9 ms·

I really appreciate Newegg's approach here -- one of the main reasons that patent trolling is so successful is that the cost of settling is smaller even than th

by mcherm 11y ago

I really appreciate Newegg's approach here -- one of the main reasons that patent trolling is so successful is that the cost of settling is smaller even than the cost of winning a suit. Newegg is performing an (expensive) community service. How should I be supporting them (other than making them my "first place to check" for electronics shopping)?

ChrisGranger 11y ago
Word of mouth advertising is one way to help. Tell your friends that it should be their "first place to check" as well.
throwawaykf05 11y ago
> one of the main reasons that patent trolling is so successful is that the cost of settling is smaller even than the cost of winning a suit. Is the underlying reason for this strategy the low costs of settlement, or the extremely high costs of lawsuits? What if the value of a patent really is only a few thousand dollars? Note that this very tactic is used by big companies to avoid licensing valid and useful patents owned by smaller entities. Licensing discussions often begin with the potential licensor saying "sue me", or these days, outright suing you first with a Declaratory Judgement. Can an individual afford to take on a large company? Trolls appear to simply be a symptom of this disparity in the market.
- Lawtonfogle 11y ago
  The legal system is not equally available to all entities. That it is the center of how we enforce our rights and hold others to their duties is a major problem. Even if we could fix it in the case of patents, we still have major issues within other civil and criminal courts. I do not know the solution or even have any half baked ideas on it, but I do think the first step to any solution is for us, as a society, to realize that the legal system is largely pay to win and not a justice system.
  - tachion 11y ago
    There are other countries, where this issue is solved (more or less) by the fact that the side which have lost the case is covering trial costs. This does stop 'court trolling' because even is the cost of winning the case is higher than the cost of the settlement, winning the case nullifies that cost. But hey, US is special this way! (and many others... ;)
    - adebtlawyer 11y ago
      Having litigated against adversaries who use the courts primarily to be a nuisance, with little or no regard to the actual strength or weakness of their claims, I've become convinced "loser pays costs and attorney's fees of prevailing party" is a better system than what we have in the U.S.
      - tachion 11y ago
        This is not the only difference between the justice systems in US and EU (EU is what I consider to be elswhere): in US the case is the battle between boths sides lawyer, and the judge is simply a watching function, that a the end calls the sentence, based on the outcome of that battle. In EU, the case is a so called 'process of finding material truth' and the judge can take active stance, call witnesses, ask additional questions, call for professional opinions and so on - it is no longer a battle of who has better lawyers but a way to find what's the actual state of things.
        adebtlawyer 11y ago
        The US system is also supposed to be a process of truth-finding, just that we leave the parties to support their own positions as adversaries. Without advocacy, American courts do very little on their own. So far that doesn't bother me, but I'm a lawyer. For someone thrown into the system, there can be an incorrect expectation that the court will automatically act to do justice.
        eigenvector 11y ago
- ikeboy 11y ago
  If you know you have a valid case (you aren't a troll), how hard would it be in practice to find someone to front the money for a lawsuit? Or for that matter, could you go to the competition and sell your patent? That is, say Apple's infringing on my patent; will Samsung buy the patent from me for a fair price and then sue Apple?
  - stonemetal 11y ago
    to find someone to front the money for a lawsuit? That is one of the problems, he who fronts the money expects to get the reward. Hence class actions where the lawyer who works on contingency gets millions and those wronged get a nickle.
    - ikeboy 11y ago
      Of course, but 1. You'll still get a significant sum if the total is significant (and if the case is open-and-shut, the risk wouldn't be too high for an investor, so you could get a favorable deal) 2. The infringing company would have to pay in full, which discourages them from doing it in the first place. I guess I really want to know is if this actually happens in practice, or if there are reasons I'm not thinking of that stop it from happening.
  - startupfounder 11y ago
    > how hard would it be in practice to find someone to front the money for a lawsuit? What about paying into an troll insurance policy every month so that if a troll wanted to sue you they would see that you were protected and would fight the lawsuit with a giant pile of money. This might deter the troll from suing in the first place.
    - detroitcoder 11y ago
      That is essentially what RPX Corporation provides
    - rollback 11y ago
      There is a whole ecosystem that is funding these lawsuits. It also operates somewhat anonymously, with funding sources working directly with law firms and indirectly with inventors (if they are even involved anymore). I've seen emails between law firms and the inventor that literally title the investors as "the funding source." The original inventor need not put any money at risk, and the law firms and funding sources do their own diligence to decide if it's worth proceeding to file suits. In most cases, the entity filing suit is created for each series of attacks so that if they actually lose a suit and are supposed to pay out, there are no assets from which to pay. Therefore, low risk and potentially very high reward. The biggest factor for that is not the validity of the patents, but the breadth and ability of the patents to be filed against "juicy" targets with a lot of cash. The cost of filing a suit is literally in the hundreds of dollars (I think ~$750) and most of these cases get settled out fairly early because of the immense cost of the defendants to complete the discovery process.
