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We (MediaFire) were part of the Amici brief submitted to the Supreme Court regarding the eastern district of Texas. [1] It is a serious issue. Being a Texas co

by redm 10y ago

We (MediaFire) were part of the Amici brief submitted to the Supreme Court regarding the eastern district of Texas. [1] It is a serious issue. Being a Texas company, we have been sued numerous times primarily because we are in Texas and it allows the other defendant's cases to be tried in the Eastern District of Texas. The patents are always baseless, but it matters little. In almost all cases, the board of directors wants to settle the case quickly instead of fighting it out, even (in many cases) if the CEO or inside counsel wants to fight. It's cheap(ish) to settle and very expensive and time-consuming to fight; in short, it's a big distraction, one that can be solved with money. Since most of the plaintiffs are shell companies run by lawyers, there is little cost to them even if they loose and no value to the defendant if they win. The exception to all this being Lee Chang at NewEgg who always fights. That works if you have a CEO and board who is willing to spend the time and money to establish a reputation but that is seemingly rare. Newegg also signed onto this Amici. [2] This problem has been going on for a long time (8 years for us), and while we keep hoping for some reform, Congress is yet to act in a meaningful way. On a side note, our former patent defense attorney, who clerked for the patent judge in Marshall, TX, left defense a few years ago and became a plaintiff's attorney. His reasoning? Much more profitable. [1] http://www.scotusblog.com/wp-content/uploads/2017/02/16-341-pet-amicus-48-Internet-Companies.pdf http://www.scotusblog.com/wp-content/uploads/2017/02/16-341-... [2] https://blog.newegg.com/lee-cheng-holds-reddit-ama-explains-fights-patent-trolls/ https://blog.newegg.com/lee-cheng-holds-reddit-ama-explains-...

