17 ms·

Jury: Newegg infringes Spangenberg patent, must pay $2.3 million

550 points by lukeholder 13y ago

arbuge 13y ago
"I feel fortunate to live in a country with a judicial system like this where a jury can decide these things" I still feel fortunate to live in this country but the dysfunctional patent system has nothing to do with it. The status quo is this: When you receive a letter from a patent troll, you're already out at least $50k or so, possibly several $100k or even more if you decide to fight on longer. You can receive such a letter simply for scanning and printing a pdf file, or operating a shopping cart on your site. This situation must be fixed.
saryant 13y ago
To those patting themselves on the back as we begin another round of Texas bashing (because, let's face it, for a number of people here that's their favorite part of patent stories), may I ask why you blame an entire state? When things go wrong in California or New York or Massachusetts, those states aren't blamed: the individuals take the heat! (What a concept!) But whenever something bad happens in Texas, somehow all 26 million of us are involved and culpable. Case in point: a few minutes ago there was a post here saying we should poison the water in East Texas to stop this. Thankfully, it has been deleted. Battling bigotry with bigotry is not likely to work. When Hollywood pushes for another batch of draconian copyright laws no one here raises up there hands and hopes for the "big one" to knock LA into the ocean. When municipalities go after Uber or AirBnb no one begs to push that entire state out of the union. Why the double standard? (I know why, no need to answer that question) Certainly as a Texan and tech person I'm not a fan of this ruling but the vitriol displayed here towards an entire state verges on disgusting. FWIW, I grew up in the Bay Area and across California, I'm not some Pineywoods hick who never left the trailer park. I am, however, quite tired of the hatred and, frankly, gleeful malevolence sometimes displayed on this site towards Texas.
- jeswin 13y ago
  _I completely agree with everything you have said. My reply is not about that._ But the comparison is not very apt. Hollywood's draconian copyright laws would mean that you can't watch a movie or listen to a song, which is no big sacrifice. Patents are an affront to your freedom. Any service, app or business you build will violate some patent or the other. Countries have chosen to hand over monopolies on ideas and thought. This may not affect many of us. But having to watch helplessly while companies like NewEgg suffer is very, very painful.
  - saryant 13y ago
    Fair enough, it's a poor analogy. I absolutely agree with your assessment of patents however.
  - astrodust 13y ago
    That's exactly it. Patents can affect anyone at any time, whereas copyright laws affect certain individuals that have violated the terms. Theoretically of course. There have been cases of people being sued for piracy when they don't even have a computer.
- cm127 13y ago
  What are you talking about? We bash Hollywood all the time. Now we're bashing East Texas - not all 26 million of you.
- SwellJoe 13y ago
  I'm a Texan (10 years in Houston, 10 years in Austin, and currently residing in Austin), and I'm one of the most vocally anti-Texas people in this thread (though I'm not suggesting poisoning the water). I'm just very frustrated. The future of Texas, just like the rest of the country (but very much so Texas), is technology. This one little town, and this one judge, seem to be hell-bent on destroying innovation. There's just so much wasted energy and effort, and it makes me sad to see the bad guys win so frequently (and these are bad guys; they've extorted millions from people who had no idea this really silly patent existed).
  - cobrabyte 13y ago
    Agreed. As a fellow Texan, I'm embarrassed that this relatively small town has become the de facto venue for patent battles... especially those involving patent trolls. How would we go about changing this? Surely the rest of the nation is taking note at the bias afforded to patent trolls by Marshall. I just don't understand how, especially in this case, they could have sided with the troll. Is there an economic benefit for the people of Marshall to side with the trolls or are they just completely oblivious when it comes to technology cases? I am completely dumbfounded by this Texas court.
    - SwellJoe 13y ago
      Judges are elected in Texas, but I don't think that applies in the case of federal judges. The infamous T. John Ward retired a couple years back, but it seems like the tradition continues with whoever is hearing these cases now. I think, in the end, there needs to be patent reform...which just got shot down before it ever really even got any traction. So, I don't know. Educating people about the harmful effects of software patent law and patent trolls might be a useful start. This is pretty obscure stuff to most people.
- ScottWhigham 13y ago
  I think you're just being a tad over-sensitive here (and I say that as someone who moved to Dallas in 1987). I've been on HN for 4-5 years and I've never heard or seen "Texas bashing" here. Texas' population is almost 10% of the US. Texas is also the 2nd largest state, comprising almost 8% of the land mass of the US. Besides, I'd guess half of the HN crowd today are overseas - I doubt the average non-North American HN person could name more than 7 states. And of those 7, Texas, California, and New York are in every single person's list.
  - warmwaffles 13y ago
    There has been a fair share of Texas bashing here. Mostly complaining about EDT and other various shenanigans going on.
- Tloewald 13y ago
  You should see the French-bashing here.
- lsaferite 13y ago
  > When things go wrong in California or New York or Massachusetts, those states aren't blamed: the individuals take the heat! (What a concept!) Well, as a Florida resident, I think we must be some exception to your rule then. It seems we always get blamed as a whole for the actions of the few.
defen 13y ago
It's getting late and I don't really have the energy to dig into this patent (http://www.google.com/patents/US5412730 http://www.google.com/patents/US5412730), but on a cursory reading I don't see how it differs from the encryption work that Claude Shannon and Alan Turing were doing during World War 2, later embodied as http://en.wikipedia.org/wiki/SIGSALY http://en.wikipedia.org/wiki/SIGSALY ... is it just because it transmits the data in "blocks"? Pretty low bar for novelty, there.
bradleyjg 13y ago
The original Anglo-Saxon juries were chosen from among local people because they knew the witnesses who would be testifying. The idea was that they could judge the credibility of the witnesses based on their direct experience with them. Then later on after the idea of an unbiased jury took hold, there arose a justifying theory that the jury could tell by careful observation whether or not a witness was telling the truth. This theory is dubious enough when applied to simple questions of outright lying. When it comes to judging expert witnesses testimony, it is totally bogus. If they don't want to create a patent office court to adjudicate these cases, at the very least Congress should authorize the appointment of special masters to do fact finding in patent cases.
- rdtsc 13y ago
  Moreover, there is a cottage industry of being an "expert" to testify for some of these technical issues. They are often experts in as much as they have been called before as "experts", even thought the industry they are supposedly explaining might consider them charlatans -- people who just know how to dress well and talk bullshit, but in a very convincing tone.
  - codeka 13y ago
    That's basically how I saw them trying to paint Diffie in this trial: by pointing out that he hadn't graduated from university, that he wasn't a professor, that he didn't even invent PKC! It seems they managed to convince the jury at least.
    - danielweber 13y ago
      If he claimed to invent PKC and the other side points out he hadn't, his credibility goes down the toilet. I saw lots of love for Diffie's "I invented it" line. But if he overplayed his hand, he ended up hurting his side more than he helped it.
      - gknoy 13y ago
        When there are museums that consider you to have invented it, and you DID invent it (just perhaps were not the first, though that was not known at the time), it seems fair to say that you did. After all, we consider that both Newton and Leibnitz invented calculus.
venomsnake 13y ago
Well ... expect some bad stuff to happen. Like a company subsidiary shell company developing all business method IP overseas and "selling" it to the parent and when a lawsuit emerges they will have just enough funds to mount a defense and then blow the fuse company. That way shell companies will fight shell companies in court ... the fun.
droopybuns 13y ago
Uhhh.... RC4 + SSL = broken cryptosystem, right? We're not bummed about additional incentives to avoid this broken approach to TLS, are we? This is actually a fucking good thing.
- EdgarVerona 13y ago
  We're not bummed out because the cryptosystem is broken, but rather that every victory for a faulty patent is a victory for the system around which faulty patents are allowed to thrive (and strangle out others). Regardless of the tech behind the "patent" and whether it's feasible or not, it's another situation where a dubious patent has wrung money out of someone by exploiting our vulnerable system.
- nitrogen 13y ago
  Isn't SSL in this context a shorthand for SSL or TLS? A quick visit to Newegg's site shows them using TLS 1.0. Has RC4 been publicly broken?
- jsmeaton 13y ago
  RC4 is no longer recommended, but is the best supported method as I understand it [0]. There's also the issue that the most widely available versions of openssl do not support PFS or tls 1.2. You need to download and compile a newer version of openssl (rather than using packages - RHEL in particular since that's what we use), and then compile whatever web server or proxy again with the newer openssl support. [0] https://community.qualys.com/blogs/securitylabs/2013/03/19/rc4-in-tls-is-broken-now-what https://community.qualys.com/blogs/securitylabs/2013/03/19/r...
lifeisstillgood 13y ago
"We've heard a good bit in this courtroom about public key encryption," said Albright. "Are you familiar with that?" "Yes, I am," said Diffie, in what surely qualified as the biggest understatement of the trial. "And how is it that you're familiar with public key encryption?" "I invented it." I think I see the trailer for the TV Mini series right there :-)
- hobs 13y ago
  And they still lost... what? Every time I read about our patent system the blood drains from my face, how do we fix such a broken system?
  - lifeisstillgood 13y ago
    Its worth thinking what do we want? - That we have good and effective Intellectual Property laws. It seems one of the big lessons of the Industrial revolution was the right property laws. The principles behind patents and copyright law make sense in this regard. Its the specifics that have problems. - The analogy to physical property is worth following more deeply - countries such as in S America, ie Chilie, are trying to undergo property law revolutions, and often local knowledge is clear - everyone "knows" that Juan lives in that building and has done since he was born, and maintains it for his family. Therefore it is "his" house. Our IP laws generally need to come to some agreement on a similar situation - where there is clear contentious dispute, local (ie expert) knowledge is needed. - This is more or less what is happening here - someone is claiming Juan's house was actually their house. A jury was asked to decide with clear expert local knowledge. So the process is what we want. Its just in this example we choose a bunch of idiots for the jury. - Software should be copyright. This will cause difficulties in "porting" software, and in doing the same algorithm in php and then perl. summary: IP rights is more likely to be a good thing than a bad thing, just like property rights. However bad implementations of property law have seemingly held back countries like Brazil / Chile, and we do not really know what IP law should look like to be most suited. I prefer allowing local knowledge to be primary in cases of dispute. (http://www.ted.com/talks/niall_ferguson_the_6_killer_apps_of_prosperity.html http://www.ted.com/talks/niall_ferguson_the_6_killer_apps_of...)
