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Author Topic: Story of how NewEgg Defeated a Patent Troll  (Read 4224 times)

mouser

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Story of how NewEgg Defeated a Patent Troll
« on: January 28, 2013, 10:04:05 PM »
This is a wonderful, heartwarming story about how online computer hardware retailer NewEgg fights back and destroys patent trolls who routinely get away with bullying and extorting money from businesses under the guide of legal threat.

NewEgg has long been a fantastic website to buy computer products from (and find product ratings by informed technical users) -- but this article casts NewEgg in a whole new light -- as a company with a personality and a fighting spirit.

Quote
.. it's a huge validation of the strategy the company decided to pursue back in 2007: not to settle with patent trolls. Ever. We basically took a look at this situation and said, 'This is bullshit,'" said Cheng in an interview with Ars. "We saw that if we paid off this patent holder, we'd have to pay off every patent holder this same amount. This is the first case we took all the way to trial. And now, nobody has to pay Soverain jack squat for these patents.


Nice part on page 2:

Quote
Ars: Why is Newegg able to pursue this strategy where other companies feel they shouldn't or can't?

We're majority-controlled by an extremely principled guy, our founder [Newegg CEO Fred Chang]. We have always been willing to sacrifice tactical gain for strategic success. We're successful because, since 2001, we have taken really good care of our customers.

Also, a lot of our systems are homegrown. Our CTO [James Wu, who testified at trial] wrote this code from complete scratch, without knowing about these patents or anybody else's. His approach to coding is different. In the Soverain case in particular, it gave us a tremendous advantage in being able to explain that we didn't infringe. Our shopping cart is architected differently.

And we'll take a case through trial as a matter of principle because we want to accomplish the purpose of making good law. Like eBay did, like Quanta did when they challenged LG. It's part of our duty as a good corporate citizen to try to accelerate the rationalization of patent law.

Paul Keith

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Re: Story of how NewEgg Defeated a Patent Troll
« Reply #1 on: January 28, 2013, 11:10:57 PM »
This part is crazy:

Quote
So the case filed against Newegg and seven other retailers was closely watched. It went to trial in 2010 with Newegg as the only remaining defendant; all the other companies settled. It was a classic East Texas-style trial; a jury was picked on Monday, and the case wrapped up by Friday morning.

f0dder

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Re: Story of how NewEgg Defeated a Patent Troll
« Reply #2 on: January 29, 2013, 06:12:20 AM »
Damn, company's got some balls!
- carpe noctem

40hz

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Re: Story of how NewEgg Defeated a Patent Troll
« Reply #3 on: January 29, 2013, 07:27:33 AM »
A lesson about taking buses that businesses could apply to dealing with patent trolls:



 8)


tomos

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Re: Story of how NewEgg Defeated a Patent Troll
« Reply #4 on: January 29, 2013, 08:31:43 AM »
^ that was fun 40 ;D
and a good suggestion too :up:
Related
I was talking to someone yesterday about how people act in different countries/cities when wanting to cross the road. In Istanbul (they were saying) when there's enough people wanting to cross, they will move en-masse onto the road. Where one individual would almost certainly be killed, cars will stop for the group. Apparently this isn't planned - it's sort of like a collective consciousness kicking in where everyone just senses the force building and that the time to cross is ... *now* :-)



Damn, company's got some balls!
+1
nice to see someone (anyone!) in a big organisation *not* working from a position of fear.
Tom

TaoPhoenix

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Re: Story of how NewEgg Defeated a Patent Troll
« Reply #5 on: January 29, 2013, 08:32:54 AM »
I dunno, without trying to be all "Tinfoil Hat", there's something creepily missing here. What should be the downside of these patent trolls is when one twerpy little outfit consisting of 5 lawyers and an office building takes on ... Amazon? Victoria's Secret? Avon?

"Victoria's Secret and Avon. Those two companies were ordered to pay a total of almost $18 million, plus a "running royalty" of about one percent, after a 2011 trial. The ruling in the Newegg case is a total wipeout for a patent troll that had squeezed many millions from online retailers, was backed by big-firm lawyers, and was determined to collect hundreds of millions more."

