15 ms·

Patent troll tales: Lee Cheng, Newegg

311 points by izqui 10y ago

izqui 10y ago
We had the pleasure to interview our advisor Lee Cheng on his experience fighting trolls. If you have any questions or comments let us know and we will put them his way!
- beastie29a 10y ago
  Does Lee agree that the US patent system is flawed and if so what would be a good way for people to get involved to promote reform?
  - chii 10y ago
    write letters to your senator. Done enmass, this can really change their mind - if they see their electorate care, they are going to add the angle to their campaign. Make sure you vote, and also remember, democracy is slow and painful.
- _rpd 10y ago
  What could a fair system for rewarding inventors and patent owners look like?
  - proksoup 10y ago
    In my mind, the most fair would be something that didn't grant a monopoly on an idea to one player. I don't think rewarding patent owners is a goal, except that we already decided the way to reward inventors was patents and selling them (perhaps to those that can realize the value better, build a product and market it etc). My question is where are the inventors that want a patent system of any sort? I was under the impression that patents are a tool for lawyers and wealthy corporations to collect fees and maintain monopolies respectively. What inventor wants to patent their idea and why do they want to do such an awful thing?
    - rayiner 10y ago
      > My question is where are the inventors that want a patent system of any sort? I spent the early part of my career at a startup working on cognitive radio technology. Basically, algorithms to allow radios to use spectrum opportunistically, and to allow networks of such radios to maintain connectivity while dynamically changing radio channels. Like everyone else in that field, our company patented its inventions. It's expensive paying roomfuls of PhDs to work on network algorithms. At the same time, cognitive radios are not a consumer product you can launch overnight to a billion people. It's not a market where first-mover advantage or network effects have any value. It's not a market where you can hide your "secret sauce" behind a web API. In fact, you usually have to deliver source to your customers. It takes years to get into the market, and competitors waiting for you to do all the work and reverse engineering your design would eliminate any possible return on investment. Moreover, as a startup we had no expertise in manufacturing radios. Nor did it make any sense for us to get into that business--there are tons of companies that have the manufacturing expertise to build those radios. We could never compete with them on that front. The idea was always to develop the technology, then sell it to someone whose expertise was building radios.
    - _rpd 10y ago
      > where are the inventors that want a patent system of any sort? To me, this parallels the question: where are the artists that want a copyright system of any sort? The consensus seems to be that automation will abolish most drudgery over the next few generations. Won't the succeeding economy be founded exactly on creative and inventive intellectual labor? The intellectual property system as we know it may not be the mechanism to support it, but it seems like there should be some way of identifying and rewarding creators and inventors.
    - manarth 10y ago
      A patent is a time-limited monopoly, granted as recompense for publishing the details of their invention. Inventors can profit from their invention by selling products, and keeping the invention details a Trade Secret. For example, Coca-Cola is protected as trade secret, rather than by patent. Naturally this is less useful for something that can be reverse-engineered fairly easily, like, say, something in tech. What inventor wants to patent their idea and why do they want to do such an awful thing? These days, I think it's mostly out of fear of being sued by another patent-holder. Companies often stockpile patents to maintain the deterrence of Mutually Assured Destruction.
- zodiac 10y ago
  What makes going to court on patent cases so expensive?
  - deleted 10y ago
    [deleted]
  - talmand 10y ago
    Hourly billing.
- bisRepetita 10y ago
  I'd like to know how he financed the court fights. All from NewEgg profits? Did they manage to get financial contributions from other companies that had a vested interest in fighting the trolls?
jobu 10y ago
They will tell you, “you know the cost of litigation is this number”. Which I unfortunately know the cost of litigation is like that. “All we are asking for is a percentage of that cost and then the risk of punitive damages will go away” It still amazes me that extortion via lawsuit is legal.
- steveeq1 10y ago
  I know lawyers who do this on a regular basis and they, amazingly, think of themselves as good people. They even go to church, amazingly enough. I guess my point is never underestimate "incentive-caused bias"
  - izqui 10y ago
