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

http://arstechnica.com/tech-policy/2013/11/jury-newegg-infringes-spangenberg-patent-must-pay-2-3-million/

by lukeholder • 13 years ago

550 279 13 years ago

arstechnica.com

voltagex_• 13 years ago

Oh. Crap.

scotth• 13 years ago

To put it bluntly, that fucking sucks.

SwellJoe6• 13 years ago

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

jdubs• 13 years ago

So do you expect everyone to understand how the ssl handshake occurs?

SwellJoe6• 13 years ago

No, and that's one of the problems with our patent system.

But, in this case, all they had to do was judge the difference between the inventor of public key encryption and a paid shill for patent trolls. The expert witness on the side of the troll is a guy who does this for a living; the expert witness on NewEgg's side was Whit Fucking Diffie. The "Diffie" in "Diffie-Hellman".

There's a reason patent trolls have all set up shop in this backward little Texas town. It's biggest industry is stifling innovation for the rest of the country.

FiloSottile• 13 years ago

I, for one, expect juries to listen to Whitfield Diffie even if a lawyer keeps saying "but you don't have a master piece of paper".

aethr• 13 years ago

No, but I would expect jurors in a patent validity case to understand the concept of "prior art", which was demonstrated quite conclusively for this "invention".

oddball28• 13 years ago

Therein lies one of the problems with software, patent law, and our judicial process: if the jury doesn't understand the underlying technologies, how can they possibly make an informed and responsible verdict?

I'd also be curious to see the results of an unbiased survey covering the public's awareness and understanding of patent trolls.

If only I could change careers and go into patent law... And help fight the good fight.

tzs• 13 years ago

No Texas district is even in the top 5 for win rates for patent plaintiffs. You'd think if they were "in the pockets" of patent trolls, the trolls would achieve better outcomes there.

The actual reasons filing patent cases in EDTX is popular are:

• EDTX does not have a busy Federal criminal case load. Criminal cases have higher priority than civil cases. If you try to litigate a complex civil case in a district that has a heavy criminal load (e.g., anywhere that has a lot of drug trafficking), it can be nearly impossible to get any court time.

• Patent cases are complex. If you have a judge with little experience with patent cases, things will go slow. So, people like to file in districts that have a few judges with patent case experience.

SwellJoe6• 13 years ago

http://www.technologyreview.com/news/405259/a-haven-for-pate...

http://gizmodo.com/5824912/who-is-really-snuffing-out-americ...

http://www.wired.com/gadgetlab/2011/05/app-store-patent-trol...

Damned near all patent troll are based in hickville towns. It is not coincidence and it is not because the judges are "experienced" with patent cases. It is because those judges side with the plaintiffs.

"No Texas district is even in the top 5 for win rates for patent plaintiffs. You'd think if they were "in the pockets" of patent trolls, the trolls would achieve better outcomes there."

Because they shouldn't win any of these software patent cases. We're talking about trolls...businesses whose only purpose is to shake down people who build real products for real people. Every damned one of these cases should be laughed out of court. They go to Marshall because they won't get laughed out of court.

surrealize2• 13 years ago

No Texas district is even in the top 5 for win rates for patent plaintiffs. You'd think if they were "in the pockets" of patent trolls, the trolls would achieve better outcomes there.

Not necessarily. If all the plaintiffs with poor-quality patents sue in that district (and they mostly do), those losing cases will pull down the patent plaintiff win rate for the district.

So it could still be the most patent-plaintiff-friendly district, even if the win rate is lower there.

clarkm2• 13 years 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.

SwellJoe6• 13 years 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.

noptic• 13 years ago

First of all: News != Truth

I do not belive all Texans (or even the most of them) are as bad as one might think, but the tiny bits of information we get about Texas paint an ugly picture.

We do not get Reports like "Things are going well in Austin!". In the internatiol news reports. We get reports like "Stricter abortion laws, force clinics to shut down", "Armed Militia hunting illegal imgrants at the Border", "Patent troll wins in Texas", "...".