sytelus 13y ago
Article starts with the most important two words: MARSHALL, TX From Wikipedia: Marshall has a reputation for plaintiff-friendly juries for the 5% of patent lawsuits that reach trial, resulting in 78% plaintiff wins. I've stopped myself getting surprised for any patent suits where troll gloriously wins and that decision comes from a court in Marshall. This town's economy probably runs on lawsuits that trolls bring in and jury members from the town seem to have special incentive to favor plaintiffs almost 4 out of 5 times!
- tedunangst 13y ago
  Without knowing the percentage of cases that result in plaintiff wins in other cities, you can't draw any meaningful conclusions from that stat.
  - DannyBee 13y ago
    Well, he is actually right that the town is essentially funded by patent lawsuits. http://www.nytimes.com/2006/09/24/business/24ward.html?_r=0 http://www.nytimes.com/2006/09/24/business/24ward.html?_r=0
    - brador 13y ago
      Doesn't that make the trial unfair? Isn't "no associated interest" a basic marker of a fair trial?
      - amalag 13y ago
        Thats a tough one for an appeal though, showing the jury was unfair.
      - DannyBee 13y ago
        It's very hard to show actual jury bias. Though i bet if the anti-patent groups got together and bought marshall a new football stadium, the win rates would go down ....
garthdog 13y ago
Can we put up billboards in East Texas letting potential jurists know what the stakes for the country are?
charlysisto 13y ago
sadly, one word comes in mind : the new mafia.
Osiris 13y ago
Why are patent disputes resolved by laymen (juries) rather than experts in law and the area of study of the patent itself? I just don't see how people completely unfamiliar with the subject matter at hand can be expected to understand highly technical arguments necessarily to determine patent validity.
- baddox 13y ago
  Who would judge whether someone was truly an "expert" in the area of study?
  - PeterisP 13y ago
    Judges would be perfectly capable of doing so.
  - khafra 13y ago
    Why not judge by objective metrics, like whether the expert's name is included in one of the oldest and most important protocols in the area of study?
    - baddox 13y ago
      At the end of the day, real people have to choose which objective metrics to look at, and real people then have to look at those metrics and make the actual call.
ck2 13y ago
I'm curious if these juries have any college education.
- bdcravens 13y ago
  You're implying that their conclusion is the result of them being uneducated? Pretty sure it's the result of ideological bias, not intellectual ability or knowledge.
  - ck2 13y ago
    No I meant it in regard to being taught critical thinking. College isn't a guarantee of being able to process things that way or the only way to acquire such habits, but it is a good indicator.
codygman 13y ago
Can we troll the patent trolls yet?
- pistle 13y ago
  Not really. Arbitrage is already pretty advanced. The analogy to bitcoin mining rigs and mining pools isn't far-fetched. Some well-positioned people smell it and started refining the process while building up legal machines for consolidating power and squeezing every advantage out of the system. They also have already moved ahead in protecting interests from retribution of the noble AND pitchfork variety. Let's also not forget that there are parties shaking hands over a couple few million... and we're just sitting here worrying that someone is plotting a highway tax for when we finally ascend to such neighborhoods.
voltagex_ 13y ago
Oh. Crap.
deleted 13y ago
[deleted]
scotth 13y ago
To put it bluntly, that fucking sucks.
SwellJoe 13y ago
Disgusting. This is one of the reasons Texas has such a bad reputation: Ignorant juries and judges in the pocket of patent trolls.
- clarkm 13y ago
  A bad reputation among who? Maybe in your insular circle, but certainly not for the majority of middle-class Americans. It has the highest in migration rate for a reason.
  - SwellJoe 13y ago
    Yeah, I live here (Austin; spent 10 years in Houston, too). I love Texas. But, Texas does have a reputation for being backward, regressive, racist, and willfully ignorant. It was Texas State Board of Education that led to a decades-long battle over evolution. If that's not embarrassing, I don't know what is. Texas also just passed a law that will shut down all but 4 (maybe 5) of the health clinics that offer abortion in the entire state. Those clinics are also where a lot of folks get birth control, STD testing, and often where poor women go for gynecological care. Texans will spend 15% more on healthcare because of the stubbornness of our governor. Whether one agrees with Obamacare or not, it's pretty nasty to intentionally screw over poor people out of nothing more than spite. Texas definitely has a bad reputation. And, it deserves that bad reputation.
    - jonhinson 13y ago
      As a native Texan (I've lived in the Houston area for about 26 years), I agree with most of what you say. RE: the clinics, instead of closing, could those clinics continue to offer the other services and simply stop offering abortions? I feel like it's throwing the baby out with the bath water to just shut down altogether. Perhaps I am just misunderstanding the legislation, so please correct me if I'm wrong.
      - angersock 13y ago
        The hell of it is, we've still got one of the strongest economies in the US, especially if you're looking for more traditional blue-collar labor.
wnevets 13y ago
what a disgrace
gkoberger 13y ago
The patent involved basic traffic encryption (SSL or TLS combined with the RC4 cipher), and the company already has made $45 million off it. Here's some more info on the company they lost to: http://www.techdirt.com/articles/20121109/02321120982/meet-patent-troll-suing-hundreds-companies-encrypting-web-traffic.shtml http://www.techdirt.com/articles/20121109/02321120982/meet-p... TL;DR: They're patent trolls.
- MereInterest 13y ago
  >the company already has made $45 million off it I know that saying "made" is the generic form for acquiring money through any means. However, it also carries the connotations of production, of creation. I would rather say that they have already extorted $45 million using it.
  - mbennett 13y ago
    The worst thing about this award is that it gives them more money to launch even more patent lawsuits against more companies.
  - arh68 13y ago
    Well since Newegg made the money, perhaps TQP was awarded the $45M that Newegg et al made, or TQP was shown to deserve the $45M that Newegg et al made. But you're right, let's be clear: TQP didn't create any wealth here. EDIT: I'm mixing numbers. Not all of the 45M was from Newegg.
  - reginaldjcooper 13y ago
    If the copyright enthusiasts can misuse legal terminology to refer to copyright infringement as actual theft, I say let's go ahead and call this a theft as well. We'd be closer to the truth.
- yeukhon 13y ago
  So they have six more years to sue. Can they renew and is there any plan they will renew this? Even though RC4 is no longer recommended I don't see us moving away from it for another 5-6 years given many servers probably can't upgrade to newer ciphers (I am thinking about those old RedHat servers). Correct me if I am wrong though.
rwbt 13y ago
Does the jury give a detailed explanation beyond the judgement? Also how come all these patent trolls are incorporated in Texas?
- daliusd 13y ago
  A little bit information here: http://en.wikipedia.org/wiki/United_States_District_Court_for_the_Eastern_District_of_Texas#Patent_litigation http://en.wikipedia.org/wiki/United_States_District_Court_fo... While it would be interesting to know why it happens in Texas.
  - talmand 13y ago
    It had to happen somewhere. Lawyers just like to go where they think they have a better chance of winning. You can see something similar on a local level. Being accused of certain type of crime? You really want this judge. Having an argument with your neighbor over a fence issue? Well, let's try to get this judge because I know he doesn't like that guy's uncle.
adamnemecek 13y ago
That's terrible but I feel like they will win once they appeal the decision.
Fishrock123 13y ago
Bullcrap.
loganfsmyth 13y ago
We'll have to hope it goes better on appeal. I would be very interested to hear the jurors reasoning.
- downer96 13y ago
  If the glove don't fit, you must acquit.
taspeotis 13y ago
Optimism please, they've beaten patents on appeal before: > "We're certainly very disappointed," said Cheng. "We respectfully disagree with the verdict that the jury reached tonight. We fully intend, as we did in the Soverain case, to take this case up on appeal and vindicate our rights." > Soverain was the "shopping cart" patent that Newegg was ordered to pay $2.5 million for, but the company then knocked it out on appeal. Soverain's damage request was huge for Newegg: $34 million.
- kintamanimatt 13y ago
  I'm not sure why one should be optimistic. Even if they win, they've lost; the legal costs alone are silly and aren't paid for by the loser.
  - indrax 13y ago
    If they won a previous case on appeal, and as micahgoulart observes didn't use a potentially valuable witness in this case. This suggests a strategy of bleeding out the patent trolls through their lawyers. A troll's business model relies mostly on settlements, newegg can just keep selling computers.
    - Zancarius 13y ago
      > This suggests a strategy of bleeding out the patent trolls through their lawyers. I was depressed when I read the verdict, but your point here gives me new hope. I hadn't thought about that. I wonder if they're going to hold back on their witnesses then for the appeals process as a sort of "ace in the hole?" I further have to wonder if the reason they decided not to use that witness was because they suspected they were going to lose this case and have to appeal? I can only hope that the appeals process ends up invalidating this patent.
  - alextingle 13y ago
    No. Even if they lose, they've won. The whole point of their strategy is to discourage the next patent troll from trying to shake them down. Even if they lose this case, they will have continued to demonstrate that they are no push over.
brianobush 13y ago
Makes me wonder why we allow juries to hear patent disputes. Do they really understand patents and their terse wording? I would rather have a jury of individuals that would be able to read, code and test the same concepts that they are deciding on.
- machrider 13y ago
  This famously came up during the Apple/Samsung suit, where the jury's foreman went around making misinformed statements about patent law in mainstream media: http://www.techdirt.com/articles/20120830/02063020214/ http://www.techdirt.com/articles/20120830/02063020214/
- talmand 13y ago
  But some people claim the reason to use that district is because the jury pool does have knowledge and experience directly relating to patent matters. We see how that is turning out. Although, I disagree with the theory.
zacinbusiness 13y ago
