14 ms·

Don't mess with Newegg

1469 points by keerthiko 12y ago

hollerith 12y ago
Right now was a good time for me to learn that Newegg takes a principled stand against patent trolls because I've been thinking of starting to buy from Newegg because I keep on hearing bad things about how Amazon treats its employees.
thedaveoflife 12y ago
The lesson from this article: PR can be an effective legal deterrent. Publicize your victories.
tdicola 12y ago
Wow I love that they're taking a stand, and got quite a laugh out of the image. Definitely makes me want to support Newegg as a customer much more in the future.
- jerrytsai 12y ago
  +1
  - saturdayplace 12y ago
    Instead of posting a comment like this, it's generally better just to upvote the comment you're agreeing with. The mods are trying to optimize the signal:noise, and there's not much signal in a two-character comment.
    - Chronic26 12y ago
      Downvote Look at how funny I am.
- theandrewbailey 12y ago
  I'm proud to be a Newegg customer because they call me their customer, not their consumer.
heyheyhey 12y ago
> Most companies choose not to recover their legal fees in patent suits because prevailing defendants are required to demonstrate that a plaintiff acted in bad faith. This is extremely difficult to prove and it’s usually easier to just walk away and count your losses – unless your name is Lee Cheng. Interesting. So if you're a patent troll, there is little to no downside to constantly suing companies aside from the legal fees?
- jameskilton 12y ago
  Exactly. This is the main reason why patent trolling even exists today, because the troll companies never really lose. This is also the primary aspect of patent troll legislation (punish companies harshly that file frivolous claims) with HUGE bipartisan support, that has just been shelved. http://www.nytimes.com/2014/05/22/business/legislation-to-protect-against-patent-trolls-is-shelved.html http://www.nytimes.com/2014/05/22/business/legislation-to-pr...
- jliptzin 12y ago
  Legal fees? I would assume they have a team of full-time attorneys on payroll. Since their legal fees are fixed, they're incentivized to use that team as much as possible.
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swang 12y ago
NewEgg and Nintendo seem to be the only companies willing to actively fight patent trolls. Anyone else?
- tdicola 12y ago
  Adam Carolla is pooling funds to battle a patent troll that is suing him for podcasting: http://fundanything.com/patenttroll?locale=en http://fundanything.com/patenttroll?locale=en
- harmegido 12y ago
  I'm not down with Nintendo - their games are region-locked.
- shawnreilly 12y ago
  Rackspace is another company that stands up to fight Patent Trolls. And they run OpenStack. (Double the Awesome)
zinxq 12y ago
Whenever I can, I buy from Newegg for this reason.
slaven 12y ago
I feel it's really important for us, as consumers, to support companies like Newegg. This strategy is really risky for them (despite all the good PR it brings). It's easy for patent trolls to just move onto different targets and avoid suing combative companies like Newegg, but if we vote with our dollars maybe more companies will see that they too should take a stand.
suprgeek 12y ago
Awesome Principled Stand by Newegg! This is one of the reasons to support buying from them. However this only underscores how easy it is to sue over flimsy patents and how expensive and time-consuming it is to go after and shut down these horrible trolls. Add to this the fact that Patent reform was killed in the Senate by Pat Leahy & Harry Reid (Both of whom are notorious supporters of trial lawyers & pharma) and it is a net loss for the tech industry this week
- mst 12y ago
  What fascinates me is how easy it is to fight if you practice. Lee Cheng is impressive, but I suspect his secret weapon is actually having fought a bunch of such cases knowing he has a 'fuck them, they are going to lose' mandate. An enemy who's very practiced at -not- settling is probably not something his opponents know how to deal with.
  - calbear81 12y ago
    Newegg has always been against paying out even way back in the day when I worked there. In the early days of patent trolling, someone sued us in a printer-related lawsuit and they offered to settle for a small sum (VERY small). Basically, the in-house lawyer said that it would cost more money to fight it given his hourly wage but that the CEO was not going to pay if it was a frivolous lawsuit. I see that the same principle has persisted now, a decade later.
    - mikeash 12y ago
      It's strange that more companies don't see the long term problems created by signaling that you're willing to spend money to settle frivolous lawsuits. Another symptom of the corporate world's excessive focus on the short term?
      - tmerr 12y ago
        Not all companies have as much power as Newegg to fight back. I'm guessing it does often make financial sense to just pay it, otherwise companies would have turned the tables already. I don't think it's a lack of long term thinking as much as it is a tragedy of the commons related situation.
arjn 12y ago
Newegg is my hero!
mixmax 12y ago
It seems to me that the legal system in the US is largely broken, and that just about anyone can be sued if only you find the right grounds. Being sued and defending yourself is enormously expensive which is what patent trolls exploit. Why not use this offensively against patent trolls? Find all sorts of ways to take them to court, the American legal seems to have plenty of opportunities in that regard. There are some problems with standing, but I'm sure that a concerted effort could be effective. Sue them into the ground with guns blazing. Sue them for everything from not upholding workers rights, to misleading advertising and spelling mistakes. Make them taste their own medicine. The effort could be crowdsourced.
- jamra 12y ago
  The law firms that back up patent trolls are very large and very powerful. The largest and most powerful in the nation.
  - mixmax 12y ago
    This is why extortion works - if your enemy is more powerful than you chances are you will subdue. The mafia figured this out centuries ago. If you don't stand up to a bully, even if he is Goliath, he will keep on bullying.
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- cag_ii 12y ago
  > Being sued and defending yourself is enormously expensive... I think you answered your own question there.
  - mixmax 12y ago
    That's where the crowdsourcing comes in :-) I'm sure there are young lawyers that would like to give some of these cases a try. Surely there must be someone with a conscience in that line of business. I could also imagine that companies and individuals might want to donate.
miles 12y ago
Despite rarely buying from NewEgg (outside of the continental US shipping is a bear), I'm signing up for their Premier membership simply to support them in the fight against patent trolls. Their product photos and customer reviews have also offered a lot of value to me over the years.