Texas is a great target for critics all over the world:

Texas is well known and is closly associated with Cowboys, strict laws, and the death sentence.

Liberals have someone, to bash and local conservativs are glad that critics get distracted by someone far far away.

So I´m sorry Texas reputation is bad, not only among IT folks, and not only in small hardcore leftist cells.

I do _NOT_ say that all this true. Hell, I would be shocked if it really was!

wnevets• 13 years ago

what a disgrace

gkoberger• 13 years 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-p...

TL;DR: They're patent trolls.

MereInterest• 13 years 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.

arh68• 13 years 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.

reginaldjcooper3• 13 years 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.

yeukhon2• 13 years 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.

josaka2• 13 years ago

I think the patent has expired. Patent apps issued before June 8, 1995 have a 17 year term from issuance. 35 U.S.C. 154. This patent issued in May 1995. See "date of patent" in upper right corner of the pdf doc.

rwbt• 13 years ago

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

daliusd• 13 years ago

A little bit information here:

http://en.wikipedia.org/wiki/United_States_District_Court_fo...

While it would be interesting to know why it happens in Texas.

talmand13• 13 years 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• 13 years ago

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

Fishrock123• 13 years ago

Bullcrap.

loganfsmyth• 13 years ago

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

downer96• 13 years ago

If the glove don't fit, you must acquit.

taspeotis• 13 years 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.

kintamanimatt2• 13 years 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.

Amadou• 13 years ago

Even if they win, they've lost; the legal costs alone are silly and aren't paid for by the loser.

You could have said the exact same thing when they first went to court and it would have been just as true. But that's why they are doing it. They already lost simply by operating in a country with such broken patents.

colechristensen• 13 years ago

The chief legal officer of Newegg _wants_ these cases and to take them to completion in attempts to correct the problems with software patents. One should be optimistic because Newegg is putting up the good fight and winning rather often. If it were almost any other company, you'd be hearing about a settlement if you heard anything at all. As a Newegg customer, I am glad that some of my dollars are going towards these kinds of legal costs and that's the type of thing that comes to mind when making decisions about where to buy.

Some more information about previous cases:

http://arstechnica.com/tech-policy/2013/05/newegg-nukes-corp...

indrax• 13 years 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.

alextingle• 13 years 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.

talmand13• 13 years ago

If you don't stand up to a bully, then you will always be the victim of bullies.

I would imagine some patent trolls think twice about going after Newegg because they will fight. Fighting in court is not what a patent troll wants, they want the easy victim that will surrender easily.

Because if they go to court, not only does it cost them money but it could cost them their patent. It's better to go after an easier target.

It's why Wal-Mart was known for fighting all lawsuits back in the day. Because after the first time you settle with someone that "slipped" in the aisles you will suddenly find that someone "slips" in your stores nearly every day.

brianobush• 13 years 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• 13 years 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/

talmand13• 13 years 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.

zacinbusiness2• 13 years 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?

valleyer2• 13 years ago

You're thinking of criminal cases. Many civil trials only require a certain majority (say, nine of twelve) to find a verdict.

zacinbusiness2• 13 years 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!

awwducks2• 13 years ago

Here's coverage from the local paper.

http://www.marshallnewsmessenger.com/news/online-retailer-ne...

Seems to be more of a TQP slant to it.

droithomme2• 13 years 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.

EdgarVerona5• 13 years 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?

msmith2• 13 years ago

“He doesn’t have all these fancy degrees,” said Fenster.

I find it funny that Fenster, after praising Jones in this way, would attack Diffie's credibility by pointing out that he lacks a master's or PhD.

[1] http://arstechnica.com/tech-policy/2013/11/newegg-trial-cryp...

jdlshore• 13 years ago

I didn't get that. It spends roughly the first half presenting the TQP arguments and roughly the second half presenting the Newegg arguments. They sound like they might be quotes from the case's opening arguments.