I've never had the pleasure of serving in a jury. How does it work? I have been under the impression that all jury members must agree on a single verdict? I know for a fact that I would not agree with this verdict. And I can't rationalize finding against Newegg here. Can someone who can see the other side (whether or not you agree) explain it here?
- valleyer 13y ago
  You're thinking of criminal cases. Many civil trials only require a certain majority (say, nine of twelve) to find a verdict.
  - zacinbusiness 13y ago
    Ah! I didn't know that. And of course most (all?) of these cases are civil cases. That makes much more sense to me, thanks!
awwducks 13y ago
Here's coverage from the local paper. http://www.marshallnewsmessenger.com/news/online-retailer-newegg-s-patent-infringement-case-begins-in-marshall/article_fe84fb88-636d-5c3f-a460-9abe0e4fbfc9.html http://www.marshallnewsmessenger.com/news/online-retailer-ne... Seems to be more of a TQP slant to it.
- droithomme 13y ago
  Thanks for that. It describes the sort of reasoning very well that the plantiff's attorney knows appeals to people in the area: > Fenster described the inventor of the patent, Michael Jones, as a hard worker. > “He doesn’t have all these fancy degrees,” said Fenster. “He’s a hard worker, creative, smart, an innovative guy, and he loves technology. He’s great at recognizing problems of the future and finding solutions.” The article is entirely one sided and reads as if the plaintiff himself wrote it. As it is the only exciting thing happening in town, many of the jury member's family and friends will be reading articles of this sort during these trials, representing only one side of the case.- Amazing that the article notes the patent was awarded in 1995 and fails to mention that RC4 was invented in 1987.
  - EdgarVerona 13y ago
    Wow, pardon my french, but what the fuck is this article. This sounds like a paid advertisement. "The company, owned by Erich Spangenberg, of Dallas, is seeking a reasonable royalty of $5.1 million." How much did they get paid for that line?
    - msmith 13y ago
      Used in this context, "reasonable royalty" is a legal term that describes the money that is to be paid due to the infringement. I don't believe the author was making a judgement call on the fairness of the award.
      - EdgarVerona 13y ago
        Oh! Okay, this explains a great deal.
batgaijin 13y ago
Doesn't this just motivate startups to incorporate somewhere where software patents aren't enforced, like New Zealand? http://www.cnn.com/2013/10/01/business/10-best-places-to-start/ http://www.cnn.com/2013/10/01/business/10-best-places-to-sta... I mean at the end of the day this lack of timely reform is fundamentally making people look for asymmetric ways to entirely avoid problems. Is that the way society should be driven? I think that is an unstable driver of future events --- a society that cannot reform itself in a timely manner, that cannot properly forecast events and repercussions, is a society that is forgetting it's responsibility for balancing itself. I really do not like this behavior; it is abhorrent of a society that can be a seer. I mean there is the usual belief that we are all equal and deserve equality --- but that cannot happen as long as we inherit citizenship, wealth and networks. It is a nice belief but simply cannot be rendered in any sort of predictable manner. This creates a situation. Their are private discussions on the ongoing nature of patents --- but I feel that more than anything people are forgetting that as the point of a corporation is it's superhuman predictable nature, that the further antagonization of new corporations will balance itself not with a mutated form of socialism but with an asymmetric alliance of corporations - one which favors unpredictability and an increased rate of change. Wealth and the rate of innovation are separate --- and that fiction will reveal itself at a much faster rate if proper steps are not taken in a timely manner.
- lambda 13y ago
  Not really. You're going to want to sell your products in the US anyhow; the New Zealand market is tiny compared to the US market. If you sell your products in the US market, you have to play by the US's patent rules or your products won't be able to be imported (but as Samsung has found out, popular US based companies like Apple can get federal government intervention to veto an import ban on their products, but Samsung can't do the same: http://www.bloomberg.com/news/2013-10-08/samsung-loses-bid-for-presidential-veto-of-apple-won-import-ban.html http://www.bloomberg.com/news/2013-10-08/samsung-loses-bid-f...).
  - batgaijin 13y ago
    What if the real money is in B2B and this is simply going to push the expenditure into a special trade communication zone? Are American companies going to be banned from certain expenditures? Is is it possible that people would create a proxy corporation to leverage the service in different areas? I'm probably acting like an idiot. But I mean I think this just is creating a recipe for crazy lawyers to try some shit on someones dime.
pbreit 13y ago
Kudos to NewEgg for the immense risk in fighting these.
droithomme 13y ago
It says this patent covers using SSL with RC4. SSL dates back to Netscape, was released in 1995, and has no one involved in it has anything to do with the patent holder here. RC4 was designed in 1987 by Ron Rivest who also has nothing to do with this case. Someone named Michael Jones patented using SSL with RC4. Which in seems was a known and used combination at the time he did so, as was testified by the expert witness? But the jury thought that not relevant. The patent would seem to avoidable if say using AES instead. Caution: I don't know what I am talking about and just looked the above up on wikipedia, which I probably misunderstood. Hopefully someone who understands this in more depth will post.
- leeoniya 13y ago
  going forward, maybe. but AES was not standardized until 2001, and not in wide browser adoption for what? another 10 years?
  - salient 13y ago
    Maybe this will be the motivation everyone else needs to dump RC4? http://googleonlinesecurity.blogspot.com/2013/11/a-roster-of-tls-cipher-suites-weaknesses.html http://googleonlinesecurity.blogspot.com/2013/11/a-roster-of...
    - tedunangst 13y ago
      The patent has already expired. Feel free to use it to your heart's content.
    - harshreality 13y ago
      Worse, there's the allegation that NSA can crack RC4 in realtime (although I don't know what that means, other than "fast"). https://twitter.com/ioerror/status/398059565947699200 https://twitter.com/ioerror/status/398059565947699200
      - Already__Taken 13y ago
kunai 13y ago
Does the jury for a highly specialized patent case exist and function in largely the same way as a jury for other trials? Namely, "peers" instead of educated individuals on the particular topic at hand? If that's the case, the United States needs some serious judicial reform.
- valleyer 13y ago
  Yes, juries are selected just like any other trial. They are educated on the relevant law and case law by the presiding judge and expected to serve simply as "finders of fact". I'm not sure I agree that this is the actual problem with the patent system.
- carbocation 13y ago
  By extension, would you prefer that a panel of doctors preside over malpractice cases?
zellyn 13y ago
Perhaps someone who knows more about the legal system can help me understand something: at this point, it's well-known that these areas of Texas are good for patent disputes: they receive national attention, and a massive influx of spending as companies travel there to fight court battles. Given that, surely any jury made up of locals has a huge incentive not to kill the golden goose and deter patent trolling by letting defendants win. Is there not a conflict of interest here?
- ndesaulniers 13y ago
  I could have sworn that due to a below average crime rate, the legal system is able to get patent litigation through quicker.
  - Guvante 13y ago
    You might have been correct originally, but the number of patent cases has changed the focus.
- jamesaguilar 13y ago
  There are actually other districts that have higher win rates for patent trolls. One attorney told me that people use EDT simply because that district has built up a fair amount of knowledge and experience in this area of law, and thus the cases are cheaper to fight there. I don't know this to be true, this is just what I've heard.
  - EdgarVerona 13y ago
    If they've built up knowledge and experience, they ought to prove it by rendering verdicts that make sense. Maybe it's just a case of confirmation bias on my part, but it feels like they've got their heads firmly lodged up their asses over there.
  - saryant 13y ago
    FWIW, a friend of mine who's an IP lawyer said the same to me.
linuxhansl 13y ago
> "I feel fortunate to live in a country with a judicial system like this where a jury can decide these things," [Jones] said. Of course he does. It's the very judicial system that presented him with an easy $45m. He is a parasite (quite literally) and he knows it.
- EdgarVerona 13y ago
  Indeed, he might as well have said "No other country would let me get away with the shit I'm pulling over on people right now." This whole situation is quite disappointing. Kudos to Newegg for trying, at the very least.
natch 13y ago
Bring a California company in front of a Texas jury, and call wild-haired Stanford visiting professor Diffie as a witness? I'm afraid this says more about the bigotry of the jury members toward Californians than it does about the case. My hunch is they (wrongly in so many ways) thought they would teach the hippie a lesson.
- clarkm 13y ago
  And you think this because?
  - natch 13y ago
    Because of the jury's decision.
- tsotha 13y ago
  Do you have any actual reason to believe this?
  - natch 13y ago
    The jury's decision... frankly I trust Whit Diffie on this stuff more than I would trust a jury from Marshall.
    - tsotha 13y ago
      You're attributing motivation, though, based on no evidence.
      - deleted 13y ago
        [deleted]
      - natch 13y ago
        It's a hunch, as I said. My evidence is my own experience, but that's known only to me, to be fair. You have a better hunch? Let's hear it.
micahgoulart 13y ago
I think Newegg was complacent, perhaps a bit cocky, bringing in the expert on encryption, pandering to the jury and going through a humorous exchange on his knowledge of it, thinking they had it in the bag after the shopping cart win. And then the defense surprisingly declined at the end to rebut the damages claim of $5.1 million: "Then came another stunner: Newegg rested its case. It did so without putting on its expert witness to rebut TQP's $5.1 million damage claim—even though documents in the court docket clearly indicate the company had such a witness." [1] http://arstechnica.com/tech-policy/2013/11/newegg-trial-crypto-legend-diffie-takes-the-stand-to-knock-out-patent/2/ http://arstechnica.com/tech-policy/2013/11/newegg-trial-cryp...
- erichurkman 13y ago
  Could NewEgg simply be wanting to escalate their appeal to a higher court, and thus have their eventual verdict carry more weight? This operates on the gamble that NewEgg believes they would be eventually triumphant and that the cost of a longer fight is less than the damages of a lower court. (Speculation, but perhaps reasonable, given NewEgg's previous victories.)
  - talmand 13y ago
    Don't forget going to a higher court will likely get the case out of that district's court.
- WildUtah 13y ago
  Newegg's strategy is to invalidate patents in order to discourage future litigants. Just winning a cheaper verdict today won't reduce their costs in the long run by much. The PTO issues hundreds or thousands of new patents every year on business processes Newegg is already using so there's no limit on potential future litigation.
- ScottBurson 13y ago