    The curious thing is that patent trolls exist at all because lawyers are so expensive. The reason almost no company can afford to fight patent trolls is because the legal costs are so expensive. On a related note, I also find it incredible how people can make a living out of these kind of businesses and sleep well at night...
    - Phemist 10y ago
      >> On a related note, I also find it incredible how people can make a living out of these kind of businesses and sleep well at night... What we do is legal, therefore it is not unethical; if it were unethical, it would be illegal.
      - Ar-Curunir 10y ago
        Legality != Morality. Some of the NSA surveillance is legal; that does not make it ethical.
        jessaustin 10y ago
        The word "legal" is sort of meaningless for behavior that is never observed by legal authorities. Also, see irony.
fosco 10y ago
Thanks for sharing this!! I like --> "Execution is the most critical element to success." time and time again in high stress environments I see that there are people able to continuously execute and implement and those who tend to freeze or request help. I think thriving under pressure is critical as well.
2bluesc 10y ago
All the more reason to shop more at NewEgg.
- Bartweiss 10y ago
  Their prices are usually quite close to Amazon, and for me it's worth just sticking to NewEgg to reward their customer service and anti-troll work.
  - ansible 10y ago
    I'm shopping on Newegg because most other websites have awful category and filtering capabilities. Edit: But yes, their anti-patent troll activities are something I appreciate.
    - Bartweiss 10y ago
      One of the beauties of a niche site like Newegg is that they actually understand which products are interchangeable or related. If I search for USB splitter by price on Amazon, I'm going to get flash drive cases, then USB cables, then flash drives, then I'll get into splitters. Newegg knows I didn't mean that, and that "products like this" shouldn't include everything with a USB connector on one end.
      - degenerate 10y ago
        That's a great point, I never thought of searching for accessories on Newegg... even if I end up buying elsewhere, their accessory/peripheral search has always been one of the best on the internet for a long time.
        Bartweiss 10y ago
        I only noticed it when I tried Amazon and got slammed with a hundred pages of "it has a similar name!" matches. You can buy a laptop there fine, but peripherals and internals just aren't arranged in any coherent way. I'm not sure what Newegg is doing (apart from specializing), but it works damn well.
ultramancool 10y ago
Isn't the whole point of Musk opening Tesla's IP to be able to sell more batteries? It's not charity, it's a business strategy.
- Flimm 10y ago
  Nobody said it was charity.
- deleted 10y ago
  [deleted]
- jackmott 10y ago
  That's the joke.
- PakG1 10y ago
  But it's still true that Musk believes he would out-execute anyone who takes his IP to try to copy and out-execute him, his cars, AND his batteries.
justaman 10y ago
If there was ever a time for federal intervention, this is it.
- drzaiusapelord 10y ago
  To do what exactly? The federal government created this problem with its asinine patent policies over the past few decades. Do you think all three branches of government will suddenly overhaul this because its upsetting some people in technology? Think of all the lobbying that makes sure this doesn't happen. I also think companies like Google, Apple, and MS play up the "evil patent" narrative but privately like the power their own patent portfolios have over competitors. Either as a defensive tactic or, sometimes, as an offensive one. These companies have also written the "Litigation will cost this much" letter against others many, many times. They're not against the patent system because it works in their favor almost exclusively. The exception are these patent trolls, which usually get shot down in court or get settled for a fee that's very affordable to big players. In fact, I'd go as so far to say that a lot of the press and "grassroots" anger towards patent trolls come via these companies' PR departments. They hate patent trolls but they do not want to give up on their own patent abuses and want to indoctrinate you into that belief system (Google/MS/Apple patents good, everyone else bad). I can't see any realistic reform here. Its not even an issue in this or the past few elections. I suspect this is going to be the status quo for a very long time. The system as-is serves big companies and the government.
  - izqui 10y ago
    I agree change is not coming in the political front. Lobbying power defending the patent status quo is enormous, and reviewing Patent Law isn't in any political agendas. Big tech companies take advantage of the system. Microsoft has made billions of dollars out of licensing Android related patents, Apple applied for a paper bag patent recently and Google has "patent parties" when (as I have been told by Google friends) they encourage engineers to work with attorneys in filing patents on anything they worked on that could be patentable.