devoply 10y ago
words to the wise: don't invite lawsuits.
- DiabloD3 10y ago
  So, don't have a corporation inside of the US. Okay. Hey MediaFire, go reincorporate in Ireland, seems to work wonders for everyone else.
  - deleted 10y ago
    [deleted]
  - devoply 10y ago
    not what i meant. i meant don't post your company's name claiming you always settle online.
  - cookiecaper 10y ago
    You jest, but after my company was put out of business by a legal threat from a Fortune 100, I really do wish I had taken advantage of the ability to run it anonymously (collecting payment via something like bitcoin). Doing it above board didn't really get me anything valuable, and it made it easy for my enemies to locate and shut me down. These threats are regularly frivolous and unfair, but big companies have a habit of bullying smaller players with legal force. There is no way to win; either you spend millions on something with no value (a legal defense), or you comply/settle and get the aggressor to agree to back off. If you try to fight, you end up doing both when you go bankrupt 5 years into the proceedings. I only caught snippets of Judge Gorsuch's confirmation hearing, but it was awesome to hear him decry the evils of law school and the "ethics rules" that lawyers have installed for themselves, which he explicitly calls out as a money-making scheme responsible for over $10B+ in excess legal spending each year (somewhere around the 2.5 hour mark on the second day).
    - ThrustVectoring 10y ago
      Don't underestimate how valuable the right to be sued is. If other people have no recourse if dealing with you goes badly, they'll naturally be reluctant to trust you.
      - rfrey 10y ago
        That might be true if your market is other businesses. The courts are largely closed to normal consumers though, because of cost and the perception that justice is for sale. I doubt many mainstream consumers consider "can I sue this company if things go south" when making a purchase.
amunster 10y ago
Minor nitpick: Lee Cheng left Newegg in late 2016 to be COO of Gibson Brands (the guitar company). He will not be "fighting" in his new role. [1] [1]http://www.law.com/sites/almstaff/2016/10/03/outspoken-patent-critic-lee-cheng-leaves-newegg/ http://www.law.com/sites/almstaff/2016/10/03/outspoken-paten...
- redm 10y ago
  I hadn't heard that; NewEgg carry's the fight on, though.
- 6stringmerc 10y ago
  He's traded fighting Weaponized Patents for fighting Counterfeit Goods in that respect, re: Chibsons.
cookiecaper 10y ago
Congress is no longer an organ capable of representing the people. The only interests capable of being heard in Congress are those represented by lobbyists. Every time I hear someone who is directly involved discuss a grossly unfair legal issue like this, the answer always seems to be "We gave up on Congress a long time ago". These aren't necessarily interests with no money, they're just not interests with the most money. The only hope for fixing laws that aren't upsetting publicly-listed companies is that the case will get an activist judge who will take an extremely broad reading of the statute and establish that interpretation as precedent. From a strictly legal perspective, in many such cases, it's quite clear that the law forbids the activity, which is what leads to a lot of unsatisfactory rulings. I like the Constitution as much as the next guy, but we have to be honest with ourselves here and admit that the legislative arm is really not functioning anymore; they cannot fix the major problems that threaten innovation and small business. That whole branch needs to be rethought. Maybe it is just a matter of dividing into 300 states so that there can be more local representation (fewer constituents per rep).
- phkahler 10y ago
  The reason lobbyists are so effective is that they can influence a large number of representatives all in one place. An actual constituent can call his congressman, but that's a lot smaller influence. IMHO one solution to this is to keep them all in their home states and vote on issues remotely. Keep all communication public, and exclude influence from anyone outside their home state. This would force them to get their input from the people who elected them. On another note, every state should ban election advertising from anyone outside the state. There is little reason to allow outsiders to influence state elections. Hey, if you're going to get upset that maybe the russians influenced a US election, why not be upset when some national organization (including political parties) tries to influence a state election?
  - eyeinthepyramid 10y ago
    > On another note, every state should ban election advertising from anyone outside the state How is this not a first amendment violation?
maaaats 10y ago
> Since most of the plaintiffs are shell companies run by lawyers, there is little cost to them even if they loose and no value to the defendant if they win. Would having to deposit some kind of money up front before the case is accepted be a solution to this? Then you cannot spam-sue everybody, and if you lose you cannot just claim bankruptcy to escape having to repay the defendants' costs.
- marcosdumay 10y ago
  That officially closes justice to the common people. If you are going to assume it's an extortion, just don't accept the case, or ask for evidence before calling the defendant in.
  - coredog64 10y ago
    Other countries have loser pays and they've managed to do it without closing off justice for little people.
    - marcosdumay 10y ago
      I don't know of any democracy that requires deposing money before you get access to a tribunal. That's not loser pays. Raising the bar into requiring evidence before the court accepts the case solves the problem. No need to invent an access to court tariff.
- redm 10y ago
  The problem is really Non-Practicing Entities (NPE) who are doing the trolling. I think you have to change the laws to eliminate the ability for an NPE to buy up patents for the sole purpose of suing. It would help greatly if Judges were a bit more decerning about the cases they accept too.
TenOhms 10y ago
I've been looking to build a new HTPC. Most parts I want are cheaper through Amazon (with prime) compared to Newegg and in the end I could save about $50 getting all the cheaper parts through Amazon. I'll happily give Newegg an extra $50 when I do pull the plug. Now if Amazon would join the troll battle...

by redm 10y ago

devoply 10y ago

words to the wise: don't invite lawsuits.

DiabloD3 10y ago
So, don't have a corporation inside of the US. Okay. Hey MediaFire, go reincorporate in Ireland, seems to work wonders for everyone else.
- deleted 10y ago
  [deleted]
- devoply 10y ago
  not what i meant. i meant don't post your company's name claiming you always settle online.
- cookiecaper 10y ago
  You jest, but after my company was put out of business by a legal threat from a Fortune 100, I really do wish I had taken advantage of the ability to run it anonymously (collecting payment via something like bitcoin). Doing it above board didn't really get me anything valuable, and it made it easy for my enemies to locate and shut me down. These threats are regularly frivolous and unfair, but big companies have a habit of bullying smaller players with legal force. There is no way to win; either you spend millions on something with no value (a legal defense), or you comply/settle and get the aggressor to agree to back off. If you try to fight, you end up doing both when you go bankrupt 5 years into the proceedings. I only caught snippets of Judge Gorsuch's confirmation hearing, but it was awesome to hear him decry the evils of law school and the "ethics rules" that lawyers have installed for themselves, which he explicitly calls out as a money-making scheme responsible for over $10B+ in excess legal spending each year (somewhere around the 2.5 hour mark on the second day).
  - ThrustVectoring 10y ago
    Don't underestimate how valuable the right to be sued is. If other people have no recourse if dealing with you goes badly, they'll naturally be reluctant to trust you.
    - rfrey 10y ago
      That might be true if your market is other businesses. The courts are largely closed to normal consumers though, because of cost and the perception that justice is for sale. I doubt many mainstream consumers consider "can I sue this company if things go south" when making a purchase.