  They had planned to appeal anyway if they lost. Getting a damage award reduced on appeal is relatively common. And the problem with taking about the award amount after arguing that the patent is flat-out invalid is that one can seem to be conceding the infringement argument. IANAL, but it seems like a reasonable gamble to me.
deleted 13y ago
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davidw 13y ago
Depressing, but this might be a good time to donate to those fighting for patent reform, like EFF.org
meritt 13y ago
"Why Patent Trolls Worldwide Love Marshall, Texas" -- http://www.techdirt.com/articles/20060203/0332207.shtml http://www.techdirt.com/articles/20060203/0332207.shtml Nearly 8 years ago. Unfortunately nothing whatsoever has changed.
shmerl 13y ago
Is the jury required to explain the logic of the decision, or it's simply "we decide this"? Rejection of such obvious proof of patent invalidity and existence of prior art looks pretty bad.
- nitrogen 13y ago
  The topic of jury secrecy came up in the Apple vs. Samsung case. I can't find a link to the specific rules right now, but basically, jury deliberations are secret.
  - talmand 13y ago
    If there's no gag order, jurors will often talk about what happened. Now, whether to believe them or not is another thing.
    - shmerl 13y ago
      So, did they explain here why they sided with the troll?
      - talmand 13y ago
        I have yet to hear of anyone coming forward. I guess the trial was not big enough news for someone to attempt to get their fifteen minutes of fame.
deleted 13y ago
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smegel 13y ago
Why can't the world be just, I don't know, more decent and reasonable and just?
mattlutze 13y ago
A few have commented how, internally to the IP law industry, the district is known to have a lot of specific domain experience with the argument of IP law. I can definitely understand why that would be attractive to patent-holding firms, in the way that Delaware is attractive to large corporations. Most of us not in the IP industry think a lot of these suits are ridiculous, and it's because we don't make our lives by the reality of how IP law is structured. These cases are ridiculous because IP law is ridiculous. It's not Marshall, TX's fault that IP law is ridiculous, and these juries very well may be the most knowledgeable jurours out there. That fact is dangerous, however, because this town's specialized experience makes it as if these companies are arguing cases in front of a jury of paralegals instead of representatives of the public, which absolutely will bias results. Part of the reason we have juries is to balance the law with common sense. Common sense means something different when you're almost as knowledgeable about the law as the lawyers in front of you.
- xradionut 13y ago
  "It's not Marshall, TX's fault that IP law is ridiculous, and these juries very well may be the most knowledgeable jurours out there." As a lifelong Texan I do believe you overestimate the knowledge base of people that willing live in East Texas. Most of the technical smart folks in Texas have migrated to Austin, DFW, San Antonio or Houston for real jobs. And most of them don't have a fucking clue about encryption. East Texas is a dream situation for attorneys considering the average knowledge is lower than the rest of this state. Have this trial in Dallas and you might get a engineer from TI or a statistician from my company on the jury. East Texas is what we in the city refer to as the "Sticks". The per capita income is half that of even the older suburbs in Dallas.
  - talmand 13y ago
    I agree. I, for one, am tired of seeing this nonsense that the jury pool in that district has a high-level knowledge and experience with matters pertaining to patents. Patent trolls want that district because that's where they win the most. It's similar as to why they avoid certain districts, because that's where they lose the most. If another district had the reverse stats, where a large number of patent suits are filed but patent trolls lose 80% of the time, you would have a district that had a "high knowledge base" in the jury pool. Patent trolls would avoid it like the plaque, despite having such a supposed intelligent jury pool.
beaker52 13y ago
Imagine where we could be if everyone openly shared everything they discovered or invented. Just imagine a world where we co-operated instead of making life harder for one another.
josscrowcroft 13y ago
How can your average startup and company owner rest assured that they're not unconsciously walking into a patent troll's lair? I might be unknowingly infringing patents nobody has heard of (except companies like these). Business idea: a service that investigates your stack (with your permission) and verifies that you're not likely to be sued.
- justincormack 13y ago
  its hard to guess what trolls will do. You could come to Europe.
  - TheLegace 13y ago
    What about Australia, Canada or New Zealand? And what happens if you would like to offer products and services in the US(which is a huge market). I'm assuming just like Samsung they are still liable if they want to sell something. I'm genuinely curious and concerned.
    - justincormack 13y ago
      Offering products in the US is a problem, so Europe is perhaps more attractive as the market is larger...
- ghshephard 13y ago
  Mission impossible, as any business that operates is likely infringing on thousands, it not tens of thousands of patents every single day. Patent law has transformed into basic extortion, and it's interesting (for some definition of interesting) to see that such extortion is actually legal in the United States.
  - hmsimha 13y ago
    On the flipside then, a business that investigates a company's potential patent violations and makes them known to patent holders, but offers companies a paid way to opt out from their investigation (beforehand) sounds much more likely (and much more ignoble)
CalRobert 13y ago
There is no way in hell I'd start a company in the US. This BS is absolutely ridiculous. I can't imagine the thought of constantly living in fear I'd get sued for millions because I was using a fax machine, or some other ridiculously common piece of technology. It doesn't help that juries are apparently the dumbest people on earth.
RexRollman 13y ago
This is sad but not surprising. The game is stacked against the accused (they either pay a lot to defend themselves or pay in an effort to get the case to go away) and then they have to deal with venue shopping (Texas).
betterunix 13y ago
Great, another patent on abstract math upheld by our court system...
ytNumbers 13y ago
Since we can't seem to stop these horrible patent trolls, perhaps they could be reined in with a law that limits how much damage they can do. If a new law limited these sorts of claims to a grand total of 10% of a company's gross sales for the year, a small business could survive these kinds of attacks without having to pay millions of dollars for lawyers. If a business was attacked by multiple patent trolls, then those trolls would have to fight each other in court as they each argued that they deserve the lion's share of the capped 10% of the company's gross sales for the year. Since our current patent system is being thoroughly abused, the question we should be asking is: What can be done to limit patent trolls so that small businesses can survive? Because right now it is very lucrative to be a patent troll, so in the future, we could wind up with a ton of them. It's not a bright future.
- coldcode 13y ago
  Unless you got sued by 10 trolls.
deleted 13y ago
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eliben 13y ago
Isn't $2.3m negligible for the size of companies involved and even compared to the legal expenses for this case?
- josefresco 13y ago
  It is, the more important point is that going forward this judgement has set a precedent that can be used to win or leverage in future situations.
pezh0re 13y ago
It's cases like this that make me really miss Groklaw.
mkramlich 13y ago
I stopped reading a few pages in when kept talking about meta/social/gossip stuff rather that what the case was actually about, what the patents were about. Low S/N.
bane 13y ago
Just in time for me to throw some money at Newegg while I build out a new computer.
deleted 13y ago
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consultant23522 13y ago
Yesterday I was reading an article about this case that stated Newegg didn't even bother to call their witnesses to dispute the amount of damages that would've been caused by their patent violation. It gave the impression that they were so confident that they had roundly destroyed the plaintiff's arguments that they didn't even bother to follow standard operating procedure for how to fight these types of cases. On one hand, it's yet another nail in the coffin of innovation in our country. On the other hand, shame on Newegg's lawyers for being so hubris.
- talmand 13y ago
  I was confused by that as well. I agreed that, from what I read, that they made the plaintiff's arguments look quite silly. I would say the plaintiff's lawyer half argued Newegg's case for them with his whole a patent is still valid if prior art was a secret thing. My current thought was they planned to appeal from the beginning to get it out of that district. Why waste time in a district you know there's an automatic 80% chance you're going to lose?
ChikkaChiChi 13y ago
Marshall, Texas; population 24,751. Definitely small enough for the entire town to know and understand that voting in favor of a plaintiff today brings more money to your town tomorrow.
- talmand 13y ago
  It's the county seat as well, so lots of legal people walking around with town influence I'm sure.
mynegation 13y ago
Stupid question to those who know the US law: theoretically, would it be possible for Newegg to refuse to do business with residents of Texas, so it is impossible for other conmpanies to sue them in Texas? To other commentators: no offence meant for people of Texas, if it is how it works, it is just cold-blooded business decision, nothing more.
- djent 13y ago
  Companies in Texas can sue anyone they want as long that other entity is under United States jurisdiction.
caycep 13y ago
Were they expecting to set up a the criteria/grounds for appeal? If Newegg accomplished that, then they hopefully met their objective. I think the goal is to get it out of the Texas court and onto some place that is more objective.
dec0dedab0de 13y ago
I planned on shopping at Newegg this week anyway, but now maybe a bit more than normal.
bovermyer 13y ago
So... when are we going to abolish patents?
dreamdu5t 13y ago
I'm confused by people who both hold the position that these case are "patent trolls" while simultaneously supporting patents and copyright? This verdict is perfectly consistent with the reasoning and intention behind copyright and patent law.
CamperBob2 13y ago
I'm beginning to think that a sniper rifle is the best answer to these trolls. Props to Newegg for fighting the good fight.
excitom 13y ago
As a person with a computer science degree and years of experience in the software industry, I would love to be chosen for a jury like this so I could do my part in smacking down a troll. However I realize this will never happen precisely because I actually know something about the subject. Sadly, jurors are chosen for their ignorance and gullibility.
Totient 13y ago
Patent trolls are certainly a problem, but realistically you can't have laws without someone trying to abuse them. I think it might be more effective to attack the problem from the other end: making sure patents like don't get issued in the first place. Maybe it's not reasonable to expect every jury to understand the basics of encryption. But it is reasonable to expect the patent office to understand prior art in cryptography.