- ElComradio 12y ago
  I think you've discovered the origin of NewEgg's stance: why order from Amazon when you can buy from Newegg _and_ fight patent trolls?
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onedev 12y ago
This is so beautiful, I am going to support the hell of out Newegg extra deliberately from now on (e.g. buying stuff even if it's more expensive, takes longer shipping). I absolutely love this. Lee Cheng, rock on!
sgdesign 12y ago
> Thanks to the efforts of Lee Cheng and his legal team, the Federal Circuit Court of Appeals ordered a trial court to reconsider its earlier denial of Newegg’s request for attorneys’ fees and costs in the patent infringement lawsuit brought on by SUS. Wait, so what did the trial court conclude? Are they making the troll pay or not? I feel like I'm missing something? Also, isn't it worrying that they had to appeal in the first place?
- jessaustin 12y ago
  IANAL: The trial court had found for Newegg on the infringement case, but had not taken the additional step of awarding attorney's fees to Newegg. The appeals court has now recommended that the trial court take that additional step. The appeals court doesn't have time to wade through reams of legal invoices. Actually the trial court may have been trying to avoid that as well, but now it has no choice. It's my impression that courts don't want to award attorney's fees to civil defendants very often, because that would discourage litigation. I think it's reserved for obviously "frivolous" cases. Therefore the need to appeal doesn't seem like a problem.
  - yxhuvud 12y ago
    Living in a country where the default is that the loser pays (within reason), I must wonder: Why is discouraging litigation a bad thing?
    - ngoede 12y ago
      The balance to this is that corporations and rich individuals already have far more money to spend on a legal defense that further discouragement makes it that less likely that regular individuals will be able to use the legal system to redress civil wrongs that those parties have done to them. I.E. the plot of the show Leverage.
    - mikeash 12y ago
      Litigation isn't inherently bad. It all depends on how it's used. You don't want a policy that makes life hard for patent trolls to also make it impossible for, say, a person who's horribly disfigured in a car crash from suing the company for a legitimate design defect that caused the crash.
ArtDev 12y ago
I am a longtime customer of Newegg. No where will you find product reviews written by such a dedicated base of geeks. Newegg customer service is also really really good. I buy virtually all of my hardware on Newegg, even if its a few dollars more. That said, I am an even more loyal customer after reading this article.
the_watcher 12y ago
I really wish NewEgg had shirts that looked better than the ones they sell.
- kordless 12y ago
  I wore my Rackspace patent troll t-shirt all day. I love Lousy!
- tunap 12y ago
  I get plenty of compliments on my "Geek On" shirt. Of course, something more subdued and pro would be nice...maybe even a collar? I've been down on their services the last few years, lots of headaches and noticeable lag in ship times... it feels like they had the IPO after all. Also, I don't appreciate having to take the extra step/refresh to exclude the 'Marketplace' from my searches every time... drop-ship crap has sullied their image, IMO. Anyway, I will recommence making them my 'go-to' e-tailer due to this action & for their years of providing (mostly) exhaustive product images, complete spec pages & informed reviews.
  - the_watcher 12y ago
    I meant the patent troll shirt. It's a shade of gray that makes it hard to see the image, and I'd like one more obvious about what it's about.
finkin1 12y ago
As the CEO of a small 5-person startup, getting sued by a patent troll scares the shit out of me. Seeing Newegg take it to these asshats puts a grin on my face. I'll be voting with my dollars by shopping at Newegg.
- tempestn 12y ago
  Not that I blame them for it at all, but I'm sure the potential for thisresponse isn't overlooked by Newegg when they decide to fight these suits. That said, good on them. Far better to spend money building their brand by fighting back against patent trolls than on run of the mill advertising. (And in the best case scenario, like this one, fighting might not even cost them at all.)
hkmurakami 12y ago
Personally, I love the fact that this title evokes the "Don't mess with Texas" line, given that it's the East Texas courts that aid patent trolls so greatly.
- digitalengineer 12y ago
  If it's mainly the Texas court, then why not go after that angle?
  - saryant 12y ago
    It's a federal court based in Texas, not a state court.
- dTal 12y ago
  That caught my eye. Surely that's evidence of corruption in itself, if a particular area's courts seem unusually biased in a particular direction?
shmerl 12y ago
That's one of the reasons I avoid Amazon and prefer to buy on Newegg.
rbanffy 12y ago
Is there a "Patent Troll Response Command" to coordinate the response of companies being sued and to facilitate the creation of groups to fight such lawsuits together?
- tim333 12y ago
  I was thinking that - or is there a site where you can post your troll letter and be put in touch with the other companies that have received the same one? Wouldn't be that hard to build. Does anyone know if there is one?
bsimpson 12y ago
> "those asshats" Lawyered.
takinola 12y ago
It seems to me that there is a good way for the industry as a whole to address the issue of patent trolls without waiting for legal reform by attacking the economics of the business. Trolls make money by simply 1. Amassing patent portfolios (the only real fixed costs for this business) 2. Sending infringement letters to victims (sorry, targets) 3. Walking to the bank to cash the checks of companies who cannot afford a legal battle. Once a troll goes to court, the economics of the business start to fall apart as the legal fees add up and eat into profits. Also, they risk invalidating their patents which jeopardize future revenue streams. It should be possible to create an alliance of companies (Apple, Google, Yahoo, Microsoft are obvious candidates) that have an interest in a strong ecosystem of innovation to put together a fund that makes legal defense grants available to anyone in the mobile/web space who can demonstrate they have a plausible defense case. The amount needed would not be large (less than $20 million a year should be sufficient to cover the entire industry) since just the fact that every kid on the playground now has the ability to face up to the bullies will reduce the bad behavior considerably.
joshjdr 12y ago
I agree with the principle presented here... but before we all hail Newegg, I'll explain why I have not conducted business with this company since 2009... Here is a letter I wrote Amex then, disputing a nasty transaction with this company. https://www.dropbox.com/s/8b8dg9diowqz48y/Amex%20Dispute%20Redacted.pdf https://www.dropbox.com/s/8b8dg9diowqz48y/Amex%20Dispute%20R... This is real, and I won.
