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Newegg sues patent troll that dropped its case
- yati 11y ago> "...Now that they have started the litigation, it would be irresponsible for Newegg to not finish it." Cheng is a badass :)
- leeoniya 11y agoglad to see this is where the delta between amazon and newegg pricing goes.
- blahedo 11y agoI just bought a bunch of parts and I got them all from newegg, specifically in support of them fighting the good fight on patent trolls. In nearly every case, newegg was a little more expensive than at least one other supplier—but not by very much, and totally worth it. (Nice side benefit: ordering all the parts from one place meant the orders were aggregated into less deliveries....)
- re_todd 11y agoI haven't ordered from newegg in a couple years, but this will motivate me to start buying from them again.
- sethbannon 11y agoCould be an interesting tactic to increase the costs of patent trolling. No longer is merely dropping a lawsuit when a company pushes back a way out -- now the patent trolls also have to deal with a separate litigation in a far away jurisdiction. I hope we see more of this.
- gcampos 11y agoIs not the first time newegg goes after patent troll. I think what they are doing is amazing, but unfortunately a lot of small companies don't have the resources to do the same
- _ikke_ 11y agoI think that's why Newegg is doing this. They try to invalidate the patents of patent trolls so they can't abuse them against smaller companies.
- EvanPlaice 11y agoWhy spend money on marketing when you could spend that on legal defense and receive an endless stream of good will and positive publicity? Technically inclined customers are inevitably the ones who sell NewEgg to non-technical users because non-technical users will look to ghe technically inclined for advice when they are out of their depth. We love the site for it's accurate and in-depth user reviews. We love them for fighting patent trolls and standing up for the little guy trying to build a product. The little guy that many of us aspire to be one day. Being slightly neurotic and overly-excitable about the technical things we like, we can't help ourselves but to share that info with anybody/everybody within earshot. Traditional marketing has a deterministic half life dependent on the length of people's attention span; which is growing shorter with every tweet, instagram photo, FB post, etc. That's why it's so damn profitable. The more marketing materials sold, the more marketing materials will be needed to remain competitive. NewEgg is the 'real deal'. They stand up for the tech community against greedy abusers of legal policy. Whatever goodwill and success they receive as a result of it, they've earned.
- jasonjei 11y agoExactly. The way I see it is these patent trolls are sandbox bullies. Newegg's suing back is a genius move. It basically sends the message that if you're going to make a frivolous claim and decide to abandon it, we'll file suit and stop you from making further claims (hopefully setting a case law precedent), and we won't even ask for our time/money back.
- ptaipale 11y agoThat is admirable, although it must feel like fighting the Lernaean Hydra.
- morninj 11y agoBut Newegg isn't suing to invalidate the troll's patents. Newegg is asking for a judgment saying that Newegg hasn't infringed the troll's patents.
- hellofunk 11y agoThis is very delightful to read. I can imagine the casual off-the-cuff remark that one of Newegg's lawyers made over coffee one morning when they heard the news that their adversary had dropped the case.. "ha ha, they didn't know what they were in for, no wonder they pulled out... (pause, and a sip of coffee).. heck, we should probably just sue them for dropping the case." laughs all around the table... then, everyone silently staring at each other.
- achow 11y agoAgree, very delightful! However, the backstory is little more calculative.. "Newegg Chief Legal Officer Lee Cheng says the move is necessary since Minero dismissed its Texas lawsuit without prejudice, meaning it can refile the case at a time of its choosing. Cheng noted that Minero continues to litigate against other retailers that sell Rosewill-branded products and that Newegg may have defense obligations to those other companies. Minero continues to press its case against more than 20 companies, with the defendants including Office Depot, Walmart, and Amazon—three big retailers that sell Rosewill products. Newegg's lawsuit asks only for a judicial ruling of non-infringement, not money damages..." http://arstechnica.com/tech-policy/2016/01/newegg-sues-patent-troll-that-dropped-its-case/ http://arstechnica.com/tech-policy/2016/01/newegg-sues-paten...
- hellofunk 11y agoI don't believe it. My dramatization of that moment in time is much more movie-accurate, and therefore, much more believable.
- chris_wot 11y agoAlso, Newegg have always stated they would fight every single patent case to the death. And they haven't just stated that, they've gone ahead and done it. That's actually not only awesome, but smart. You do not want to sue Newegg for patent infringement. Notice how fast that company dropped their patent suit? Unfortunately for them, Newegg never, ever gives in. Ever.
- kelukelugames 11y agoA few news articles say Minero Digital is a shell for Intellectual Ventures. Can someone please help confirm?
- ascorbic 11y agoAccording to this, IV transferred the patent to Minero in April last year: http://arstechnica.co.uk/tech-policy/2015/09/nest-ceo-and-ex-apple-star-are-inventors-in-patent-troll-suit-over-usb/ http://arstechnica.co.uk/tech-policy/2015/09/nest-ceo-and-ex...
- a_e_k 11y agoInteresting. I never knew that Rosewill was their house brand. Makes a lot more sense seeing all their products there and gives me a bit more confidence in buying Rosewill in the future.