- brlewis 11y ago
  I'm a software engineer. Consequently I have to admit ignorance about this concept of a valid and useful patent. All I ever see is patents that hinder the Progress of Science and useful Arts. Are there really enough valid and useful patents that we should hesitate in our fight against the rest?
  - jebblue 11y ago
    I'm confused, are you asking if you should be fighting patent trolls or patents? If trolls, then fighting them is better than not. Patents are tools, valid and legal, you don't fight tools, you use them, improve them, complain about them, etc.
    - brlewis 11y ago
      I'm talking about patents. Patents are tools in the same sense that landmines are.
      - sosborn 11y ago
        Why choose the word landmine? What's wrong with, say, a hammer?
        brlewis 11y ago
        Hammers aren't used to exclude people from a path they might otherwise blissfully follow.
        sosborn 11y ago
        I guess I disagree with the idea that patents are inherently bad. Like hammers they can be used to build or to destroy.
        ycombobreaker 11y ago
        You simply aren't using enough hammers! Though seriously, I think the term landmine is loaded toward using patents exclusively as a troll. A wider analogy could be like a toll bridge, where the builder should be compensated by travelers. Some tolls could be usurious, but that wouldn't invalidate the whole principle.
- blazespin 11y ago
  Fixed it for you: Note that this very tactic is used by big companies to avoid licensing valid and useful patents owned by smaller NON PRACTICING entities. Yes, big companies have a better track record against trolls. And yes, this unfair. But that doesn't mean trolls are OK.
- LordKano 11y ago
  Is the underlying reason for this strategy the low costs of settlement, or the extremely high costs of lawsuits? Lawyers are expensive. Good lawyers are extremely expensive. There are also experts, investigators and consultants to hire. Everything about the process is expensive. It's very good that newegg is doing this because it helps everyone.
88e282102ae2e5b 11y ago
Really though, their approach is to be known as the company that won't settle and isn't worth suing. Eventually, patent trolls will just avoid them.
- JustSomeNobody 11y ago
  I don't know about that. I've read plenty of articles on Ars about how incompetent the lawyers for the trolls are.
  - throwawaykf05 11y ago
    Ars has a strong anti-patent bias and they are not afraid of twisting facts to fit the narrative. Note how they made the troll lawyers look stupid in their coverage of the TQP/Newegg trial, but TQP prevailed in that one. Newegg recently got off on non-infringement, but that was because Newegg lawyers were incompetent in not bring up that defense the first time. Their bias got so bad that even their typically anti-patent commenters called it out on one of their recent articles.
- akshatpradhan 11y ago
  This is actually a very important observation. The entire modus operandi of patent trolls is to go after the weak. Let's not kid ourselves when suggesting incompetent lawyers can't gain competence.
  - throwawaykf05 11y ago
    > The entire modus operandi of patent trolls is to go after the weak. This is not true. Giants like Apple, Google and Microsoft get sued all the time. They face hundreds of troll lawsuits at any given time.
    - akshatpradhan 11y ago
      Citation for hundreds of troll lawsuits? I'm only seeing one or two incidents when I google up Microsoft Patent Troll or Google Patent Troll.
zeidrich 11y ago
I don't know if I agree. The thing is, what Newegg is doing, especially by publicizing it is to tell trolls to avoid Newegg. That's great for Newegg, but it means that future trolls will skip them, and just go after the startups and small businesses that don't have the resources to fight a lawsuit on principal. I'm not saying that what Newegg is doing is bad, or even that it doesn't help. I'm just saying that the publicity that they are seeking for it might end up working out well for them by getting people to stop suing THEM, but won't work well to get people to stop suing other, smaller businesses. If a patent troll were to sue you for something you've implemented, and you knew that Newegg implemented it too, you'd have a difficult time getting Newegg to fund your defense I think. Unless the troll sues Newegg, nobody's going to help you out. If the trolls just avoid Newegg, they can still get their payout.
- mcv 11y ago
  What we need is a big party willing to defend all the small parties. How about some sort of patent troll insurance that takes over your defense and sues to invalidate the patent? The insurance should cost a smaller amount of money than settlement would cost. The more companies have that insurance, the bigger the defense you can mount, and the lower the costs for everybody are. The first person sued by the troll immediately takes it to court and wins, invalidating the patent, and ensuring that only one lawsuit will have to be fought and everybody else is safe. Of course this could mean that a lot of people feel they don't need the insurance because someone else will invalidate the patent for them, but if the list of people and companies protected by this insurance is public, those without it will be the first to be sued. So eventually, everybody will want this insurance, and the trolls will be forced to take it to court every time. There's got to be a business model in this.