550 points by lukeholder 13y ago

"I feel fortunate to live in a country with a judicial system like this where a jury can decide these things" I still feel fortunate to live in this country but the dysfunctional patent system has nothing to do with it. The status quo is this: When you receive a letter from a patent troll, you're already out at least $50k or so, possibly several $100k or even more if you decide to fight on longer. You can receive such a letter simply for scanning and printing a pdf file, or operating a shopping cart on your site. This situation must be fixed.

saryant 13y ago

To those patting themselves on the back as we begin another round of Texas bashing (because, let's face it, for a number of people here that's their favorite part of patent stories), may I ask why you blame an entire state? When things go wrong in California or New York or Massachusetts, those states aren't blamed: the individuals take the heat! (What a concept!) But whenever something bad happens in Texas, somehow all 26 million of us are involved and culpable. Case in point: a few minutes ago there was a post here saying we should poison the water in East Texas to stop this. Thankfully, it has been deleted. Battling bigotry with bigotry is not likely to work. When Hollywood pushes for another batch of draconian copyright laws no one here raises up there hands and hopes for the "big one" to knock LA into the ocean. When municipalities go after Uber or AirBnb no one begs to push that entire state out of the union. Why the double standard? (I know why, no need to answer that question) Certainly as a Texan and tech person I'm not a fan of this ruling but the vitriol displayed here towards an entire state verges on disgusting. FWIW, I grew up in the Bay Area and across California, I'm not some Pineywoods hick who never left the trailer park. I am, however, quite tired of the hatred and, frankly, gleeful malevolence sometimes displayed on this site towards Texas.

jeswin 13y ago
_I completely agree with everything you have said. My reply is not about that._ But the comparison is not very apt. Hollywood's draconian copyright laws would mean that you can't watch a movie or listen to a song, which is no big sacrifice. Patents are an affront to your freedom. Any service, app or business you build will violate some patent or the other. Countries have chosen to hand over monopolies on ideas and thought. This may not affect many of us. But having to watch helplessly while companies like NewEgg suffer is very, very painful.
- saryant 13y ago
  Fair enough, it's a poor analogy. I absolutely agree with your assessment of patents however.
- astrodust 13y ago
  That's exactly it. Patents can affect anyone at any time, whereas copyright laws affect certain individuals that have violated the terms. Theoretically of course. There have been cases of people being sued for piracy when they don't even have a computer.
cm127 13y ago
What are you talking about? We bash Hollywood all the time. Now we're bashing East Texas - not all 26 million of you.
SwellJoe 13y ago
I'm a Texan (10 years in Houston, 10 years in Austin, and currently residing in Austin), and I'm one of the most vocally anti-Texas people in this thread (though I'm not suggesting poisoning the water). I'm just very frustrated. The future of Texas, just like the rest of the country (but very much so Texas), is technology. This one little town, and this one judge, seem to be hell-bent on destroying innovation. There's just so much wasted energy and effort, and it makes me sad to see the bad guys win so frequently (and these are bad guys; they've extorted millions from people who had no idea this really silly patent existed).
- cobrabyte 13y ago
  Agreed. As a fellow Texan, I'm embarrassed that this relatively small town has become the de facto venue for patent battles... especially those involving patent trolls. How would we go about changing this? Surely the rest of the nation is taking note at the bias afforded to patent trolls by Marshall. I just don't understand how, especially in this case, they could have sided with the troll. Is there an economic benefit for the people of Marshall to side with the trolls or are they just completely oblivious when it comes to technology cases? I am completely dumbfounded by this Texas court.
  - SwellJoe 13y ago
    Judges are elected in Texas, but I don't think that applies in the case of federal judges. The infamous T. John Ward retired a couple years back, but it seems like the tradition continues with whoever is hearing these cases now. I think, in the end, there needs to be patent reform...which just got shot down before it ever really even got any traction. So, I don't know. Educating people about the harmful effects of software patent law and patent trolls might be a useful start. This is pretty obscure stuff to most people.
ScottWhigham 13y ago
I think you're just being a tad over-sensitive here (and I say that as someone who moved to Dallas in 1987). I've been on HN for 4-5 years and I've never heard or seen "Texas bashing" here. Texas' population is almost 10% of the US. Texas is also the 2nd largest state, comprising almost 8% of the land mass of the US. Besides, I'd guess half of the HN crowd today are overseas - I doubt the average non-North American HN person could name more than 7 states. And of those 7, Texas, California, and New York are in every single person's list.
- warmwaffles 13y ago
  There has been a fair share of Texas bashing here. Mostly complaining about EDT and other various shenanigans going on.
Tloewald 13y ago
You should see the French-bashing here.
lsaferite 13y ago
> When things go wrong in California or New York or Massachusetts, those states aren't blamed: the individuals take the heat! (What a concept!) Well, as a Florida resident, I think we must be some exception to your rule then. It seems we always get blamed as a whole for the actions of the few.

defen 13y ago

It's getting late and I don't really have the energy to dig into this patent (http://www.google.com/patents/US5412730 http://www.google.com/patents/US5412730), but on a cursory reading I don't see how it differs from the encryption work that Claude Shannon and Alan Turing were doing during World War 2, later embodied as http://en.wikipedia.org/wiki/SIGSALY http://en.wikipedia.org/wiki/SIGSALY ... is it just because it transmits the data in "blocks"? Pretty low bar for novelty, there.

bradleyjg 13y ago

The original Anglo-Saxon juries were chosen from among local people because they knew the witnesses who would be testifying. The idea was that they could judge the credibility of the witnesses based on their direct experience with them. Then later on after the idea of an unbiased jury took hold, there arose a justifying theory that the jury could tell by careful observation whether or not a witness was telling the truth. This theory is dubious enough when applied to simple questions of outright lying. When it comes to judging expert witnesses testimony, it is totally bogus. If they don't want to create a patent office court to adjudicate these cases, at the very least Congress should authorize the appointment of special masters to do fact finding in patent cases.

rdtsc 13y ago
Moreover, there is a cottage industry of being an "expert" to testify for some of these technical issues. They are often experts in as much as they have been called before as "experts", even thought the industry they are supposedly explaining might consider them charlatans -- people who just know how to dress well and talk bullshit, but in a very convincing tone.
- codeka 13y ago
  That's basically how I saw them trying to paint Diffie in this trial: by pointing out that he hadn't graduated from university, that he wasn't a professor, that he didn't even invent PKC! It seems they managed to convince the jury at least.
  - danielweber 13y ago
    If he claimed to invent PKC and the other side points out he hadn't, his credibility goes down the toilet. I saw lots of love for Diffie's "I invented it" line. But if he overplayed his hand, he ended up hurting his side more than he helped it.
    - gknoy 13y ago
      When there are museums that consider you to have invented it, and you DID invent it (just perhaps were not the first, though that was not known at the time), it seems fair to say that you did. After all, we consider that both Newton and Leibnitz invented calculus.

venomsnake 13y ago

Well ... expect some bad stuff to happen. Like a company subsidiary shell company developing all business method IP overseas and "selling" it to the parent and when a lawsuit emerges they will have just enough funds to mount a defense and then blow the fuse company. That way shell companies will fight shell companies in court ... the fun.

droopybuns 13y ago

Uhhh.... RC4 + SSL = broken cryptosystem, right? We're not bummed about additional incentives to avoid this broken approach to TLS, are we? This is actually a fucking good thing.

EdgarVerona 13y ago
We're not bummed out because the cryptosystem is broken, but rather that every victory for a faulty patent is a victory for the system around which faulty patents are allowed to thrive (and strangle out others). Regardless of the tech behind the "patent" and whether it's feasible or not, it's another situation where a dubious patent has wrung money out of someone by exploiting our vulnerable system.
nitrogen 13y ago
Isn't SSL in this context a shorthand for SSL or TLS? A quick visit to Newegg's site shows them using TLS 1.0. Has RC4 been publicly broken?
jsmeaton 13y ago
RC4 is no longer recommended, but is the best supported method as I understand it [0]. There's also the issue that the most widely available versions of openssl do not support PFS or tls 1.2. You need to download and compile a newer version of openssl (rather than using packages - RHEL in particular since that's what we use), and then compile whatever web server or proxy again with the newer openssl support. [0] https://community.qualys.com/blogs/securitylabs/2013/03/19/rc4-in-tls-is-broken-now-what https://community.qualys.com/blogs/securitylabs/2013/03/19/r...

lifeisstillgood 13y ago

"We've heard a good bit in this courtroom about public key encryption," said Albright. "Are you familiar with that?" "Yes, I am," said Diffie, in what surely qualified as the biggest understatement of the trial. "And how is it that you're familiar with public key encryption?" "I invented it." I think I see the trailer for the TV Mini series right there :-)

hobs 13y ago
And they still lost... what? Every time I read about our patent system the blood drains from my face, how do we fix such a broken system?
- lifeisstillgood 13y ago
  Its worth thinking what do we want? - That we have good and effective Intellectual Property laws. It seems one of the big lessons of the Industrial revolution was the right property laws. The principles behind patents and copyright law make sense in this regard. Its the specifics that have problems. - The analogy to physical property is worth following more deeply - countries such as in S America, ie Chilie, are trying to undergo property law revolutions, and often local knowledge is clear - everyone "knows" that Juan lives in that building and has done since he was born, and maintains it for his family. Therefore it is "his" house. Our IP laws generally need to come to some agreement on a similar situation - where there is clear contentious dispute, local (ie expert) knowledge is needed. - This is more or less what is happening here - someone is claiming Juan's house was actually their house. A jury was asked to decide with clear expert local knowledge. So the process is what we want. Its just in this example we choose a bunch of idiots for the jury. - Software should be copyright. This will cause difficulties in "porting" software, and in doing the same algorithm in php and then perl. summary: IP rights is more likely to be a good thing than a bad thing, just like property rights. However bad implementations of property law have seemingly held back countries like Brazil / Chile, and we do not really know what IP law should look like to be most suited. I prefer allowing local knowledge to be primary in cases of dispute. (http://www.ted.com/talks/niall_ferguson_the_6_killer_apps_of_prosperity.html http://www.ted.com/talks/niall_ferguson_the_6_killer_apps_of...)