    - chenster 10y ago
ikeboy 10y ago
> It is not just in this century, execution has always been king, in fact many kings have been executed by future kings. He certainly has a way with words, this made me laugh.
seibelj 10y ago
What software is even patentable anymore? Some light reading of articles and wikipedia[0] makes it appear that post-Alice Supreme Court ruling anything mathematical, or anything that is an abstract idea implemented by a computer, is not patentable. I'm struggling to think of what is left. Cryptography is pure math, as is data compression. Is a specific type of UI patentable? [0] https://en.wikipedia.org/wiki/Software_patents_under_United_States_patent_law#What_software_patents_will_survive_Alice_analysis.3F https://en.wikipedia.org/wiki/Software_patents_under_United_...
- _rpd 10y ago
  To put it mildly, the courts are still working it out. For example ... Federal Circuit: Software and Data Structures Are Not Inherently Abstract http://patentlyo.com/patent/2016/05/structures-inherently-abstract.html http://patentlyo.com/patent/2016/05/structures-inherently-ab...
- sdabdoub 10y ago
  One of the main issues is, despite that decision, the USPTO is understaffed and underfunded, so stuff will still get patented that should have no grounds for patentability.
  - sosborn 10y ago
    That doesn't make sense to me. If they are understaffed and underfunded then you would expect the number of granted patents to decrease.
    - philipkglass 10y ago
      I think the reasoning is that understaffing means each examiner can't spend as much time looking for prior art, so things might be patented that should have been rejected by a lengthier prior art search.
    - pbhjpbhj 10y ago
      The USPTO would still have an obligation to process the patent applications though. So now each patent has an average of 4h20m spent on it instead of 4h40m (some are hundreds of pages of complex concepts that potentially no one in the world has seen published before). The examiner then would be under pressure to glance over a lot of applications and just let the courts sort it out later.
fapjacks 10y ago
This is why I buy exclusively from Newegg. You can get things marginally cheaper on Amazon, but you are feeding the patent troll fighting machine when you buy from Newegg. And the costs aren't hugely more than other places. It's a few bucks here and there, and I think probably the most important few bucks people like us could spend when buying new hardware.
ke4qqq 10y ago
Good video of a presentation from Lee Cheng earlier this year here: https://www.youtube.com/watch?v=X-yUZW-v0io https://www.youtube.com/watch?v=X-yUZW-v0io
tnt128 10y ago
Wonder if it's possible to have a 'NATO like' alliance among the smaller companies that pools the resource together to fight patent trolls, and basically make it clear that these are the companies that will never settle with you, and will utilize pooled resource to fight against the patent trolls to the end.
- rosstex 10y ago
  There's the LOT Network: http://lotnet.com/ http://lotnet.com/
- oconnor663 10y ago
  We all hate patent trolls so much because there's no way to know whose patents we're violating before we get sued. But there are also cases where, whether or not we approve of the patent, everyone at least knows it exists. Like Apple patenting magnetic laptop chargers. Everyone knows that if you start selling a MagSafe competitor, Apple is going to sue you. So one of the problems you have to solve if you create a NATO-like network of companies, is that one of your members might decide they want to go up against Apple. Now your organization has to decide what counts as a "troll" case and what counts as "you should've known". And since some industries are at a higher risk of trolling than others, those more expensive members will inevitably drive out the safer members who foot the bills but don't benefit very much. So in the end you have problems somewhere in between an insurance company and...NATO :p
  - slimsag 10y ago
    But, I mean, NATO must also make very similar decisions, right? If a NATO nation gets 'attacked' by somewhat provoking a war, NATO must ultimately make some sort of decision about whether or not to jointly act (and foot the bill).
    - BanzaiTokyo 10y ago
      it is easier to determine if a country was attacked (the case of NATO) than if the petent holder is a troll (the case of anti troll alliance)
HillaryBriss 10y ago
> You look in contrast everybody who is basically going “mine, mine, mine”. Look at those companies, they are laying people off all the time. They are on the down slope of their corporate cycle. Some of them are huge multi-billion dollar companies but innovation is not coming out of them. A lot of smaller startups seem to fit this description. I wonder which large companies he has in mind though. He named Alcatel as one, I guess. Maybe AT&T as well? IBM? Oracle? I don't know. Oracle is making a ton of cash.
Zhenya 10y ago
Lee Cheng:Patent Trolls::United States:Barbary Pirates