- cryowaffle 12y ago
  Trust me, I am doing you a favor: Your redaction technique is very poor. Almost every redaction you used allows us to see the tops and bottoms of the letters which is enough to recreate all the hidden characters. Partial redaction is no redaction.
  - joshjdr 12y ago
    Was there anything beyond that which would enable reconstruction of the data? Just curious. I was only trying to share, and on a level which would enable the audience to know it was real. Thanks.
- neurobro 12y ago
  What's the point of redaction if you keep enough of the data intact to trivially reconstruct it?
  - joshjdr 12y ago
    I guess none. The information redacted was not really critical, I tried to remove personally identifying information while making the point... but I understand your point and appreciate the feedback. Thank you.
- joshjdr 12y ago
  Understood, and totally redacted now. Look, I was just trying to present some truth, at least my truth. I tried to anonymize, but I understand the audience here is pretty sophisticated.. If anyone wants to advise on how to share this better please advise. I'm not trying to hate, just share some facts. I was surprised the seemingly fanboy level reaction to Newegg here. I did a fair amount of business with them previously and their behavior in this case was truly objectionable. This isn't exactly a Snowden level revelation... I was just saying this company isn't exactly a bunch of angels... I now use Amazon for what I used to buy from Newegg. They cost a bit more for some things but are a stand up company and have always stood behind their sales. If something doesn't work they accept a return (which is commendable), and if something is delivered broken (which is what happened in this case) they don't give you a rash of sh*t.
us0r 12y ago
Acacia Research has been at this for a long time now. I remember when they went after porn. They claimed to own streaming media and thought the adult industry would settle. While some did, one company took them up and won. If I remember he said it cost them $500k to defend.
- jacquesm 12y ago
  It cost them quite a bit more than that but they won anyway. That did not stop acacia from extorting (or in some cases trying to) pick fights with smaller entities. They then started to withdraw their cases if it became apparent someone would actually fight back. (I know this because I supplied a whole bunch of information in that lawsuit and the defendants are customers of mine, Acacia also tried to sue TrueTech Canada Inc but dropped the case when they realized that (1) I wasn't going to budge and (2) the IP was all vested in the Dutch parent company, so the 'shell' effect worked to our advantage for a change. If they'd won in Canada we'd have declared bankruptcy, opened a new office two doors down the hall and continued business with a new daughter company. The Canadian subsidiary had little to no assets, just desks and a bunch of computers.).
ajju 12y ago
Well done Newegg. From now on, Anytime I buy electronics, i am going to check Newegg first.
danieltillett 12y ago
Does anyone know why these cases are so expensive to defend? They can't be that complex given the troll basically has nothing. Could you not just hire a junior lawyer out college for next to nothing and put them in charge of running all the defences?
- wtallis 12y ago
  They're expensive because the eastern Texas courts are so favorable to patent plaintiffs that in order to have a meaningful chance for a win you have to either get the USPTO to throw out the patent or get the case moved to a different court (as Newegg did here). The former is extremely time-consuming and expensive, and the latter is difficult and rarely successful. A direct fight against the subject and claims is all but doomed to lose in those eastern district Texas courts regardless of the content of the patent. And if you do find a way to win, you have nothing to retaliate against or recover fees from.
  - danieltillett 12y ago
    Why is it more expensive to run a case in East Texas with some junior lawyer than anywhere else?
    - sounds 12y ago
      Because you will lose, regardless of whether you hired a junior lawyer or the most expensive law firm in the world.
      - danieltillett 12y ago
        I don't think it is as simple as that as people do win in East Texas [0]. I found it interesting that the latest troll shopping location is Delaware. [0] http://arstechnica.com/tech-policy/2013/01/east-texas-courts-are-back-on-top-for-patent-lawsuits/ http://arstechnica.com/tech-policy/2013/01/east-texas-courts...
  - smcl 12y ago
TheMagicHorsey 12y ago
Lee is a hero. Most patent lawyers talk in very measured tones when it comes to patent trolls, because they don't want to foreclose the possibility of feeding at the money faucet themselves. Lee doesn't give a fuck. He straight up calls them thieves and asshats. Baller status.
- zo1 12y ago
  Agreed. The first step to fixing any vague/grey problem is calling it by its real name. If only we could hold our politicians to such a standard, patent reform wouldn't be an issue as it'd already be fixed.
sidcool 12y ago
Pretty bold move by Newegg.
mantis369 12y ago
Newegg are cheapskates. The publicity from doing this pays far more than the money they'd save by settling with patent trolls.
- jeorgun 12y ago
  The fact that they're being rewarded for their actions doesn't mean that those actions aren't laudable (especially when that reward consists of their being lauded).
  - wutbrodo 12y ago
    The HN community collectively hasn't ever been able to grasp this concept; apparently if a corporation has any possible benefit from an action, it MUST be the motivation behind the action. It's a particularly delightful cop-out because any positive action (including philanthropy) can be dismissed as a PR move.
    - aidenn0 12y ago
      I vaguely remember reading about some philosophy where there was no such thing as a selfless act, as you always get something out of it, even if it's just a warm fuzzy feeling inside. That's just one example of why I find most of philosophy to be a complete waste of time.
      - allanb 12y ago
        Relying on vague memories for such broad judgements. Seems like a sound philosophy to me ;)
      - bcohen5055 12y ago
        I think you are referring to economics...
    - mantis369 12y ago
      I grasp the concept perfectly well. But this is theater. Look at the title ("When Will Patent Trolls Learn Not to Mess with Newegg?") and the ridiculous picture of the lawyer!
galaxyLogic 12y ago
In respect to SW patents isn't the recently renewed US legislation more a problem than a solution. As I understood it, it is no longer who wrote a piece of code that exemplified an idea first, but who first filed for the patent for it?
galaxyLogic 12y ago