- spb 11y agoReally? I know you can buy Rosewill on Amazon.
- notnarb 11y agoSecond sentence in the article: > ... dropped its East Texas lawsuit against Newegg subsidiary Rosewill ... And later on: > Beyond the possibility of being sued again, Cheng noted that Minero continues to litigate against other retailers that sell Rosewill-branded products and that Newegg may have defense obligations to those other companies.
- mywittyname 11y agoNewegg sells and advertises on Amazon, from what I recall.
- annnnd 11y ago> I never knew that Rosewill was their house brand. Apparently, neither did troll. ;)
- sixQuarks 11y agoNewegg, fighting the good fight. I try to buy all my computer products from them.
- mc32 11y agoSpeaking of, what if they put up a check box at checkout where buyer could opt in to donate amount X or percentage of their total Y and let that go into a general "fight patent trolls fund". Even get other sellers to join "the consortium" --with oversight, of course.
- EvanPlaice 11y agoPlease don't. The last thing we need is someone to get the idea that we need more dedicated non-profits to fight tasteless legal battles. Supporting their business is a better option in the long-run. Hopefully, their success will signal to other companies; going out of your way to do the right thing is a good business strategy.
- mc32 11y agoMy thought was that a united front would pose a disincentive for trolls to think of launching patent attacks against weaker players who don't have the resources a NEgg has.
- EvanPlaice 11y agoIn principle, I wholeheartedly agree. In a perfect world that would be a great solition. In reality, non-profit groups will inevitably grow in scope relative to the ambition of its leaders and/or accessibility to easily acquired sources of funding. At some point the organization will grow the the size where it'll have to seek funding via membership dues and/or direct sponsorship. The 'we stand up for the little guy' will become a marketing facade to justify the organization's existence. Meanwhile, membership and the protection it provides will be carefully meted out and sold to the highest bidder. NewEgg is doing something much more beneficial overall. Instead of building alliances and hedging resources for an impenetrable defense. They're saving all that wasted effort by going on the attack. They accepted a much greater degree of risk at the start but legal policy is relativistic. The more they win, the more they will win because they can use the outcomes of prior casses to support their arguments. In a way, their success is literally writing the future law of patent litigation and filling in all the gaps that the trolls have been aggressively exploiting for years.
- outworlder 11y agoWell, if that's a publicity stunt, it totally worked with me. I'll search Newegg before Amazon now.
- chjohasbrouck 11y agoI'm not a lawyer, but my understanding of patent trolls is that they make all their threats and legal actions through shell companies they can light up and shut down for a few hundred dollars. How much good does it do to go after them? Is Newegg piercing the corporate veil, or are they just trying to invalidate patents? Aren't there tens of thousands of bad patents? Wouldn't it cost billions to invalidate them all, and by the time you were done there'd just be another ten thousand new ones? I think what they're doing is great, but I just wish it wasn't so sacrificial. Does it make economic sense for them to do this? As long as it doesn't, the primary focus should be on legislation.
- bdcravens 11y agoThey're trying to get invalidation of patent on record. And it does make sense, as plaintiff can refile (ostensibly after they sue a few others and get precedent in place)
- ryporter 11y agoI agree that invalidating the patent is a strong motivation, but I imagine that another major motivation is in establishing their reputation. Future putative litigants will think twice about getting dragged into a legal battle with a company that doesn't let them walk away from a battle when it no longer suits them.
- morninj 11y agoWhere do you see Newegg asking for the troll's patent to be invalidated?
- bdcravens 11y agoJust responding to question of motivation.
- klochner 11y agoIn addition to being aligned with business strategy, this is a great recruiting strategy as well. I'd be giving Newegg a call if I were a patent attorney looking for my next gig.
- bronson 11y agoHow the heck does a weak patent filed by General Magic end up at a patent troll?
- ksherlock 11y agoAfter General Magic filed for bankruptcy, their patents and other assets were auctioned off. (To Intellectual Ventures via Paul Allen). IV then sold or rented it out to the patent troll. (IV protests their hands are clean but won't say why or how their patents end up with trolls).
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- netcan 11y agoMy bias is that I think patents are over-used, over-granted & over-litigated. I think the system is fundamentally broken in favor of incumbents, lawyers, the wealthy. Between the brokenness of the systems these days, and some fundamental mistakes in original the assumptions about what a patent system would do, I think it makes a mockery of the stated intention of patents, to promote innovation. On patent trolls, I think they're an ugly boil that pops up when the underlying system is bad and the running of that system is worse. So FWIW.. I have an opinion going in. Disclosed. All that (verbosely) said, I can't join into the delighted cheering wen I hear about a broken and unfair legal system where "my" side is getting the better of it. This whole system of cherry picking courts, maneuvering, intimidation… When the normal legal strategy is to bury the opponent in legal bills for years while psychologically piling on weight via drawn out legal processes, we (anywhere, I'm not american) do not have a judicious legal system. It's not fair. It's not justice. It's not doing a good job and it's there for lawyers and their wealthy clients. Newegg might be in the right, but that's not why they're winning. They have more money, or better lawyers or whatnot. What if you don't have the money, disposition or bad ass legal team to fight back, in a bullshit rules fight? I'm offended.
