from the a-win dept
Among the worst of the worst patent trolls out there, Macrosolve had quite a reputation — described as “worse than Lodsys” it took a sue tons of companies first, demand settlements later approach, based on an obviously ridiculous patent (7,822,816) for a “system and method for data management” that the company insisted, hilariously, covered any mobile app that used online forms where users could submit data. Yes, forms. For a patent filed in 2003 and granted in 2010. In a bit of a “cute” move, the company tried to pretend it wasn’t a troll by doing a deal with… Donald Trump, which apparently suckered some in the press to claim that it wasn’t a troll.
But it is a troll, and ended up filing over 75 lawsuits in (of course) the eastern district of Texas, following up the lawsuit filings with demands for licenses. In typical troll behavior, it made the licensing terms much cheaper than actually fighting the lawsuit (even if one were to win), so nearly all of the companies sued sucked it up and settled. However, Macrosolve included electronics retailers Newegg in its bundle of lawsuits, and, as we’ve noted in the past, Newegg has taken a clear “screw patent trolls” stance, where it absolutely refuses to negotiate with trolls.
Newegg has announced today, somewhat gleefully, that when faced with actually having to go to trial, Macrosolve has “folded like a cheap suit” dismissing its lawsuit against Newegg (and Geico, the one other company who fought back).
Lee Cheng, Newegg’s Chief Legal Officer stated, “In a sense, we are disappointed because we were robbed of an opportunity to prove in court that Macrosolve was and is nothing more than a serial, shameless abuser of patent rights, with a poor-quality patent that has not even survived its first reexamination. Macrosolve failed to create products and services that real customers found valuable, whose principals decided to turn it into a corporate parasite. It is not a coincidence that faced with its first real opposition in Newegg and Geico, Macrosolve folded like a cheap suit, and dismissed its lawsuits against all defendants.”
Cheng continued, “I could never figure out how Macrosolve would not be required to publicly and timely disclose the fact that its primary asset, the ‘816 Patent,’ was the subject of a final rejection in reexamination or that it dismissed almost all pending lawsuits with prejudice. What was most bizarre was how Macrosolve’s stock price traded up the day that the USPTO issued the final rejection of the ‘816 Patent’. Curious. Definitely worth someone’s attention.”
Yes, Macrosolve is a “public” company, in that it’s an over-the-counter penny stock, so not only was the company looking to abuse the patent system to cash in, it appears that perhaps it was abusing the public equity markets as well. Either way, by demanding much less than it would cost to fight it in court, the company took in at least $4 million in settlements. Newegg is hoping to get back some of its own costs, though it expects Macrosolve to do everything possible to avoid that:
Newegg intends to seek all of its fees and costs against Macrosolve for its abusive litigation tactics. However, it is highly likely, in yet another example of how the patent law system is unfairly tilted against defendants, that even if Newegg were to prevail in court in its fee motions, that Macrosolve will simply file for bankruptcy after collecting and distributing over $4M in “licensing” revenue to its principals and its contingency fee lawyers.
Congress is, once again, promising to pass new legislation to stop patent trolls, and here’s yet another example (in a very long list of them) why help is needed now.