The big companies probably don't worry too much about the "trolls", and the current legislation reflects that. They have the legal and financial resources to defend themselves. The Trolls make life hazardous for smaller companies who might go bankrupt because of them. For big companies it's probably just good that smaller disrupting innovators get out of business sooner rather than later.
eklavya 12y ago
We need more of this.
DigitalSea 12y ago
We need patent reform now. "their patented technology related to the registration of websites on search engines" — this right here is conclusive proof the patent system in the US is broken. Lets fix this now. How many legal/government resources have been wasted because of trolls like SUS? Leave the judges to put real criminals away. Thank you for making a good example for the rest of us NewEgg. There are too many people that are unable to defend themselves in situations like these, it is great to know there are companies out there willing to fight (even if it takes years and hundreds of thousands of dollars to win).
Erwin 12y ago
Cheng did a "AMA" on reddit -- here are all the questions & answers in a convenient tabled form: http://www.reddit.com/r/tabled/comments/2693ur/table_iama_hi_i_am_lee_cheng_chief_troll_hunter/ http://www.reddit.com/r/tabled/comments/2693ur/table_iama_hi...
MrBuddyCasino 12y ago
This is an interview with Paul R. Ryan, former Forbes CEO and now the guy behind Acacia Research, the firm behind the Newegg patent law suit. Was surprised he is not as slimy as I expected: http://vimeo.com/57723958 http://vimeo.com/57723958
- Intermernet 12y ago
  If you're a slimy character, and you want to get to CEO the slime has to be inside, and invisible. These guys are very smart, and very manipulative. Think evil Derren Brown and you'll be close to the mark.
throwaway7767 12y ago
I really appreciate the NewEgg strategy in these cases. They're fighting the good fight. And it's a great move to make the most PR splash from their victories to discourage future trolls. If only they shipped outside the US, I would give them all my business. :)
joshstrange 12y ago
I wonder if someone has patented the idea of sue for patents that you never actually use... Would love to see patent trolls sued for trying to sue for patents they don't use.
- thyrsus 12y ago
  Yup: http://www.npr.org/blogs/money/2012/08/01/157743897/can-you-get-a-patent-on-being-a-patent-troll http://www.npr.org/blogs/money/2012/08/01/157743897/can-you-...
fusionefredda 12y ago
I hope for the patent trolls the same that happens to SCO
djb_hackernews 12y ago
> the defense managed to move the trial out of the Eastern District of Texas, a jurisdiction that is known for favoring plaintiffs in patent suits. They REALLY need to publish how they did that, because that'll help every other company battling patent trolls.
klunger 12y ago
I'm American, but have lived in Scandinavia for a couple years now. When I incorporated my bitty start-up last year, I could choose between incorporating here or in the US. Despite the higher tax burden, I ultimately decided to incorporate here. Why? There were a lot of reasons, but the two biggest ones were: 1) I didn't want to worry about patent trolls 2) I didn't want to worry about net neutrality effecting my first users (we are starting local)
- harryh 12y ago
  Are you sure that the biggest reason wasn't that you live in Scandinavia?
dctoedt 12y ago
The article is out of date -- in a good way -- on one point: It says that to recover attorneys' fees from a troll, the winning defendant must show that the troll acted in bad faith. The U.S. Supreme Court changed that rule last month, easing the burden of proof considerably, and giving trial judges far more latitude on that score. [1] [1] http://patentlyo.com/patent/2014/04/discretion-attorney-litigation.html http://patentlyo.com/patent/2014/04/discretion-attorney-liti..., by patent law professor Dennis Crouch.
khaki54 12y ago
apparently at newegg you can say asshat on the corporate blog. I like that
lazyant 12y ago
Great but singing victory too soon, Newegg haven't won any money yet
- pdpi 12y ago
  They don't need to. This isn't about the money, it's about the message they're sending.
- Goronmon 12y ago
  >Great but singing victory too soon, Newegg haven't won any money yet They even said that there endgame isn't even to win money in these situations. They are just happy if they can get the other side to spend their own resources/time/money more than they normally would want to litigating cases like this.
revmoo 12y ago
Hey Newegg, Why the hell do you continue to scam your customers on this item: http://www.newegg.com/Product/Product.aspx?Item=N82E16817182068&Tpk=17-182-068 http://www.newegg.com/Product/Product.aspx?Item=N82E16817182... It has been listed for over a month as having a 7-year warranty and despite my repeated phone calls you continue to scam your customers. I'm stuck reaching out on social media at this point to warn people about this shit.
superuser 12y ago
I'm a little surprised that patent trolls get such a bad rap on hacker news. I would argue that patent trolls exists to protect the small inventors. Without patent trolls, the big companies can easily infringe the small inventors' patents knowing full well that the little guys can't afford to go up against them in court. The patent trolls merely step in to enforce the rights of the small inventors. That is not to say that software patents are a good idea or should be allowed, and one could certainly make the case against them, but that's a separate issue.
- queensnake 12y ago
  No, the difference is in the added word troll, not simply a defender. Trolls are non-practicing, and produce nothing and protect nothing. I'm sure a legitimate 'little guy' with a patent would get all the sympathy he deserves here, unless perhaps, as you mention, it's a software patent.
  - superuser 12y ago
    I think you're missing the point. You can't distinguish between the patent troll and the little guy inventor because their rights are one and the same. A patent troll purchases the right to enforce a patent from an inventor who would otherwise not have the resources to enforce it himself. It is that right, the right granted to the inventor, that is being enforced. Without the patent troll the inventor's rights would get trampled by the large corporations. Hence, the patent troll is defending the small inventor's rights. The fact that the patent troll is not practicing the invention matters not. There is no requirement that a patent holder practice the patent in order to enforce it. I can assure you the big corporations do not practice all patents they hold and enforce, many just get licensed out - and there's nothing wrong with that. But there also shouldn't be anything wrong with the small inventor doing the same thing, except for him it often requires the help of a patent troll. The patent troll is just doing for the inventor what the big corporations do for themselves, thus leveling the playing field.
Shorel 12y ago
If only they would sell stuff to me (I'm not in the USA).
tyang 12y ago
As a lawyer, I approve this message.

