key cryptography) and Ron Rivest (who basically made it practical in real life) present on your behalf, showing that they did everything prior to Jones' patent, while further showing that what Newegg was doing relied on their work, not Jones', should have ended the case.

But, apparently TQP's lawyers' technique of attacking Diffie's credibility somehow worked. The jury said both that the patent was valid and that Newegg infringed -- and they awarded TQP $2.3 million -- a little less than half of what TQP wanted, but still a lot more than TQP settled with many other companies (including those with much bigger ecommerce operations than Newegg). In other words, yet another travesty of justice from a jury in east Texas. Newegg will appeal, as it did in its last big patent troll lawsuit (which was much bigger), against Soverain Software. Again, Newegg had lost in East Texas, but prevailed big time on appeal. Hopefully history repeats itself.

Joe Mullin's coverage (linked above) has a bunch of little tidbits about how everyone responded to the verdict, but I think Diffie's response is the most honest. Asked how he was feeling:
"Distressed," he said. "I was hoping to be rid of this business."
Yeah, he's not the only one. The sheer ridiculousness of a jury simply not believing the very people who created the very building blocks of modern encryption, and instead buying the story of someone who did nothing special either with the concept behind his patent or with that patent once it existed, is just distressing. It shows how arbitrary jury trials can be, especially when you have jurors who simply don't understand the technology or the history at play. Blech. I think I may have to go buy an anti-patent troll t-shirt from Newegg.

Filed Under: cryptography, east texas, erich spangenberg, marshall texas, patents, whitfield diffie
Companies: ip nav, newegg, tqp

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  1. icon
    Not That Chris (profile), 26 Nov 2013 @ 7:46am

    What's with East Texas

    I'm sure this has probably been addressed somewhere before, but I'm a lazy internet user and expect things spoon fed to me:

    What is the reason behind East Texas being so patent holder friendly? Has anyone looked into why juries there so often side with the patent holder, even when, as with this case, its blatantly obvious the patent is invalid? Are there a lot of patent holders who end up on the juries there, so they're pretty obviously going to side with the patent holder (which would seem like a conflict to me)? Is it just a "screw the big guy, save the little guy" mentality? Are we seeing the same handful of people on each jury that sway the rest of the jury (not necessarily saying they're a plant, but if the jury pool is small enough...)? There has to be something special about the people there or the water or something that makes this place such an obvious patent haven that everybody wants to file there, but what is it?

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