- lukasm 11y agoPart of the problem is lack of English rule. https://en.wikipedia.org/wiki/English_rule_(attorney%27s_fees) https://en.wikipedia.org/wiki/English_rule_(attorney%27s_fee...
- chillydawg 11y agoIt's not that much better in London. Just older buildings, more wigs and less obvious corruption.
- sokoloff 11y agolukasm is presumably referring to the "loser pays" aspect.
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- PhasmaFelis 11y agoWhy is Newegg the only company I've ever heard of in any industry that does this? I know small companies can't afford it, but there are a lot of companies bigger than Newegg. Obviously it costs money in the short term, but the benefits in the long term seem clear enough.
- dizzystar 11y agoRackspace comes to mind.
- rhino369 11y agoNewegg gets sued more than most companies because it's the big seller of imported products made from companies with no US presence. Since you can sue newegg instead that is a bigger target. Most midsized or small companies don't get sued nearly as often. So they don't have a shot at building a reputation like newegg does. Another reason is that Newegg is mostly targeted by small trolls. You aren't going to get a billion dollar verdict against newegg. They don't sell enough of any one product for that. So newegg has leverage too. The trolls don't want to go to trial blow a million dollars on legal fees then win 500k in damages. But trolls are willing to trial for a 20% shot at a 200 million dollar verdict against Apple or intel. And Apple and Intel aren't willing to risk a trial with a 20% chance of 200 million loses if they get a settlement offer for 10 mil. But companies like Apple and Intel do fight a huge number of troll cases. So little trolls with shit patents don't go after the big dogs. They know they'll lose. Newegg just adopts a Stalingrad approach to appear like a big dog.
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- kinofcain 11y agoInteresting, if slightly irrelevant: The patent lists Tony Fadell and Steve Perlman as inventors. https://www.google.com/patents/US5675811 https://www.google.com/patents/US5675811
- danielki 11y agoThis might be a naive question, but why has there been no strong push to reform patent law in a way that eliminates non-practicing entities? It seems like it would be wise to have a law that a patent expires if the company who holds it goes a certain length of time (2 years, perhaps) without producing a product covered by the patent or transferring it to a company who does. Would such a law increase innovation (companies are more willing to build products without fear of being sued by patent trolls) or decrease it (patents being less valuable might decrease R+D investment)? My hunch is that it would increase innovation, but I'm not completely sure.
- ogreveins 11y agoOne reason is that an organization of lawyers actively lobbys (lobbies?) for things to not change. It's a revenue stream. That's not the only reason but it's definitely a big one.
- kllrnohj 11y agoThe claim is that it would hurt small investors as they start out life as a non-practicing entity. Which is really what patents are for, to give the inventor time to become a practicing entity before a large company can copy it. Just that the world doesn't work like that anymore, and patents are now abused by large companies to hurt the little guy.
- lytol 11y agoIANAL but my understanding is that patents cover the implementation not the idea. If you aren't capable of practicing (yielding the product), you probably shouldn't be holding/filing a patent.
- kllrnohj 11y agoLet's say you invent a doodad in your garage. You have the implementation, you have a working device, but you don't (yet) have a product you can sell. You are unlikely to be setup to manufacturer this, so you'll you need to find a partner to produce that doodad. Patents protect you during this process, so that a manufacturer can't just go "oh cool we'll not pay you and instead just go do this under our house brand without you" At least that's the theory. The reality is it's increasingly unlikely you'll be able to invent anything physical by yourself in a garage anymore in the first place and things like software have no barrier to mass distribution like physical goods do.
- gist 11y ago> Newegg Chief Legal Officer Lee Cheng says the move is necessary since Minero dismissed its Texas lawsuit without prejudice, meaning it can refile the case at a time of its choosing. To me this sounds like self justification by the legal staff at Newegg. Most likely the troll is away for good. If they come back at that point engage legally with them. There is a cost to any litigation and this could also backfire. A troll who comes after them and knows that they sue even when a case is backed away from (regardless of prejudice) will be less likely to drop the case at that point. The other side to this of course is the hope that the troll won't defend the suit so they have bought themselves some insurance. However it's unclear exactly why that matters if the probability of the troll returning is low. Why would they return? Why not just go after an easier target? Newegg has already proven their point.
- tyree732 11y ago> A troll who comes after them and knows that they sue even when a case is backed away from (regardless of prejudice) will be less likely to drop the case at that point. Perhaps, but it also serves to deter future trolls from engaging Newegg in court over patents. Newegg is making it clear that if you sue them over a patent, that suit is going to be taken to a verdict, whether you like it or not.
- wavefunction 11y agoBetter to kill the troll permanently than hope for the best.
- mizchief2 11y agoGood job Newegg, route those MFer's!
- ryandrake 11y agoRemember, the patent system can only be abused if people participate in it. I hope nobody here cheering for Newegg has benefited from their company's "patent award" system (which many companies have, where they pay you a small bonus for every patent you help the company get). You can't claim that software patents are bad while getting paid for helping to write them.
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