1469 points by keerthiko 12y ago

Right now was a good time for me to learn that Newegg takes a principled stand against patent trolls because I've been thinking of starting to buy from Newegg because I keep on hearing bad things about how Amazon treats its employees.

thedaveoflife 12y ago

The lesson from this article: PR can be an effective legal deterrent. Publicize your victories.

tdicola 12y ago

Wow I love that they're taking a stand, and got quite a laugh out of the image. Definitely makes me want to support Newegg as a customer much more in the future.

jerrytsai 12y ago
+1
- saturdayplace 12y ago
  Instead of posting a comment like this, it's generally better just to upvote the comment you're agreeing with. The mods are trying to optimize the signal:noise, and there's not much signal in a two-character comment.
  - Chronic26 12y ago
    Downvote Look at how funny I am.
theandrewbailey 12y ago
I'm proud to be a Newegg customer because they call me their customer, not their consumer.

heyheyhey 12y ago

> Most companies choose not to recover their legal fees in patent suits because prevailing defendants are required to demonstrate that a plaintiff acted in bad faith. This is extremely difficult to prove and it’s usually easier to just walk away and count your losses – unless your name is Lee Cheng. Interesting. So if you're a patent troll, there is little to no downside to constantly suing companies aside from the legal fees?

jameskilton 12y ago
Exactly. This is the main reason why patent trolling even exists today, because the troll companies never really lose. This is also the primary aspect of patent troll legislation (punish companies harshly that file frivolous claims) with HUGE bipartisan support, that has just been shelved. http://www.nytimes.com/2014/05/22/business/legislation-to-protect-against-patent-trolls-is-shelved.html http://www.nytimes.com/2014/05/22/business/legislation-to-pr...
jliptzin 12y ago
Legal fees? I would assume they have a team of full-time attorneys on payroll. Since their legal fees are fixed, they're incentivized to use that team as much as possible.
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swang 12y ago

NewEgg and Nintendo seem to be the only companies willing to actively fight patent trolls. Anyone else?

tdicola 12y ago
Adam Carolla is pooling funds to battle a patent troll that is suing him for podcasting: http://fundanything.com/patenttroll?locale=en http://fundanything.com/patenttroll?locale=en
harmegido 12y ago
I'm not down with Nintendo - their games are region-locked.
shawnreilly 12y ago
Rackspace is another company that stands up to fight Patent Trolls. And they run OpenStack. (Double the Awesome)

zinxq 12y ago

Whenever I can, I buy from Newegg for this reason.

slaven 12y ago

I feel it's really important for us, as consumers, to support companies like Newegg. This strategy is really risky for them (despite all the good PR it brings). It's easy for patent trolls to just move onto different targets and avoid suing combative companies like Newegg, but if we vote with our dollars maybe more companies will see that they too should take a stand.

suprgeek 12y ago

Awesome Principled Stand by Newegg! This is one of the reasons to support buying from them. However this only underscores how easy it is to sue over flimsy patents and how expensive and time-consuming it is to go after and shut down these horrible trolls. Add to this the fact that Patent reform was killed in the Senate by Pat Leahy & Harry Reid (Both of whom are notorious supporters of trial lawyers & pharma) and it is a net loss for the tech industry this week

mst 12y ago
What fascinates me is how easy it is to fight if you practice. Lee Cheng is impressive, but I suspect his secret weapon is actually having fought a bunch of such cases knowing he has a 'fuck them, they are going to lose' mandate. An enemy who's very practiced at -not- settling is probably not something his opponents know how to deal with.
- calbear81 12y ago
  Newegg has always been against paying out even way back in the day when I worked there. In the early days of patent trolling, someone sued us in a printer-related lawsuit and they offered to settle for a small sum (VERY small). Basically, the in-house lawyer said that it would cost more money to fight it given his hourly wage but that the CEO was not going to pay if it was a frivolous lawsuit. I see that the same principle has persisted now, a decade later.
  - mikeash 12y ago
    It's strange that more companies don't see the long term problems created by signaling that you're willing to spend money to settle frivolous lawsuits. Another symptom of the corporate world's excessive focus on the short term?
    - tmerr 12y ago
      Not all companies have as much power as Newegg to fight back. I'm guessing it does often make financial sense to just pay it, otherwise companies would have turned the tables already. I don't think it's a lack of long term thinking as much as it is a tragedy of the commons related situation.

arjn 12y ago

Newegg is my hero!

mixmax 12y ago

It seems to me that the legal system in the US is largely broken, and that just about anyone can be sued if only you find the right grounds. Being sued and defending yourself is enormously expensive which is what patent trolls exploit. Why not use this offensively against patent trolls? Find all sorts of ways to take them to court, the American legal seems to have plenty of opportunities in that regard. There are some problems with standing, but I'm sure that a concerted effort could be effective. Sue them into the ground with guns blazing. Sue them for everything from not upholding workers rights, to misleading advertising and spelling mistakes. Make them taste their own medicine. The effort could be crowdsourced.

jamra 12y ago
The law firms that back up patent trolls are very large and very powerful. The largest and most powerful in the nation.
- mixmax 12y ago
  This is why extortion works - if your enemy is more powerful than you chances are you will subdue. The mafia figured this out centuries ago. If you don't stand up to a bully, even if he is Goliath, he will keep on bullying.
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cag_ii 12y ago
> Being sued and defending yourself is enormously expensive... I think you answered your own question there.
- mixmax 12y ago
  That's where the crowdsourcing comes in :-) I'm sure there are young lawyers that would like to give some of these cases a try. Surely there must be someone with a conscience in that line of business. I could also imagine that companies and individuals might want to donate.

miles 12y ago

Despite rarely buying from NewEgg (outside of the continental US shipping is a bear), I'm signing up for their Premier membership simply to support them in the fight against patent trolls. Their product photos and customer reviews have also offered a lot of value to me over the years.