311 points by izqui 10y ago

izqui 10y ago

We had the pleasure to interview our advisor Lee Cheng on his experience fighting trolls. If you have any questions or comments let us know and we will put them his way!

beastie29a 10y ago
Does Lee agree that the US patent system is flawed and if so what would be a good way for people to get involved to promote reform?
- chii 10y ago
  write letters to your senator. Done enmass, this can really change their mind - if they see their electorate care, they are going to add the angle to their campaign. Make sure you vote, and also remember, democracy is slow and painful.
_rpd 10y ago
What could a fair system for rewarding inventors and patent owners look like?
- proksoup 10y ago
  In my mind, the most fair would be something that didn't grant a monopoly on an idea to one player. I don't think rewarding patent owners is a goal, except that we already decided the way to reward inventors was patents and selling them (perhaps to those that can realize the value better, build a product and market it etc). My question is where are the inventors that want a patent system of any sort? I was under the impression that patents are a tool for lawyers and wealthy corporations to collect fees and maintain monopolies respectively. What inventor wants to patent their idea and why do they want to do such an awful thing?
  - rayiner 10y ago
    > My question is where are the inventors that want a patent system of any sort? I spent the early part of my career at a startup working on cognitive radio technology. Basically, algorithms to allow radios to use spectrum opportunistically, and to allow networks of such radios to maintain connectivity while dynamically changing radio channels. Like everyone else in that field, our company patented its inventions. It's expensive paying roomfuls of PhDs to work on network algorithms. At the same time, cognitive radios are not a consumer product you can launch overnight to a billion people. It's not a market where first-mover advantage or network effects have any value. It's not a market where you can hide your "secret sauce" behind a web API. In fact, you usually have to deliver source to your customers. It takes years to get into the market, and competitors waiting for you to do all the work and reverse engineering your design would eliminate any possible return on investment. Moreover, as a startup we had no expertise in manufacturing radios. Nor did it make any sense for us to get into that business--there are tons of companies that have the manufacturing expertise to build those radios. We could never compete with them on that front. The idea was always to develop the technology, then sell it to someone whose expertise was building radios.
  - _rpd 10y ago
    > where are the inventors that want a patent system of any sort? To me, this parallels the question: where are the artists that want a copyright system of any sort? The consensus seems to be that automation will abolish most drudgery over the next few generations. Won't the succeeding economy be founded exactly on creative and inventive intellectual labor? The intellectual property system as we know it may not be the mechanism to support it, but it seems like there should be some way of identifying and rewarding creators and inventors.
  - manarth 10y ago
    A patent is a time-limited monopoly, granted as recompense for publishing the details of their invention. Inventors can profit from their invention by selling products, and keeping the invention details a Trade Secret. For example, Coca-Cola is protected as trade secret, rather than by patent. Naturally this is less useful for something that can be reverse-engineered fairly easily, like, say, something in tech. What inventor wants to patent their idea and why do they want to do such an awful thing? These days, I think it's mostly out of fear of being sued by another patent-holder. Companies often stockpile patents to maintain the deterrence of Mutually Assured Destruction.
zodiac 10y ago
What makes going to court on patent cases so expensive?
- deleted 10y ago
  [deleted]
- talmand 10y ago
  Hourly billing.
bisRepetita 10y ago
I'd like to know how he financed the court fights. All from NewEgg profits? Did they manage to get financial contributions from other companies that had a vested interest in fighting the trolls?

jobu 10y ago

They will tell you, “you know the cost of litigation is this number”. Which I unfortunately know the cost of litigation is like that. “All we are asking for is a percentage of that cost and then the risk of punitive damages will go away” It still amazes me that extortion via lawsuit is legal.