by mcherm 11y ago

ChrisGranger 11y ago

Word of mouth advertising is one way to help. Tell your friends that it should be their "first place to check" as well.

throwawaykf05 11y ago

> one of the main reasons that patent trolling is so successful is that the cost of settling is smaller even than the cost of winning a suit. Is the underlying reason for this strategy the low costs of settlement, or the extremely high costs of lawsuits? What if the value of a patent really is only a few thousand dollars? Note that this very tactic is used by big companies to avoid licensing valid and useful patents owned by smaller entities. Licensing discussions often begin with the potential licensor saying "sue me", or these days, outright suing you first with a Declaratory Judgement. Can an individual afford to take on a large company? Trolls appear to simply be a symptom of this disparity in the market.

Lawtonfogle 11y ago
The legal system is not equally available to all entities. That it is the center of how we enforce our rights and hold others to their duties is a major problem. Even if we could fix it in the case of patents, we still have major issues within other civil and criminal courts. I do not know the solution or even have any half baked ideas on it, but I do think the first step to any solution is for us, as a society, to realize that the legal system is largely pay to win and not a justice system.
- tachion 11y ago
  There are other countries, where this issue is solved (more or less) by the fact that the side which have lost the case is covering trial costs. This does stop 'court trolling' because even is the cost of winning the case is higher than the cost of the settlement, winning the case nullifies that cost. But hey, US is special this way! (and many others... ;)
  - adebtlawyer 11y ago
    Having litigated against adversaries who use the courts primarily to be a nuisance, with little or no regard to the actual strength or weakness of their claims, I've become convinced "loser pays costs and attorney's fees of prevailing party" is a better system than what we have in the U.S.
    - tachion 11y ago
      This is not the only difference between the justice systems in US and EU (EU is what I consider to be elswhere): in US the case is the battle between boths sides lawyer, and the judge is simply a watching function, that a the end calls the sentence, based on the outcome of that battle. In EU, the case is a so called 'process of finding material truth' and the judge can take active stance, call witnesses, ask additional questions, call for professional opinions and so on - it is no longer a battle of who has better lawyers but a way to find what's the actual state of things.
      - adebtlawyer 11y ago
        The US system is also supposed to be a process of truth-finding, just that we leave the parties to support their own positions as adversaries. Without advocacy, American courts do very little on their own. So far that doesn't bother me, but I'm a lawyer. For someone thrown into the system, there can be an incorrect expectation that the court will automatically act to do justice.
        eigenvector 11y ago
ikeboy 11y ago
If you know you have a valid case (you aren't a troll), how hard would it be in practice to find someone to front the money for a lawsuit? Or for that matter, could you go to the competition and sell your patent? That is, say Apple's infringing on my patent; will Samsung buy the patent from me for a fair price and then sue Apple?
- stonemetal 11y ago
  to find someone to front the money for a lawsuit? That is one of the problems, he who fronts the money expects to get the reward. Hence class actions where the lawyer who works on contingency gets millions and those wronged get a nickle.
  - ikeboy 11y ago
    Of course, but 1. You'll still get a significant sum if the total is significant (and if the case is open-and-shut, the risk wouldn't be too high for an investor, so you could get a favorable deal) 2. The infringing company would have to pay in full, which discourages them from doing it in the first place. I guess I really want to know is if this actually happens in practice, or if there are reasons I'm not thinking of that stop it from happening.
- startupfounder 11y ago
  > how hard would it be in practice to find someone to front the money for a lawsuit? What about paying into an troll insurance policy every month so that if a troll wanted to sue you they would see that you were protected and would fight the lawsuit with a giant pile of money. This might deter the troll from suing in the first place.
  - detroitcoder 11y ago
    That is essentially what RPX Corporation provides
  - rollback 11y ago
    There is a whole ecosystem that is funding these lawsuits. It also operates somewhat anonymously, with funding sources working directly with law firms and indirectly with inventors (if they are even involved anymore). I've seen emails between law firms and the inventor that literally title the investors as "the funding source." The original inventor need not put any money at risk, and the law firms and funding sources do their own diligence to decide if it's worth proceeding to file suits. In most cases, the entity filing suit is created for each series of attacks so that if they actually lose a suit and are supposed to pay out, there are no assets from which to pay. Therefore, low risk and potentially very high reward. The biggest factor for that is not the validity of the patents, but the breadth and ability of the patents to be filed against "juicy" targets with a lot of cash. The cost of filing a suit is literally in the hundreds of dollars (I think ~$750) and most of these cases get settled out fairly early because of the immense cost of the defendants to complete the discovery process.
brlewis 11y ago
I'm a software engineer. Consequently I have to admit ignorance about this concept of a valid and useful patent. All I ever see is patents that hinder the Progress of Science and useful Arts. Are there really enough valid and useful patents that we should hesitate in our fight against the rest?
- jebblue 11y ago
  I'm confused, are you asking if you should be fighting patent trolls or patents? If trolls, then fighting them is better than not. Patents are tools, valid and legal, you don't fight tools, you use them, improve them, complain about them, etc.
  - brlewis 11y ago
    I'm talking about patents. Patents are tools in the same sense that landmines are.
    - sosborn 11y ago
      Why choose the word landmine? What's wrong with, say, a hammer?
      - brlewis 11y ago
        Hammers aren't used to exclude people from a path they might otherwise blissfully follow.
        sosborn 11y ago
        I guess I disagree with the idea that patents are inherently bad. Like hammers they can be used to build or to destroy.
        ycombobreaker 11y ago
        You simply aren't using enough hammers! Though seriously, I think the term landmine is loaded toward using patents exclusively as a troll. A wider analogy could be like a toll bridge, where the builder should be compensated by travelers. Some tolls could be usurious, but that wouldn't invalidate the whole principle.
blazespin 11y ago
Fixed it for you: Note that this very tactic is used by big companies to avoid licensing valid and useful patents owned by smaller NON PRACTICING entities. Yes, big companies have a better track record against trolls. And yes, this unfair. But that doesn't mean trolls are OK.
LordKano 11y ago
Is the underlying reason for this strategy the low costs of settlement, or the extremely high costs of lawsuits? Lawyers are expensive. Good lawyers are extremely expensive. There are also experts, investigators and consultants to hire. Everything about the process is expensive. It's very good that newegg is doing this because it helps everyone.