ElComradio 12y ago
I think you've discovered the origin of NewEgg's stance: why order from Amazon when you can buy from Newegg _and_ fight patent trolls?

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onedev 12y ago

This is so beautiful, I am going to support the hell of out Newegg extra deliberately from now on (e.g. buying stuff even if it's more expensive, takes longer shipping). I absolutely love this. Lee Cheng, rock on!

sgdesign 12y ago

> Thanks to the efforts of Lee Cheng and his legal team, the Federal Circuit Court of Appeals ordered a trial court to reconsider its earlier denial of Newegg’s request for attorneys’ fees and costs in the patent infringement lawsuit brought on by SUS. Wait, so what did the trial court conclude? Are they making the troll pay or not? I feel like I'm missing something? Also, isn't it worrying that they had to appeal in the first place?

jessaustin 12y ago
IANAL: The trial court had found for Newegg on the infringement case, but had not taken the additional step of awarding attorney's fees to Newegg. The appeals court has now recommended that the trial court take that additional step. The appeals court doesn't have time to wade through reams of legal invoices. Actually the trial court may have been trying to avoid that as well, but now it has no choice. It's my impression that courts don't want to award attorney's fees to civil defendants very often, because that would discourage litigation. I think it's reserved for obviously "frivolous" cases. Therefore the need to appeal doesn't seem like a problem.
- yxhuvud 12y ago
  Living in a country where the default is that the loser pays (within reason), I must wonder: Why is discouraging litigation a bad thing?
  - ngoede 12y ago
    The balance to this is that corporations and rich individuals already have far more money to spend on a legal defense that further discouragement makes it that less likely that regular individuals will be able to use the legal system to redress civil wrongs that those parties have done to them. I.E. the plot of the show Leverage.
  - mikeash 12y ago
    Litigation isn't inherently bad. It all depends on how it's used. You don't want a policy that makes life hard for patent trolls to also make it impossible for, say, a person who's horribly disfigured in a car crash from suing the company for a legitimate design defect that caused the crash.

ArtDev 12y ago

I am a longtime customer of Newegg. No where will you find product reviews written by such a dedicated base of geeks. Newegg customer service is also really really good. I buy virtually all of my hardware on Newegg, even if its a few dollars more. That said, I am an even more loyal customer after reading this article.

the_watcher 12y ago

I really wish NewEgg had shirts that looked better than the ones they sell.

kordless 12y ago
I wore my Rackspace patent troll t-shirt all day. I love Lousy!
tunap 12y ago
I get plenty of compliments on my "Geek On" shirt. Of course, something more subdued and pro would be nice...maybe even a collar? I've been down on their services the last few years, lots of headaches and noticeable lag in ship times... it feels like they had the IPO after all. Also, I don't appreciate having to take the extra step/refresh to exclude the 'Marketplace' from my searches every time... drop-ship crap has sullied their image, IMO. Anyway, I will recommence making them my 'go-to' e-tailer due to this action & for their years of providing (mostly) exhaustive product images, complete spec pages & informed reviews.
- the_watcher 12y ago
  I meant the patent troll shirt. It's a shade of gray that makes it hard to see the image, and I'd like one more obvious about what it's about.

finkin1 12y ago

As the CEO of a small 5-person startup, getting sued by a patent troll scares the shit out of me. Seeing Newegg take it to these asshats puts a grin on my face. I'll be voting with my dollars by shopping at Newegg.

tempestn 12y ago
Not that I blame them for it at all, but I'm sure the potential for thisresponse isn't overlooked by Newegg when they decide to fight these suits. That said, good on them. Far better to spend money building their brand by fighting back against patent trolls than on run of the mill advertising. (And in the best case scenario, like this one, fighting might not even cost them at all.)

hkmurakami 12y ago

Personally, I love the fact that this title evokes the "Don't mess with Texas" line, given that it's the East Texas courts that aid patent trolls so greatly.

digitalengineer 12y ago
If it's mainly the Texas court, then why not go after that angle?
- saryant 12y ago
  It's a federal court based in Texas, not a state court.
dTal 12y ago
That caught my eye. Surely that's evidence of corruption in itself, if a particular area's courts seem unusually biased in a particular direction?

shmerl 12y ago

That's one of the reasons I avoid Amazon and prefer to buy on Newegg.

rbanffy 12y ago

Is there a "Patent Troll Response Command" to coordinate the response of companies being sued and to facilitate the creation of groups to fight such lawsuits together?

tim333 12y ago
I was thinking that - or is there a site where you can post your troll letter and be put in touch with the other companies that have received the same one? Wouldn't be that hard to build. Does anyone know if there is one?

bsimpson 12y ago

> "those asshats" Lawyered.

takinola 12y ago

It seems to me that there is a good way for the industry as a whole to address the issue of patent trolls without waiting for legal reform by attacking the economics of the business. Trolls make money by simply 1. Amassing patent portfolios (the only real fixed costs for this business) 2. Sending infringement letters to victims (sorry, targets) 3. Walking to the bank to cash the checks of companies who cannot afford a legal battle. Once a troll goes to court, the economics of the business start to fall apart as the legal fees add up and eat into profits. Also, they risk invalidating their patents which jeopardize future revenue streams. It should be possible to create an alliance of companies (Apple, Google, Yahoo, Microsoft are obvious candidates) that have an interest in a strong ecosystem of innovation to put together a fund that makes legal defense grants available to anyone in the mobile/web space who can demonstrate they have a plausible defense case. The amount needed would not be large (less than $20 million a year should be sufficient to cover the entire industry) since just the fact that every kid on the playground now has the ability to face up to the bullies will reduce the bad behavior considerably.

joshjdr 12y ago

I agree with the principle presented here... but before we all hail Newegg, I'll explain why I have not conducted business with this company since 2009... Here is a letter I wrote Amex then, disputing a nasty transaction with this company. https://www.dropbox.com/s/8b8dg9diowqz48y/Amex%20Dispute%20Redacted.pdf https://www.dropbox.com/s/8b8dg9diowqz48y/Amex%20Dispute%20R... This is real, and I won.