steveeq1 10y ago
I know lawyers who do this on a regular basis and they, amazingly, think of themselves as good people. They even go to church, amazingly enough. I guess my point is never underestimate "incentive-caused bias"
- izqui 10y ago
  The curious thing is that patent trolls exist at all because lawyers are so expensive. The reason almost no company can afford to fight patent trolls is because the legal costs are so expensive. On a related note, I also find it incredible how people can make a living out of these kind of businesses and sleep well at night...
  - Phemist 10y ago
    >> On a related note, I also find it incredible how people can make a living out of these kind of businesses and sleep well at night... What we do is legal, therefore it is not unethical; if it were unethical, it would be illegal.
    - Ar-Curunir 10y ago
      Legality != Morality. Some of the NSA surveillance is legal; that does not make it ethical.
      - jessaustin 10y ago
        The word "legal" is sort of meaningless for behavior that is never observed by legal authorities. Also, see irony.

fosco 10y ago

Thanks for sharing this!! I like --> "Execution is the most critical element to success." time and time again in high stress environments I see that there are people able to continuously execute and implement and those who tend to freeze or request help. I think thriving under pressure is critical as well.

2bluesc 10y ago

All the more reason to shop more at NewEgg.

Bartweiss 10y ago
Their prices are usually quite close to Amazon, and for me it's worth just sticking to NewEgg to reward their customer service and anti-troll work.
- ansible 10y ago
  I'm shopping on Newegg because most other websites have awful category and filtering capabilities. Edit: But yes, their anti-patent troll activities are something I appreciate.
  - Bartweiss 10y ago
    One of the beauties of a niche site like Newegg is that they actually understand which products are interchangeable or related. If I search for USB splitter by price on Amazon, I'm going to get flash drive cases, then USB cables, then flash drives, then I'll get into splitters. Newegg knows I didn't mean that, and that "products like this" shouldn't include everything with a USB connector on one end.
    - degenerate 10y ago
      That's a great point, I never thought of searching for accessories on Newegg... even if I end up buying elsewhere, their accessory/peripheral search has always been one of the best on the internet for a long time.
      - Bartweiss 10y ago
        I only noticed it when I tried Amazon and got slammed with a hundred pages of "it has a similar name!" matches. You can buy a laptop there fine, but peripherals and internals just aren't arranged in any coherent way. I'm not sure what Newegg is doing (apart from specializing), but it works damn well.

ultramancool 10y ago

Isn't the whole point of Musk opening Tesla's IP to be able to sell more batteries? It's not charity, it's a business strategy.

Flimm 10y ago
Nobody said it was charity.
deleted 10y ago
[deleted]
jackmott 10y ago
That's the joke.
PakG1 10y ago
But it's still true that Musk believes he would out-execute anyone who takes his IP to try to copy and out-execute him, his cars, AND his batteries.

justaman 10y ago

If there was ever a time for federal intervention, this is it.

drzaiusapelord 10y ago
To do what exactly? The federal government created this problem with its asinine patent policies over the past few decades. Do you think all three branches of government will suddenly overhaul this because its upsetting some people in technology? Think of all the lobbying that makes sure this doesn't happen. I also think companies like Google, Apple, and MS play up the "evil patent" narrative but privately like the power their own patent portfolios have over competitors. Either as a defensive tactic or, sometimes, as an offensive one. These companies have also written the "Litigation will cost this much" letter against others many, many times. They're not against the patent system because it works in their favor almost exclusively. The exception are these patent trolls, which usually get shot down in court or get settled for a fee that's very affordable to big players. In fact, I'd go as so far to say that a lot of the press and "grassroots" anger towards patent trolls come via these companies' PR departments. They hate patent trolls but they do not want to give up on their own patent abuses and want to indoctrinate you into that belief system (Google/MS/Apple patents good, everyone else bad). I can't see any realistic reform here. Its not even an issue in this or the past few elections. I suspect this is going to be the status quo for a very long time. The system as-is serves big companies and the government.
- izqui 10y ago
  I agree change is not coming in the political front. Lobbying power defending the patent status quo is enormous, and reviewing Patent Law isn't in any political agendas. Big tech companies take advantage of the system. Microsoft has made billions of dollars out of licensing Android related patents, Apple applied for a paper bag patent recently and Google has "patent parties" when (as I have been told by Google friends) they encourage engineers to work with attorneys in filing patents on anything they worked on that could be patentable.
  - chenster 10y ago

ikeboy 10y ago

> It is not just in this century, execution has always been king, in fact many kings have been executed by future kings. He certainly has a way with words, this made me laugh.

seibelj 10y ago

What software is even patentable anymore? Some light reading of articles and wikipedia[0] makes it appear that post-Alice Supreme Court ruling anything mathematical, or anything that is an abstract idea implemented by a computer, is not patentable. I'm struggling to think of what is left. Cryptography is pure math, as is data compression. Is a specific type of UI patentable? [0] https://en.wikipedia.org/wiki/Software_patents_under_United_States_patent_law#What_software_patents_will_survive_Alice_analysis.3F https://en.wikipedia.org/wiki/Software_patents_under_United_...