sytelus 13y ago

Article starts with the most important two words: MARSHALL, TX From Wikipedia: Marshall has a reputation for plaintiff-friendly juries for the 5% of patent lawsuits that reach trial, resulting in 78% plaintiff wins. I've stopped myself getting surprised for any patent suits where troll gloriously wins and that decision comes from a court in Marshall. This town's economy probably runs on lawsuits that trolls bring in and jury members from the town seem to have special incentive to favor plaintiffs almost 4 out of 5 times!

tedunangst 13y ago
Without knowing the percentage of cases that result in plaintiff wins in other cities, you can't draw any meaningful conclusions from that stat.
- DannyBee 13y ago
  Well, he is actually right that the town is essentially funded by patent lawsuits. http://www.nytimes.com/2006/09/24/business/24ward.html?_r=0 http://www.nytimes.com/2006/09/24/business/24ward.html?_r=0
  - brador 13y ago
    Doesn't that make the trial unfair? Isn't "no associated interest" a basic marker of a fair trial?
    - amalag 13y ago
      Thats a tough one for an appeal though, showing the jury was unfair.
    - DannyBee 13y ago
      It's very hard to show actual jury bias. Though i bet if the anti-patent groups got together and bought marshall a new football stadium, the win rates would go down ....

garthdog 13y ago

Can we put up billboards in East Texas letting potential jurists know what the stakes for the country are?

charlysisto 13y ago

sadly, one word comes in mind : the new mafia.

Osiris 13y ago

Why are patent disputes resolved by laymen (juries) rather than experts in law and the area of study of the patent itself? I just don't see how people completely unfamiliar with the subject matter at hand can be expected to understand highly technical arguments necessarily to determine patent validity.

baddox 13y ago
Who would judge whether someone was truly an "expert" in the area of study?
- PeterisP 13y ago
  Judges would be perfectly capable of doing so.
- khafra 13y ago
  Why not judge by objective metrics, like whether the expert's name is included in one of the oldest and most important protocols in the area of study?
  - baddox 13y ago
    At the end of the day, real people have to choose which objective metrics to look at, and real people then have to look at those metrics and make the actual call.

ck2 13y ago

I'm curious if these juries have any college education.

bdcravens 13y ago
You're implying that their conclusion is the result of them being uneducated? Pretty sure it's the result of ideological bias, not intellectual ability or knowledge.
- ck2 13y ago
  No I meant it in regard to being taught critical thinking. College isn't a guarantee of being able to process things that way or the only way to acquire such habits, but it is a good indicator.

codygman 13y ago

Can we troll the patent trolls yet?

pistle 13y ago
Not really. Arbitrage is already pretty advanced. The analogy to bitcoin mining rigs and mining pools isn't far-fetched. Some well-positioned people smell it and started refining the process while building up legal machines for consolidating power and squeezing every advantage out of the system. They also have already moved ahead in protecting interests from retribution of the noble AND pitchfork variety. Let's also not forget that there are parties shaking hands over a couple few million... and we're just sitting here worrying that someone is plotting a highway tax for when we finally ascend to such neighborhoods.

voltagex_ 13y ago

Oh. Crap.

deleted 13y ago

[deleted]

scotth 13y ago

To put it bluntly, that fucking sucks.

SwellJoe 13y ago

Disgusting. This is one of the reasons Texas has such a bad reputation: Ignorant juries and judges in the pocket of patent trolls.

clarkm 13y ago
A bad reputation among who? Maybe in your insular circle, but certainly not for the majority of middle-class Americans. It has the highest in migration rate for a reason.
- SwellJoe 13y ago
  Yeah, I live here (Austin; spent 10 years in Houston, too). I love Texas. But, Texas does have a reputation for being backward, regressive, racist, and willfully ignorant. It was Texas State Board of Education that led to a decades-long battle over evolution. If that's not embarrassing, I don't know what is. Texas also just passed a law that will shut down all but 4 (maybe 5) of the health clinics that offer abortion in the entire state. Those clinics are also where a lot of folks get birth control, STD testing, and often where poor women go for gynecological care. Texans will spend 15% more on healthcare because of the stubbornness of our governor. Whether one agrees with Obamacare or not, it's pretty nasty to intentionally screw over poor people out of nothing more than spite. Texas definitely has a bad reputation. And, it deserves that bad reputation.
  - jonhinson 13y ago
    As a native Texan (I've lived in the Houston area for about 26 years), I agree with most of what you say. RE: the clinics, instead of closing, could those clinics continue to offer the other services and simply stop offering abortions? I feel like it's throwing the baby out with the bath water to just shut down altogether. Perhaps I am just misunderstanding the legislation, so please correct me if I'm wrong.
    - angersock 13y ago
      The hell of it is, we've still got one of the strongest economies in the US, especially if you're looking for more traditional blue-collar labor.

wnevets 13y ago

what a disgrace

gkoberger 13y ago

The patent involved basic traffic encryption (SSL or TLS combined with the RC4 cipher), and the company already has made $45 million off it. Here's some more info on the company they lost to: http://www.techdirt.com/articles/20121109/02321120982/meet-patent-troll-suing-hundreds-companies-encrypting-web-traffic.shtml http://www.techdirt.com/articles/20121109/02321120982/meet-p... TL;DR: They're patent trolls.

MereInterest 13y ago
>the company already has made $45 million off it I know that saying "made" is the generic form for acquiring money through any means. However, it also carries the connotations of production, of creation. I would rather say that they have already extorted $45 million using it.
- mbennett 13y ago
  The worst thing about this award is that it gives them more money to launch even more patent lawsuits against more companies.
- arh68 13y ago
  Well since Newegg made the money, perhaps TQP was awarded the $45M that Newegg et al made, or TQP was shown to deserve the $45M that Newegg et al made. But you're right, let's be clear: TQP didn't create any wealth here. EDIT: I'm mixing numbers. Not all of the 45M was from Newegg.
- reginaldjcooper 13y ago
  If the copyright enthusiasts can misuse legal terminology to refer to copyright infringement as actual theft, I say let's go ahead and call this a theft as well. We'd be closer to the truth.
yeukhon 13y ago
So they have six more years to sue. Can they renew and is there any plan they will renew this? Even though RC4 is no longer recommended I don't see us moving away from it for another 5-6 years given many servers probably can't upgrade to newer ciphers (I am thinking about those old RedHat servers). Correct me if I am wrong though.

rwbt 13y ago

Does the jury give a detailed explanation beyond the judgement? Also how come all these patent trolls are incorporated in Texas?

daliusd 13y ago
A little bit information here: http://en.wikipedia.org/wiki/United_States_District_Court_for_the_Eastern_District_of_Texas#Patent_litigation http://en.wikipedia.org/wiki/United_States_District_Court_fo... While it would be interesting to know why it happens in Texas.
- talmand 13y ago
  It had to happen somewhere. Lawyers just like to go where they think they have a better chance of winning. You can see something similar on a local level. Being accused of certain type of crime? You really want this judge. Having an argument with your neighbor over a fence issue? Well, let's try to get this judge because I know he doesn't like that guy's uncle.

adamnemecek 13y ago

That's terrible but I feel like they will win once they appeal the decision.

Fishrock123 13y ago

Bullcrap.

loganfsmyth 13y ago

We'll have to hope it goes better on appeal. I would be very interested to hear the jurors reasoning.

downer96 13y ago
If the glove don't fit, you must acquit.

taspeotis 13y ago

Optimism please, they've beaten patents on appeal before: > "We're certainly very disappointed," said Cheng. "We respectfully disagree with the verdict that the jury reached tonight. We fully intend, as we did in the Soverain case, to take this case up on appeal and vindicate our rights." > Soverain was the "shopping cart" patent that Newegg was ordered to pay $2.5 million for, but the company then knocked it out on appeal. Soverain's damage request was huge for Newegg: $34 million.

kintamanimatt 13y ago
I'm not sure why one should be optimistic. Even if they win, they've lost; the legal costs alone are silly and aren't paid for by the loser.
- indrax 13y ago
  If they won a previous case on appeal, and as micahgoulart observes didn't use a potentially valuable witness in this case. This suggests a strategy of bleeding out the patent trolls through their lawyers. A troll's business model relies mostly on settlements, newegg can just keep selling computers.
  - Zancarius 13y ago
    > This suggests a strategy of bleeding out the patent trolls through their lawyers. I was depressed when I read the verdict, but your point here gives me new hope. I hadn't thought about that. I wonder if they're going to hold back on their witnesses then for the appeals process as a sort of "ace in the hole?" I further have to wonder if the reason they decided not to use that witness was because they suspected they were going to lose this case and have to appeal? I can only hope that the appeals process ends up invalidating this patent.
- alextingle 13y ago
  No. Even if they lose, they've won. The whole point of their strategy is to discourage the next patent troll from trying to shake them down. Even if they lose this case, they will have continued to demonstrate that they are no push over.

brianobush 13y ago

Makes me wonder why we allow juries to hear patent disputes. Do they really understand patents and their terse wording? I would rather have a jury of individuals that would be able to read, code and test the same concepts that they are deciding on.

machrider 13y ago
This famously came up during the Apple/Samsung suit, where the jury's foreman went around making misinformed statements about patent law in mainstream media: http://www.techdirt.com/articles/20120830/02063020214/ http://www.techdirt.com/articles/20120830/02063020214/
talmand 13y ago
But some people claim the reason to use that district is because the jury pool does have knowledge and experience directly relating to patent matters. We see how that is turning out. Although, I disagree with the theory.