88e282102ae2e5b 11y ago

Really though, their approach is to be known as the company that won't settle and isn't worth suing. Eventually, patent trolls will just avoid them.

JustSomeNobody 11y ago
I don't know about that. I've read plenty of articles on Ars about how incompetent the lawyers for the trolls are.
- throwawaykf05 11y ago
  Ars has a strong anti-patent bias and they are not afraid of twisting facts to fit the narrative. Note how they made the troll lawyers look stupid in their coverage of the TQP/Newegg trial, but TQP prevailed in that one. Newegg recently got off on non-infringement, but that was because Newegg lawyers were incompetent in not bring up that defense the first time. Their bias got so bad that even their typically anti-patent commenters called it out on one of their recent articles.
akshatpradhan 11y ago
This is actually a very important observation. The entire modus operandi of patent trolls is to go after the weak. Let's not kid ourselves when suggesting incompetent lawyers can't gain competence.
- throwawaykf05 11y ago
  > The entire modus operandi of patent trolls is to go after the weak. This is not true. Giants like Apple, Google and Microsoft get sued all the time. They face hundreds of troll lawsuits at any given time.
  - akshatpradhan 11y ago
    Citation for hundreds of troll lawsuits? I'm only seeing one or two incidents when I google up Microsoft Patent Troll or Google Patent Troll.

zeidrich 11y ago

I don't know if I agree. The thing is, what Newegg is doing, especially by publicizing it is to tell trolls to avoid Newegg. That's great for Newegg, but it means that future trolls will skip them, and just go after the startups and small businesses that don't have the resources to fight a lawsuit on principal. I'm not saying that what Newegg is doing is bad, or even that it doesn't help. I'm just saying that the publicity that they are seeking for it might end up working out well for them by getting people to stop suing THEM, but won't work well to get people to stop suing other, smaller businesses. If a patent troll were to sue you for something you've implemented, and you knew that Newegg implemented it too, you'd have a difficult time getting Newegg to fund your defense I think. Unless the troll sues Newegg, nobody's going to help you out. If the trolls just avoid Newegg, they can still get their payout.

mcv 11y ago
What we need is a big party willing to defend all the small parties. How about some sort of patent troll insurance that takes over your defense and sues to invalidate the patent? The insurance should cost a smaller amount of money than settlement would cost. The more companies have that insurance, the bigger the defense you can mount, and the lower the costs for everybody are. The first person sued by the troll immediately takes it to court and wins, invalidating the patent, and ensuring that only one lawsuit will have to be fought and everybody else is safe. Of course this could mean that a lot of people feel they don't need the insurance because someone else will invalidate the patent for them, but if the list of people and companies protected by this insurance is public, those without it will be the first to be sued. So eventually, everybody will want this insurance, and the trolls will be forced to take it to court every time. There's got to be a business model in this.