_rpd 10y ago
To put it mildly, the courts are still working it out. For example ... Federal Circuit: Software and Data Structures Are Not Inherently Abstract http://patentlyo.com/patent/2016/05/structures-inherently-abstract.html http://patentlyo.com/patent/2016/05/structures-inherently-ab...
sdabdoub 10y ago
One of the main issues is, despite that decision, the USPTO is understaffed and underfunded, so stuff will still get patented that should have no grounds for patentability.
- sosborn 10y ago
  That doesn't make sense to me. If they are understaffed and underfunded then you would expect the number of granted patents to decrease.
  - philipkglass 10y ago
    I think the reasoning is that understaffing means each examiner can't spend as much time looking for prior art, so things might be patented that should have been rejected by a lengthier prior art search.
  - pbhjpbhj 10y ago
    The USPTO would still have an obligation to process the patent applications though. So now each patent has an average of 4h20m spent on it instead of 4h40m (some are hundreds of pages of complex concepts that potentially no one in the world has seen published before). The examiner then would be under pressure to glance over a lot of applications and just let the courts sort it out later.

fapjacks 10y ago

This is why I buy exclusively from Newegg. You can get things marginally cheaper on Amazon, but you are feeding the patent troll fighting machine when you buy from Newegg. And the costs aren't hugely more than other places. It's a few bucks here and there, and I think probably the most important few bucks people like us could spend when buying new hardware.

ke4qqq 10y ago

Good video of a presentation from Lee Cheng earlier this year here: https://www.youtube.com/watch?v=X-yUZW-v0io https://www.youtube.com/watch?v=X-yUZW-v0io

tnt128 10y ago

Wonder if it's possible to have a 'NATO like' alliance among the smaller companies that pools the resource together to fight patent trolls, and basically make it clear that these are the companies that will never settle with you, and will utilize pooled resource to fight against the patent trolls to the end.

rosstex 10y ago
There's the LOT Network: http://lotnet.com/ http://lotnet.com/
oconnor663 10y ago
We all hate patent trolls so much because there's no way to know whose patents we're violating before we get sued. But there are also cases where, whether or not we approve of the patent, everyone at least knows it exists. Like Apple patenting magnetic laptop chargers. Everyone knows that if you start selling a MagSafe competitor, Apple is going to sue you. So one of the problems you have to solve if you create a NATO-like network of companies, is that one of your members might decide they want to go up against Apple. Now your organization has to decide what counts as a "troll" case and what counts as "you should've known". And since some industries are at a higher risk of trolling than others, those more expensive members will inevitably drive out the safer members who foot the bills but don't benefit very much. So in the end you have problems somewhere in between an insurance company and...NATO :p
- slimsag 10y ago
  But, I mean, NATO must also make very similar decisions, right? If a NATO nation gets 'attacked' by somewhat provoking a war, NATO must ultimately make some sort of decision about whether or not to jointly act (and foot the bill).
  - BanzaiTokyo 10y ago
    it is easier to determine if a country was attacked (the case of NATO) than if the petent holder is a troll (the case of anti troll alliance)

HillaryBriss 10y ago

> You look in contrast everybody who is basically going “mine, mine, mine”. Look at those companies, they are laying people off all the time. They are on the down slope of their corporate cycle. Some of them are huge multi-billion dollar companies but innovation is not coming out of them. A lot of smaller startups seem to fit this description. I wonder which large companies he has in mind though. He named Alcatel as one, I guess. Maybe AT&T as well? IBM? Oracle? I don't know. Oracle is making a ton of cash.

Zhenya 10y ago

Lee Cheng:Patent Trolls::United States:Barbary Pirates