zacinbusiness 13y ago

I've never had the pleasure of serving in a jury. How does it work? I have been under the impression that all jury members must agree on a single verdict? I know for a fact that I would not agree with this verdict. And I can't rationalize finding against Newegg here. Can someone who can see the other side (whether or not you agree) explain it here?

valleyer 13y ago
You're thinking of criminal cases. Many civil trials only require a certain majority (say, nine of twelve) to find a verdict.
- zacinbusiness 13y ago
  Ah! I didn't know that. And of course most (all?) of these cases are civil cases. That makes much more sense to me, thanks!

awwducks 13y ago

Here's coverage from the local paper. http://www.marshallnewsmessenger.com/news/online-retailer-newegg-s-patent-infringement-case-begins-in-marshall/article_fe84fb88-636d-5c3f-a460-9abe0e4fbfc9.html http://www.marshallnewsmessenger.com/news/online-retailer-ne... Seems to be more of a TQP slant to it.

droithomme 13y ago
Thanks for that. It describes the sort of reasoning very well that the plantiff's attorney knows appeals to people in the area: > Fenster described the inventor of the patent, Michael Jones, as a hard worker. > “He doesn’t have all these fancy degrees,” said Fenster. “He’s a hard worker, creative, smart, an innovative guy, and he loves technology. He’s great at recognizing problems of the future and finding solutions.” The article is entirely one sided and reads as if the plaintiff himself wrote it. As it is the only exciting thing happening in town, many of the jury member's family and friends will be reading articles of this sort during these trials, representing only one side of the case.- Amazing that the article notes the patent was awarded in 1995 and fails to mention that RC4 was invented in 1987.
- EdgarVerona 13y ago
  Wow, pardon my french, but what the fuck is this article. This sounds like a paid advertisement. "The company, owned by Erich Spangenberg, of Dallas, is seeking a reasonable royalty of $5.1 million." How much did they get paid for that line?
  - msmith 13y ago
    Used in this context, "reasonable royalty" is a legal term that describes the money that is to be paid due to the infringement. I don't believe the author was making a judgement call on the fairness of the award.
    - EdgarVerona 13y ago
      Oh! Okay, this explains a great deal.

batgaijin 13y ago

Doesn't this just motivate startups to incorporate somewhere where software patents aren't enforced, like New Zealand? http://www.cnn.com/2013/10/01/business/10-best-places-to-start/ http://www.cnn.com/2013/10/01/business/10-best-places-to-sta... I mean at the end of the day this lack of timely reform is fundamentally making people look for asymmetric ways to entirely avoid problems. Is that the way society should be driven? I think that is an unstable driver of future events --- a society that cannot reform itself in a timely manner, that cannot properly forecast events and repercussions, is a society that is forgetting it's responsibility for balancing itself. I really do not like this behavior; it is abhorrent of a society that can be a seer. I mean there is the usual belief that we are all equal and deserve equality --- but that cannot happen as long as we inherit citizenship, wealth and networks. It is a nice belief but simply cannot be rendered in any sort of predictable manner. This creates a situation. Their are private discussions on the ongoing nature of patents --- but I feel that more than anything people are forgetting that as the point of a corporation is it's superhuman predictable nature, that the further antagonization of new corporations will balance itself not with a mutated form of socialism but with an asymmetric alliance of corporations - one which favors unpredictability and an increased rate of change. Wealth and the rate of innovation are separate --- and that fiction will reveal itself at a much faster rate if proper steps are not taken in a timely manner.

lambda 13y ago
Not really. You're going to want to sell your products in the US anyhow; the New Zealand market is tiny compared to the US market. If you sell your products in the US market, you have to play by the US's patent rules or your products won't be able to be imported (but as Samsung has found out, popular US based companies like Apple can get federal government intervention to veto an import ban on their products, but Samsung can't do the same: http://www.bloomberg.com/news/2013-10-08/samsung-loses-bid-for-presidential-veto-of-apple-won-import-ban.html http://www.bloomberg.com/news/2013-10-08/samsung-loses-bid-f...).
- batgaijin 13y ago
  What if the real money is in B2B and this is simply going to push the expenditure into a special trade communication zone? Are American companies going to be banned from certain expenditures? Is is it possible that people would create a proxy corporation to leverage the service in different areas? I'm probably acting like an idiot. But I mean I think this just is creating a recipe for crazy lawyers to try some shit on someones dime.

pbreit 13y ago

Kudos to NewEgg for the immense risk in fighting these.

droithomme 13y ago

It says this patent covers using SSL with RC4. SSL dates back to Netscape, was released in 1995, and has no one involved in it has anything to do with the patent holder here. RC4 was designed in 1987 by Ron Rivest who also has nothing to do with this case. Someone named Michael Jones patented using SSL with RC4. Which in seems was a known and used combination at the time he did so, as was testified by the expert witness? But the jury thought that not relevant. The patent would seem to avoidable if say using AES instead. Caution: I don't know what I am talking about and just looked the above up on wikipedia, which I probably misunderstood. Hopefully someone who understands this in more depth will post.

leeoniya 13y ago
going forward, maybe. but AES was not standardized until 2001, and not in wide browser adoption for what? another 10 years?
- salient 13y ago
  Maybe this will be the motivation everyone else needs to dump RC4? http://googleonlinesecurity.blogspot.com/2013/11/a-roster-of-tls-cipher-suites-weaknesses.html http://googleonlinesecurity.blogspot.com/2013/11/a-roster-of...
  - tedunangst 13y ago
    The patent has already expired. Feel free to use it to your heart's content.
  - harshreality 13y ago
    Worse, there's the allegation that NSA can crack RC4 in realtime (although I don't know what that means, other than "fast"). https://twitter.com/ioerror/status/398059565947699200 https://twitter.com/ioerror/status/398059565947699200
    - Already__Taken 13y ago

kunai 13y ago

Does the jury for a highly specialized patent case exist and function in largely the same way as a jury for other trials? Namely, "peers" instead of educated individuals on the particular topic at hand? If that's the case, the United States needs some serious judicial reform.

valleyer 13y ago
Yes, juries are selected just like any other trial. They are educated on the relevant law and case law by the presiding judge and expected to serve simply as "finders of fact". I'm not sure I agree that this is the actual problem with the patent system.
carbocation 13y ago
By extension, would you prefer that a panel of doctors preside over malpractice cases?

zellyn 13y ago

Perhaps someone who knows more about the legal system can help me understand something: at this point, it's well-known that these areas of Texas are good for patent disputes: they receive national attention, and a massive influx of spending as companies travel there to fight court battles. Given that, surely any jury made up of locals has a huge incentive not to kill the golden goose and deter patent trolling by letting defendants win. Is there not a conflict of interest here?

ndesaulniers 13y ago
I could have sworn that due to a below average crime rate, the legal system is able to get patent litigation through quicker.
- Guvante 13y ago
  You might have been correct originally, but the number of patent cases has changed the focus.
jamesaguilar 13y ago
There are actually other districts that have higher win rates for patent trolls. One attorney told me that people use EDT simply because that district has built up a fair amount of knowledge and experience in this area of law, and thus the cases are cheaper to fight there. I don't know this to be true, this is just what I've heard.
- EdgarVerona 13y ago
  If they've built up knowledge and experience, they ought to prove it by rendering verdicts that make sense. Maybe it's just a case of confirmation bias on my part, but it feels like they've got their heads firmly lodged up their asses over there.
- saryant 13y ago
  FWIW, a friend of mine who's an IP lawyer said the same to me.

linuxhansl 13y ago

> "I feel fortunate to live in a country with a judicial system like this where a jury can decide these things," [Jones] said. Of course he does. It's the very judicial system that presented him with an easy $45m. He is a parasite (quite literally) and he knows it.

EdgarVerona 13y ago
Indeed, he might as well have said "No other country would let me get away with the shit I'm pulling over on people right now." This whole situation is quite disappointing. Kudos to Newegg for trying, at the very least.

natch 13y ago

Bring a California company in front of a Texas jury, and call wild-haired Stanford visiting professor Diffie as a witness? I'm afraid this says more about the bigotry of the jury members toward Californians than it does about the case. My hunch is they (wrongly in so many ways) thought they would teach the hippie a lesson.

clarkm 13y ago
And you think this because?
- natch 13y ago
  Because of the jury's decision.
tsotha 13y ago
Do you have any actual reason to believe this?
- natch 13y ago
  The jury's decision... frankly I trust Whit Diffie on this stuff more than I would trust a jury from Marshall.
  - tsotha 13y ago
    You're attributing motivation, though, based on no evidence.
    - deleted 13y ago
      [deleted]
    - natch 13y ago
      It's a hunch, as I said. My evidence is my own experience, but that's known only to me, to be fair. You have a better hunch? Let's hear it.

micahgoulart 13y ago

I think Newegg was complacent, perhaps a bit cocky, bringing in the expert on encryption, pandering to the jury and going through a humorous exchange on his knowledge of it, thinking they had it in the bag after the shopping cart win. And then the defense surprisingly declined at the end to rebut the damages claim of $5.1 million: "Then came another stunner: Newegg rested its case. It did so without putting on its expert witness to rebut TQP's $5.1 million damage claim—even though documents in the court docket clearly indicate the company had such a witness." [1] http://arstechnica.com/tech-policy/2013/11/newegg-trial-crypto-legend-diffie-takes-the-stand-to-knock-out-patent/2/ http://arstechnica.com/tech-policy/2013/11/newegg-trial-cryp...

erichurkman 13y ago
Could NewEgg simply be wanting to escalate their appeal to a higher court, and thus have their eventual verdict carry more weight? This operates on the gamble that NewEgg believes they would be eventually triumphant and that the cost of a longer fight is less than the damages of a lower court. (Speculation, but perhaps reasonable, given NewEgg's previous victories.)
- talmand 13y ago
  Don't forget going to a higher court will likely get the case out of that district's court.
WildUtah 13y ago
Newegg's strategy is to invalidate patents in order to discourage future litigants. Just winning a cheaper verdict today won't reduce their costs in the long run by much. The PTO issues hundreds or thousands of new patents every year on business processes Newegg is already using so there's no limit on potential future litigation.
ScottBurson 13y ago
They had planned to appeal anyway if they lost. Getting a damage award reduced on appeal is relatively common. And the problem with taking about the award amount after arguing that the patent is flat-out invalid is that one can seem to be conceding the infringement argument. IANAL, but it seems like a reasonable gamble to me.