cryowaffle 12y ago
Trust me, I am doing you a favor: Your redaction technique is very poor. Almost every redaction you used allows us to see the tops and bottoms of the letters which is enough to recreate all the hidden characters. Partial redaction is no redaction.
- joshjdr 12y ago
  Was there anything beyond that which would enable reconstruction of the data? Just curious. I was only trying to share, and on a level which would enable the audience to know it was real. Thanks.
neurobro 12y ago
What's the point of redaction if you keep enough of the data intact to trivially reconstruct it?
- joshjdr 12y ago
  I guess none. The information redacted was not really critical, I tried to remove personally identifying information while making the point... but I understand your point and appreciate the feedback. Thank you.
joshjdr 12y ago
Understood, and totally redacted now. Look, I was just trying to present some truth, at least my truth. I tried to anonymize, but I understand the audience here is pretty sophisticated.. If anyone wants to advise on how to share this better please advise. I'm not trying to hate, just share some facts. I was surprised the seemingly fanboy level reaction to Newegg here. I did a fair amount of business with them previously and their behavior in this case was truly objectionable. This isn't exactly a Snowden level revelation... I was just saying this company isn't exactly a bunch of angels... I now use Amazon for what I used to buy from Newegg. They cost a bit more for some things but are a stand up company and have always stood behind their sales. If something doesn't work they accept a return (which is commendable), and if something is delivered broken (which is what happened in this case) they don't give you a rash of sh*t.

us0r 12y ago

Acacia Research has been at this for a long time now. I remember when they went after porn. They claimed to own streaming media and thought the adult industry would settle. While some did, one company took them up and won. If I remember he said it cost them $500k to defend.

jacquesm 12y ago
It cost them quite a bit more than that but they won anyway. That did not stop acacia from extorting (or in some cases trying to) pick fights with smaller entities. They then started to withdraw their cases if it became apparent someone would actually fight back. (I know this because I supplied a whole bunch of information in that lawsuit and the defendants are customers of mine, Acacia also tried to sue TrueTech Canada Inc but dropped the case when they realized that (1) I wasn't going to budge and (2) the IP was all vested in the Dutch parent company, so the 'shell' effect worked to our advantage for a change. If they'd won in Canada we'd have declared bankruptcy, opened a new office two doors down the hall and continued business with a new daughter company. The Canadian subsidiary had little to no assets, just desks and a bunch of computers.).

ajju 12y ago

Well done Newegg. From now on, Anytime I buy electronics, i am going to check Newegg first.

danieltillett 12y ago

Does anyone know why these cases are so expensive to defend? They can't be that complex given the troll basically has nothing. Could you not just hire a junior lawyer out college for next to nothing and put them in charge of running all the defences?

wtallis 12y ago
They're expensive because the eastern Texas courts are so favorable to patent plaintiffs that in order to have a meaningful chance for a win you have to either get the USPTO to throw out the patent or get the case moved to a different court (as Newegg did here). The former is extremely time-consuming and expensive, and the latter is difficult and rarely successful. A direct fight against the subject and claims is all but doomed to lose in those eastern district Texas courts regardless of the content of the patent. And if you do find a way to win, you have nothing to retaliate against or recover fees from.
- danieltillett 12y ago
  Why is it more expensive to run a case in East Texas with some junior lawyer than anywhere else?
  - sounds 12y ago
    Because you will lose, regardless of whether you hired a junior lawyer or the most expensive law firm in the world.
    - danieltillett 12y ago
      I don't think it is as simple as that as people do win in East Texas [0]. I found it interesting that the latest troll shopping location is Delaware. [0] http://arstechnica.com/tech-policy/2013/01/east-texas-courts-are-back-on-top-for-patent-lawsuits/ http://arstechnica.com/tech-policy/2013/01/east-texas-courts...
- smcl 12y ago

TheMagicHorsey 12y ago

Lee is a hero. Most patent lawyers talk in very measured tones when it comes to patent trolls, because they don't want to foreclose the possibility of feeding at the money faucet themselves. Lee doesn't give a fuck. He straight up calls them thieves and asshats. Baller status.

zo1 12y ago
Agreed. The first step to fixing any vague/grey problem is calling it by its real name. If only we could hold our politicians to such a standard, patent reform wouldn't be an issue as it'd already be fixed.

sidcool 12y ago

Pretty bold move by Newegg.

mantis369 12y ago

Newegg are cheapskates. The publicity from doing this pays far more than the money they'd save by settling with patent trolls.

jeorgun 12y ago
The fact that they're being rewarded for their actions doesn't mean that those actions aren't laudable (especially when that reward consists of their being lauded).
- wutbrodo 12y ago
  The HN community collectively hasn't ever been able to grasp this concept; apparently if a corporation has any possible benefit from an action, it MUST be the motivation behind the action. It's a particularly delightful cop-out because any positive action (including philanthropy) can be dismissed as a PR move.
  - aidenn0 12y ago
    I vaguely remember reading about some philosophy where there was no such thing as a selfless act, as you always get something out of it, even if it's just a warm fuzzy feeling inside. That's just one example of why I find most of philosophy to be a complete waste of time.
    - allanb 12y ago
      Relying on vague memories for such broad judgements. Seems like a sound philosophy to me ;)
    - bcohen5055 12y ago
      I think you are referring to economics...
  - mantis369 12y ago
    I grasp the concept perfectly well. But this is theater. Look at the title ("When Will Patent Trolls Learn Not to Mess with Newegg?") and the ridiculous picture of the lawyer!

galaxyLogic 12y ago

In respect to SW patents isn't the recently renewed US legislation more a problem than a solution. As I understood it, it is no longer who wrote a piece of code that exemplified an idea first, but who first filed for the patent for it?

galaxyLogic 12y ago

The big companies probably don't worry too much about the "trolls", and the current legislation reflects that. They have the legal and financial resources to defend themselves. The Trolls make life hazardous for smaller companies who might go bankrupt because of them. For big companies it's probably just good that smaller disrupting innovators get out of business sooner rather than later.

eklavya 12y ago

We need more of this.