If they are, I can see why TQP won. The TQP statements do a much better job of appealing to emotion, talking about "the little guy" who "doesn't have all these fancy degrees." A "hard worker" who created "the invention that makes [Internet credit card] transactions safe," and TQP saw companies "using it and not paying for it," so they "invested millions of dollars" and now "more than 125 companies, including PetSmart and Amazon" have taken licenses.

Can't say I like the results, but I can see why it worked. It tells a story that people love to believe.

awwducks2• 13 years ago

I meant "slant" compared to the OP where Ars just calls TQP a patent troll straight up.

batgaijin2• 13 years 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-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• 13 years 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-f...).

batgaijin2• 13 years 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.

andybak• 13 years ago

There's some rather large markets outside the US too!

How much better is the patent landscape in the EU? I've heard conflicting reports.

pbreit• 13 years ago

Kudos to NewEgg for the immense risk in fighting these.

droithomme2• 13 years 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• 13 years ago

going forward, maybe. but AES was not standardized until 2001, and not in wide browser adoption for what? another 10 years?

salient• 13 years ago

Maybe this will be the motivation everyone else needs to dump RC4?

http://googleonlinesecurity.blogspot.com/2013/11/a-roster-of...

throwawaykf4• 13 years ago

You really have to read the claims to understand what the patent covers instead of trying to understand it from what is infringing. This patent has pretty easy-to-read claims. It essentially covers an encryption method where the encryption/decryption keys are updated (edit to correct my misreading) if a certain number of bytes are detected to have been exchanged. It's kind of a key-synchronization method.

danielharan• 13 years ago

Then I'm actually puzzled by how it applies to NewEgg and so many other e-commerce companies.

kunai• 13 years 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.

valleyer2• 13 years 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• 13 years ago

By extension, would you prefer that a panel of doctors preside over malpractice cases?

zellyn2• 13 years 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?

jamesaguilar• 13 years 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.

saryant3• 13 years ago

FWIW, a friend of mine who's an IP lawyer said the same to me.

EdgarVerona5• 13 years 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.

surrealize2• 13 years ago

There are actually other districts that have higher win rates for patent trolls.

This would be a good point if patent cases were randomly assigned to districts. But they're not, of course - EDT courts are stuffed full of BS patent troll cases. So of course the patent suit win rate is lower there. It's still famously friendly to patent plaintiffs.

talmand13• 13 years ago

Personally, I think that theory is utter crap.

A well-informed jury about the topic at hand is bad for one party of a lawsuit. It's better that a jury is a blank slate so that the lawyers can attempt to convince them their story is the one, true story in the debate. It's why during jury selection they often actively attempt to find a juror that knows nothing about the topic or carries no opinion about it.

Of course, that's not necessarily true across the board. Sometimes one side does want people that know the topic and have an opinion about it but I bet those are mostly criminal cases.

Plus, to me anyway, if the juries did actually have this supposed high-level of knowledge and experience then the results would be more balanced. Because there's no way you can tell me that nearly every single patent troll out there is in the right with these cases. More of these patents should be tossed out for the silliness that they represent.

Lawyers do their best to get into courts and before judges they feel will be sympathetic to their case. To do otherwise is a disservice to their client.

mark2123• 13 years ago

this. It's not the win rate per se, it's the fact that the District Court judges and clerks are unusually experienced in IP litigation. You have to understand that in other districts the judges are doing federal criminal matters, civil class actions, debt collection abuse litigation, admiralty law (any slip and fall on a cruise ship is a federal lawsuit) and so on.

In ED Texas, the clerks all have hard-science undergrad (and sometimes graduate) degrees as well as degrees from top law schools because this is a major leagues of IP litigation. Want a guaranteed six figure income as a 26 year old? Clerk for two years in Marshall, then send your resume to Cooley or Wilson Sonsini or Loeb & Loeb and see how fast they return your call.