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davidw 13y ago

Depressing, but this might be a good time to donate to those fighting for patent reform, like EFF.org

meritt 13y ago

"Why Patent Trolls Worldwide Love Marshall, Texas" -- http://www.techdirt.com/articles/20060203/0332207.shtml http://www.techdirt.com/articles/20060203/0332207.shtml Nearly 8 years ago. Unfortunately nothing whatsoever has changed.

shmerl 13y ago

Is the jury required to explain the logic of the decision, or it's simply "we decide this"? Rejection of such obvious proof of patent invalidity and existence of prior art looks pretty bad.

nitrogen 13y ago
The topic of jury secrecy came up in the Apple vs. Samsung case. I can't find a link to the specific rules right now, but basically, jury deliberations are secret.
- talmand 13y ago
  If there's no gag order, jurors will often talk about what happened. Now, whether to believe them or not is another thing.
  - shmerl 13y ago
    So, did they explain here why they sided with the troll?
    - talmand 13y ago
      I have yet to hear of anyone coming forward. I guess the trial was not big enough news for someone to attempt to get their fifteen minutes of fame.

deleted 13y ago

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smegel 13y ago

Why can't the world be just, I don't know, more decent and reasonable and just?

mattlutze 13y ago

A few have commented how, internally to the IP law industry, the district is known to have a lot of specific domain experience with the argument of IP law. I can definitely understand why that would be attractive to patent-holding firms, in the way that Delaware is attractive to large corporations. Most of us not in the IP industry think a lot of these suits are ridiculous, and it's because we don't make our lives by the reality of how IP law is structured. These cases are ridiculous because IP law is ridiculous. It's not Marshall, TX's fault that IP law is ridiculous, and these juries very well may be the most knowledgeable jurours out there. That fact is dangerous, however, because this town's specialized experience makes it as if these companies are arguing cases in front of a jury of paralegals instead of representatives of the public, which absolutely will bias results. Part of the reason we have juries is to balance the law with common sense. Common sense means something different when you're almost as knowledgeable about the law as the lawyers in front of you.

xradionut 13y ago
"It's not Marshall, TX's fault that IP law is ridiculous, and these juries very well may be the most knowledgeable jurours out there." As a lifelong Texan I do believe you overestimate the knowledge base of people that willing live in East Texas. Most of the technical smart folks in Texas have migrated to Austin, DFW, San Antonio or Houston for real jobs. And most of them don't have a fucking clue about encryption. East Texas is a dream situation for attorneys considering the average knowledge is lower than the rest of this state. Have this trial in Dallas and you might get a engineer from TI or a statistician from my company on the jury. East Texas is what we in the city refer to as the "Sticks". The per capita income is half that of even the older suburbs in Dallas.
- talmand 13y ago
  I agree. I, for one, am tired of seeing this nonsense that the jury pool in that district has a high-level knowledge and experience with matters pertaining to patents. Patent trolls want that district because that's where they win the most. It's similar as to why they avoid certain districts, because that's where they lose the most. If another district had the reverse stats, where a large number of patent suits are filed but patent trolls lose 80% of the time, you would have a district that had a "high knowledge base" in the jury pool. Patent trolls would avoid it like the plaque, despite having such a supposed intelligent jury pool.

beaker52 13y ago

Imagine where we could be if everyone openly shared everything they discovered or invented. Just imagine a world where we co-operated instead of making life harder for one another.

josscrowcroft 13y ago

How can your average startup and company owner rest assured that they're not unconsciously walking into a patent troll's lair? I might be unknowingly infringing patents nobody has heard of (except companies like these). Business idea: a service that investigates your stack (with your permission) and verifies that you're not likely to be sued.

justincormack 13y ago
its hard to guess what trolls will do. You could come to Europe.
- TheLegace 13y ago
  What about Australia, Canada or New Zealand? And what happens if you would like to offer products and services in the US(which is a huge market). I'm assuming just like Samsung they are still liable if they want to sell something. I'm genuinely curious and concerned.
  - justincormack 13y ago
    Offering products in the US is a problem, so Europe is perhaps more attractive as the market is larger...
ghshephard 13y ago
Mission impossible, as any business that operates is likely infringing on thousands, it not tens of thousands of patents every single day. Patent law has transformed into basic extortion, and it's interesting (for some definition of interesting) to see that such extortion is actually legal in the United States.
- hmsimha 13y ago
  On the flipside then, a business that investigates a company's potential patent violations and makes them known to patent holders, but offers companies a paid way to opt out from their investigation (beforehand) sounds much more likely (and much more ignoble)

CalRobert 13y ago

There is no way in hell I'd start a company in the US. This BS is absolutely ridiculous. I can't imagine the thought of constantly living in fear I'd get sued for millions because I was using a fax machine, or some other ridiculously common piece of technology. It doesn't help that juries are apparently the dumbest people on earth.

RexRollman 13y ago

This is sad but not surprising. The game is stacked against the accused (they either pay a lot to defend themselves or pay in an effort to get the case to go away) and then they have to deal with venue shopping (Texas).

betterunix 13y ago

Great, another patent on abstract math upheld by our court system...

ytNumbers 13y ago

Since we can't seem to stop these horrible patent trolls, perhaps they could be reined in with a law that limits how much damage they can do. If a new law limited these sorts of claims to a grand total of 10% of a company's gross sales for the year, a small business could survive these kinds of attacks without having to pay millions of dollars for lawyers. If a business was attacked by multiple patent trolls, then those trolls would have to fight each other in court as they each argued that they deserve the lion's share of the capped 10% of the company's gross sales for the year. Since our current patent system is being thoroughly abused, the question we should be asking is: What can be done to limit patent trolls so that small businesses can survive? Because right now it is very lucrative to be a patent troll, so in the future, we could wind up with a ton of them. It's not a bright future.

coldcode 13y ago
Unless you got sued by 10 trolls.

deleted 13y ago

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eliben 13y ago

Isn't $2.3m negligible for the size of companies involved and even compared to the legal expenses for this case?

josefresco 13y ago
It is, the more important point is that going forward this judgement has set a precedent that can be used to win or leverage in future situations.

pezh0re 13y ago

It's cases like this that make me really miss Groklaw.

mkramlich 13y ago

I stopped reading a few pages in when kept talking about meta/social/gossip stuff rather that what the case was actually about, what the patents were about. Low S/N.

bane 13y ago

Just in time for me to throw some money at Newegg while I build out a new computer.

deleted 13y ago

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consultant23522 13y ago

Yesterday I was reading an article about this case that stated Newegg didn't even bother to call their witnesses to dispute the amount of damages that would've been caused by their patent violation. It gave the impression that they were so confident that they had roundly destroyed the plaintiff's arguments that they didn't even bother to follow standard operating procedure for how to fight these types of cases. On one hand, it's yet another nail in the coffin of innovation in our country. On the other hand, shame on Newegg's lawyers for being so hubris.

talmand 13y ago
I was confused by that as well. I agreed that, from what I read, that they made the plaintiff's arguments look quite silly. I would say the plaintiff's lawyer half argued Newegg's case for them with his whole a patent is still valid if prior art was a secret thing. My current thought was they planned to appeal from the beginning to get it out of that district. Why waste time in a district you know there's an automatic 80% chance you're going to lose?

ChikkaChiChi 13y ago

Marshall, Texas; population 24,751. Definitely small enough for the entire town to know and understand that voting in favor of a plaintiff today brings more money to your town tomorrow.

talmand 13y ago
It's the county seat as well, so lots of legal people walking around with town influence I'm sure.

mynegation 13y ago

Stupid question to those who know the US law: theoretically, would it be possible for Newegg to refuse to do business with residents of Texas, so it is impossible for other conmpanies to sue them in Texas? To other commentators: no offence meant for people of Texas, if it is how it works, it is just cold-blooded business decision, nothing more.

djent 13y ago
Companies in Texas can sue anyone they want as long that other entity is under United States jurisdiction.

caycep 13y ago

Were they expecting to set up a the criteria/grounds for appeal? If Newegg accomplished that, then they hopefully met their objective. I think the goal is to get it out of the Texas court and onto some place that is more objective.

dec0dedab0de 13y ago

I planned on shopping at Newegg this week anyway, but now maybe a bit more than normal.

bovermyer 13y ago

So... when are we going to abolish patents?

dreamdu5t 13y ago

I'm confused by people who both hold the position that these case are "patent trolls" while simultaneously supporting patents and copyright? This verdict is perfectly consistent with the reasoning and intention behind copyright and patent law.

CamperBob2 13y ago

I'm beginning to think that a sniper rifle is the best answer to these trolls. Props to Newegg for fighting the good fight.

excitom 13y ago

As a person with a computer science degree and years of experience in the software industry, I would love to be chosen for a jury like this so I could do my part in smacking down a troll. However I realize this will never happen precisely because I actually know something about the subject. Sadly, jurors are chosen for their ignorance and gullibility.

Totient 13y ago

Patent trolls are certainly a problem, but realistically you can't have laws without someone trying to abuse them. I think it might be more effective to attack the problem from the other end: making sure patents like don't get issued in the first place. Maybe it's not reasonable to expect every jury to understand the basics of encryption. But it is reasonable to expect the patent office to understand prior art in cryptography.