DigitalSea 12y ago

We need patent reform now. "their patented technology related to the registration of websites on search engines" — this right here is conclusive proof the patent system in the US is broken. Lets fix this now. How many legal/government resources have been wasted because of trolls like SUS? Leave the judges to put real criminals away. Thank you for making a good example for the rest of us NewEgg. There are too many people that are unable to defend themselves in situations like these, it is great to know there are companies out there willing to fight (even if it takes years and hundreds of thousands of dollars to win).

Erwin 12y ago

Cheng did a "AMA" on reddit -- here are all the questions & answers in a convenient tabled form: http://www.reddit.com/r/tabled/comments/2693ur/table_iama_hi_i_am_lee_cheng_chief_troll_hunter/ http://www.reddit.com/r/tabled/comments/2693ur/table_iama_hi...

MrBuddyCasino 12y ago

This is an interview with Paul R. Ryan, former Forbes CEO and now the guy behind Acacia Research, the firm behind the Newegg patent law suit. Was surprised he is not as slimy as I expected: http://vimeo.com/57723958 http://vimeo.com/57723958

Intermernet 12y ago
If you're a slimy character, and you want to get to CEO the slime has to be inside, and invisible. These guys are very smart, and very manipulative. Think evil Derren Brown and you'll be close to the mark.

throwaway7767 12y ago

I really appreciate the NewEgg strategy in these cases. They're fighting the good fight. And it's a great move to make the most PR splash from their victories to discourage future trolls. If only they shipped outside the US, I would give them all my business. :)

joshstrange 12y ago

I wonder if someone has patented the idea of sue for patents that you never actually use... Would love to see patent trolls sued for trying to sue for patents they don't use.

thyrsus 12y ago
Yup: http://www.npr.org/blogs/money/2012/08/01/157743897/can-you-get-a-patent-on-being-a-patent-troll http://www.npr.org/blogs/money/2012/08/01/157743897/can-you-...

fusionefredda 12y ago

I hope for the patent trolls the same that happens to SCO

djb_hackernews 12y ago

> the defense managed to move the trial out of the Eastern District of Texas, a jurisdiction that is known for favoring plaintiffs in patent suits. They REALLY need to publish how they did that, because that'll help every other company battling patent trolls.

klunger 12y ago

I'm American, but have lived in Scandinavia for a couple years now. When I incorporated my bitty start-up last year, I could choose between incorporating here or in the US. Despite the higher tax burden, I ultimately decided to incorporate here. Why? There were a lot of reasons, but the two biggest ones were: 1) I didn't want to worry about patent trolls 2) I didn't want to worry about net neutrality effecting my first users (we are starting local)

harryh 12y ago
Are you sure that the biggest reason wasn't that you live in Scandinavia?

dctoedt 12y ago

The article is out of date -- in a good way -- on one point: It says that to recover attorneys' fees from a troll, the winning defendant must show that the troll acted in bad faith. The U.S. Supreme Court changed that rule last month, easing the burden of proof considerably, and giving trial judges far more latitude on that score. [1] [1] http://patentlyo.com/patent/2014/04/discretion-attorney-litigation.html http://patentlyo.com/patent/2014/04/discretion-attorney-liti..., by patent law professor Dennis Crouch.

khaki54 12y ago

apparently at newegg you can say asshat on the corporate blog. I like that

lazyant 12y ago

Great but singing victory too soon, Newegg haven't won any money yet

pdpi 12y ago
They don't need to. This isn't about the money, it's about the message they're sending.
Goronmon 12y ago
>Great but singing victory too soon, Newegg haven't won any money yet They even said that there endgame isn't even to win money in these situations. They are just happy if they can get the other side to spend their own resources/time/money more than they normally would want to litigating cases like this.

revmoo 12y ago

Hey Newegg, Why the hell do you continue to scam your customers on this item: http://www.newegg.com/Product/Product.aspx?Item=N82E16817182068&Tpk=17-182-068 http://www.newegg.com/Product/Product.aspx?Item=N82E16817182... It has been listed for over a month as having a 7-year warranty and despite my repeated phone calls you continue to scam your customers. I'm stuck reaching out on social media at this point to warn people about this shit.

superuser 12y ago

I'm a little surprised that patent trolls get such a bad rap on hacker news. I would argue that patent trolls exists to protect the small inventors. Without patent trolls, the big companies can easily infringe the small inventors' patents knowing full well that the little guys can't afford to go up against them in court. The patent trolls merely step in to enforce the rights of the small inventors. That is not to say that software patents are a good idea or should be allowed, and one could certainly make the case against them, but that's a separate issue.

queensnake 12y ago
No, the difference is in the added word troll, not simply a defender. Trolls are non-practicing, and produce nothing and protect nothing. I'm sure a legitimate 'little guy' with a patent would get all the sympathy he deserves here, unless perhaps, as you mention, it's a software patent.
- superuser 12y ago
  I think you're missing the point. You can't distinguish between the patent troll and the little guy inventor because their rights are one and the same. A patent troll purchases the right to enforce a patent from an inventor who would otherwise not have the resources to enforce it himself. It is that right, the right granted to the inventor, that is being enforced. Without the patent troll the inventor's rights would get trampled by the large corporations. Hence, the patent troll is defending the small inventor's rights. The fact that the patent troll is not practicing the invention matters not. There is no requirement that a patent holder practice the patent in order to enforce it. I can assure you the big corporations do not practice all patents they hold and enforce, many just get licensed out - and there's nothing wrong with that. But there also shouldn't be anything wrong with the small inventor doing the same thing, except for him it often requires the help of a patent troll. The patent troll is just doing for the inventor what the big corporations do for themselves, thus leveling the playing field.

Shorel 12y ago

If only they would sell stuff to me (I'm not in the USA).

tyang 12y ago

As a lawyer, I approve this message.