Impudent little nobodies are supposed to get squashed by those guys. Instead they settled...??! Is THAT the new way to study law? Because the cost of losing *that verdict* is made up by over-reaching patent claims that the big companies have elsewhere? And that if they "showdown" that particular troll, then that's one step towards the Emperor's New Clothes?

So NewEgg gives Avon + V. S. an 18 million Christmas present, and they don't get a card and a thank you?

My rusting gamer sense is going haywire.  >:(


Darwin

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Re: Story of how NewEgg Defeated a Patent Troll
« Reply #6 on: January 29, 2013, 08:58:19 AM »
These a$$holes (patent trolls) should be shot, pissed on, drawn and quartered, burned at the stake, and flayed alive publically. I loathe them (if anyone failed to get that from the foregoing)  >:( Yeah! Newegg!

Thanks for the post mouser  :Thmbsup:
"Some people have a way with words, other people,... oh... have not way" - Steve Martin

wraith808

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Re: Story of how NewEgg Defeated a Patent Troll
« Reply #7 on: January 29, 2013, 10:20:08 AM »
So NewEgg gives Avon + V. S. an 18 million Christmas present, and they don't get a card and a thank you?

It's just easier to settle- although you're setting precedent.  Which makes Newegg even more of a hero.  But yeah, the others are so big that 18 mil was nothing- to pay, or to save.

40hz

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Re: Story of how NewEgg Defeated a Patent Troll
« Reply #8 on: January 29, 2013, 02:29:58 PM »
What's critical now is that those who have settled sue to get their money back since it's been established that the patents that they based their settlement offers on were invalid to begin with. It's not enough to stop paying. You have to bring it right back to the troll's front door or it will never end. Because right now there's very little downside for these trolls. If they lose they simply walk away most times. And that's that - until next time.

The time has come to hit these people back with the same tools they employ. Argue that they knowingly misled the courts. Challenge their character. Initiate action to have them disbarred. Counter sue them - and in multiple widely separated jurisdictions. Go after each of their attorneys individually as well as their parent firm.

Amazon et al have vast resources and financial reserves. Which gives them the upper hand should they go on the offensive. Especially if they pool resources and set up a huge well-funded membership association that deals with patent trolls and lobbies very hard for political reforms. (And which doles out its campaign contributions accordingly. Since it's obvious by now our politicos need to be bought, lets stop beating around the bush about it. Why should special interest lobbyists have all the fun?)

And then make it even better by having this association offer IP lawsuit insurance to its members. So next time a troll comes knocking, it won't be confronting a single company's financial and legal muscle - it will be going up against a mega law firm with infinite financial resources and legal talent that has no intentions of ever settling with a troll. And furthermore, has every intention of pursuing the troll for all eternity to obtain remedies once they lose?

Care to guess which side will run out of energy and money first?

The time has come to make it dangerous to be a troll.

Let's hope every legitimate business soon commits to making it so. 8)


wraith808

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Re: Story of how NewEgg Defeated a Patent Troll
« Reply #9 on: January 29, 2013, 02:38:04 PM »
Let's hope every legitimate business soon commits to making it so.

We can hope... we can dream.  But yeah... I doubt it will happen, for the same reason that they just settled initially.

40hz

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Re: Story of how NewEgg Defeated a Patent Troll
« Reply #10 on: January 29, 2013, 02:44:14 PM »
I think they settled because they didn't want to be distracted from running their businesses - so it made some financial sense to settle. Maybe.

But with a 'champion' sitting on the sidelines that you can just hand it off to, it suddenly makes quickly settling less of an operational necessity.

Or so it would seem to me. ;D

wraith808

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Re: Story of how NewEgg Defeated a Patent Troll
« Reply #11 on: January 29, 2013, 03:38:18 PM »
Well, it's going to cost money to make money.  And it's probably going to be appealed.