This is miles and miles beyond most lawyers, who struggle with basic math and still use dictaphones and WordPerfect and aol.com email addresses.

This also means that the litigation goes faster, which is always something that clients complain about. Win or lose, you want the dispute resolved.

vellum• 13 years ago

Patent trolls like EDT because it's a "rocket docket". EDT judges speed up the process and it forces the defendants to play catch up. They can't spend as much time doing research on the patents. A shorter trial also limits the up-front costs for the patent trolls

http://www.law.com/jsp/article.jsp?id=1103549728998&slreturn...

drewcrawford• 13 years ago

I have no special legal knowledge, but I spent several years within spitting distance of this district, so I know the area, was in the jury pool, and as far as I know might still be close enough to be called as a juror.

Based on that experience, I am inclined to disagree with your general premise. While these lawsuits bring a tiny bit of additional business to directly-related service industries (hotels, copy shops) my observation is that most of the "big money" stays within the legal industry, which is mostly based in the home locations of wherever these companies are. It is further my observation that the East District Court is not unusual in the kind of business that it brings to the surrounding area relative to other district courts (e.g., if not patent lawsuits, other suits) so there isn't much of a desire to protect its reputation as a patent court.

Finally while these stories do receive "national attention", this is pretty much entirely within the software development community, and patent lawyers. Ordinary people in East Texas don't follow any stories about patent lawsuits ever. They're boring.

Here's a benchmark for you: I am a software developer, who lobbied my congressman about patent law earlier this month, and on the day this lawsuit was filed, I was 45 minutes from the court by car. I am the textbook case of a person who would be following this story. Today is the first day I have ever heard anything about it.

zellyn2• 13 years ago

Thanks for the reply: that makes a lot of sense.

ndesaulniers• 13 years 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• 13 years ago

You might have been correct originally, but the number of patent cases has changed the focus.

linuxhansl• 13 years 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.

EdgarVerona5• 13 years 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.

natch4• 13 years 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.

enneff• 13 years ago

This comment makes you the bigot.

clarkm2• 13 years ago

And you think this because?

natch4• 13 years ago

Because of the jury's decision.

tsotha3• 13 years ago

Do you have any actual reason to believe this?

natch4• 13 years ago

The jury's decision... frankly I trust Whit Diffie on this stuff more than I would trust a jury from Marshall.

deelowe• 13 years ago

Pot, meet kettle?

Ahh yes. Nothing but knuckle draggers out there. Am I right? Nevermind all the great engineering schools, top cancer centers, and major tech hubs. Nope. Texas is nothing but racist bigots despite being one of the most racially and culturally (the most?) states in the union.

Believe it or not, the lower right 1/3 of the US is a little more diverse than is portrayed on Dallas and The Dukes of Hazzard.

consultant235222• 13 years ago

I grew up and live in the lower right 1/3 of the US and his depiction is not that far off. Based on totally made up statistics that I'm pulling from my nether regions right now I'd guess at least one jury member had the exact thought the GP mentioned, while at least a few others just subconsciously would not lend credibility to the "dirty hippy."

woodchuck64• 13 years ago

I think you're absolutely right. In fact, the TQP lawyer went on the attack, which would be a miscalculation anywhere but Texas:

TQP lawyer Marc Fenster could have acknowledged Diffie's accomplishments while arguing that his client—an admittedly little guy—still should get his rights, his little piece of "intellectual property."
That's not what Fenster did. He went on the attack.

http://arstechnica.com/tech-policy/2013/11/newegg-trial-cryp...

micahgoulart• 13 years 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-cryp...

ScottBurson• 13 years 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.

erichurkman• 13 years 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.)

talmand13• 13 years ago

Don't forget going to a higher court will likely get the case out of that district's court.