amunster 10y ago

Minor nitpick: Lee Cheng left Newegg in late 2016 to be COO of Gibson Brands (the guitar company). He will not be "fighting" in his new role. [1] [1]http://www.law.com/sites/almstaff/2016/10/03/outspoken-patent-critic-lee-cheng-leaves-newegg/ http://www.law.com/sites/almstaff/2016/10/03/outspoken-paten...

redm 10y ago
I hadn't heard that; NewEgg carry's the fight on, though.
6stringmerc 10y ago
He's traded fighting Weaponized Patents for fighting Counterfeit Goods in that respect, re: Chibsons.

cookiecaper 10y ago

Congress is no longer an organ capable of representing the people. The only interests capable of being heard in Congress are those represented by lobbyists. Every time I hear someone who is directly involved discuss a grossly unfair legal issue like this, the answer always seems to be "We gave up on Congress a long time ago". These aren't necessarily interests with no money, they're just not interests with the most money. The only hope for fixing laws that aren't upsetting publicly-listed companies is that the case will get an activist judge who will take an extremely broad reading of the statute and establish that interpretation as precedent. From a strictly legal perspective, in many such cases, it's quite clear that the law forbids the activity, which is what leads to a lot of unsatisfactory rulings. I like the Constitution as much as the next guy, but we have to be honest with ourselves here and admit that the legislative arm is really not functioning anymore; they cannot fix the major problems that threaten innovation and small business. That whole branch needs to be rethought. Maybe it is just a matter of dividing into 300 states so that there can be more local representation (fewer constituents per rep).

phkahler 10y ago
The reason lobbyists are so effective is that they can influence a large number of representatives all in one place. An actual constituent can call his congressman, but that's a lot smaller influence. IMHO one solution to this is to keep them all in their home states and vote on issues remotely. Keep all communication public, and exclude influence from anyone outside their home state. This would force them to get their input from the people who elected them. On another note, every state should ban election advertising from anyone outside the state. There is little reason to allow outsiders to influence state elections. Hey, if you're going to get upset that maybe the russians influenced a US election, why not be upset when some national organization (including political parties) tries to influence a state election?
- eyeinthepyramid 10y ago
  > On another note, every state should ban election advertising from anyone outside the state How is this not a first amendment violation?

maaaats 10y ago

> Since most of the plaintiffs are shell companies run by lawyers, there is little cost to them even if they loose and no value to the defendant if they win. Would having to deposit some kind of money up front before the case is accepted be a solution to this? Then you cannot spam-sue everybody, and if you lose you cannot just claim bankruptcy to escape having to repay the defendants' costs.

marcosdumay 10y ago
That officially closes justice to the common people. If you are going to assume it's an extortion, just don't accept the case, or ask for evidence before calling the defendant in.
- coredog64 10y ago
  Other countries have loser pays and they've managed to do it without closing off justice for little people.
  - marcosdumay 10y ago
    I don't know of any democracy that requires deposing money before you get access to a tribunal. That's not loser pays. Raising the bar into requiring evidence before the court accepts the case solves the problem. No need to invent an access to court tariff.
redm 10y ago
The problem is really Non-Practicing Entities (NPE) who are doing the trolling. I think you have to change the laws to eliminate the ability for an NPE to buy up patents for the sole purpose of suing. It would help greatly if Judges were a bit more decerning about the cases they accept too.

TenOhms 10y ago

I've been looking to build a new HTPC. Most parts I want are cheaper through Amazon (with prime) compared to Newegg and in the end I could save about $50 getting all the cheaper parts through Amazon. I'll happily give Newegg an extra $50 when I do pull the plug. Now if Amazon would join the troll battle...