WildUtah• 13 years 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.

davidw• 13 years ago

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

meritt• 13 years ago

"Why Patent Trolls Worldwide Love Marshall, Texas" -- http://www.techdirt.com/articles/20060203/0332207.shtml

Nearly 8 years ago. Unfortunately nothing whatsoever has changed.

shmerl2• 13 years 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.

nitrogen2• 13 years 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.

talmand13• 13 years ago

If there's no gag order, jurors will often talk about what happened. Now, whether to believe them or not is another thing.

smegel• 13 years ago

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

saryant3• 13 years 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• 13 years 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.

saryant3• 13 years ago

Fair enough, it's a poor analogy. I absolutely agree with your assessment of patents however.

astrodust• 13 years 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• 13 years ago

What are you talking about? We bash Hollywood all the time. Now we're bashing East Texas - not all 26 million of you.

SwellJoe6• 13 years 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• 13 years 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.

ScottWhigham• 13 years 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.

warmwaffles3• 13 years ago

There has been a fair share of Texas bashing here. Mostly complaining about EDT and other various shenanigans going on.

Tloewald4• 13 years ago

You should see the French-bashing here.

lsaferite• 13 years 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• 13 years ago

It's getting late and I don't really have the energy to dig into this patent (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 ... is it just because it transmits the data in "blocks"? Pretty low bar for novelty, there.

bradleyjg2• 13 years 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• 13 years 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• 13 years 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.

phaus• 13 years ago

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.

I'm not sure if special appointments of patent office courts would help. Look at the people congress places on technology commissions. Some of them wear their badges of technological ignorance as if its something to be proud of.

venomsnake• 13 years 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.

droopybuns2• 13 years 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.

EdgarVerona5• 13 years 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.

nitrogen2• 13 years 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• 13 years 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/r...

sytelus• 13 years 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!

tedunangst2• 13 years 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.

DannyBee2• 13 years 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

rurounijones• 13 years ago

Patent holders win 78 percent of the time [In Marshall], compared with an average of 59 percent nationwide, according to LegalMetric, a company that tracks patent litigation.

throwawaykf4• 13 years ago

Here's a much more detailed analysis with a lot more data and nuance:

Mark Lemley, "Where to file your patent case"

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1597919

EDT is not actually at the top for claimant win rates.

rplnt• 13 years ago

Can you just pick any court you want? And the appeal would be held where?

fpp2• 13 years ago

It would be interesting to see some of the cases where the plaintiffs have not won in Marshall.

As this place in Texas has over the last 10 years built an industry around the IP cases going to trial there (with e.g. short-term office rental rates as high as in NYC) - maybe those are cases that are not "supporting" their continuing gold rush.

None of that of course touches on the fundamental flaw in the system that IP cases are so exorbitantly expensive that most have to pay those modern "highwaymen" even when knowing that their demands are most of the time completely without base and are solely a legalized form of extortion.

Just consider how you feel, when you worked for years and developed / invented a large scale real-world solution and those crooks with IP / patents originally being provided to protect their work on bicycles and abacuses are lining up outside your office all claiming that they would have done all the work.

So the first step to cure this must be a protection of business that have invested substantial time and money into their products, are bona fide and actually running a business based on their work, to be able to defend themselves against such frivolous law abuses.

peroo• 13 years ago

Planet Money has a story on one such case: http://www.npr.org/blogs/money/2013/06/07/188370495/when-pat...

In that particular case, which was regarding a ridiculously broad patent for offsite network-backups, the plaintiff lost on a technicality; there was proof of a co-inventor who hadn't been included in the patent-filing. If it wasn't for that oversight they would almost certainly have won the case.

noonespecial2• 13 years ago

...all claiming that they would have done all the work.

Its worse than that. They claim that the speculative idea was all of the work, and you're nothing but a thief who stole it and did the easy part of, you know, actually doing stuff.

perlpimp• 13 years ago

Can you appeal these cases? I mean 2 million dollars is no pocket change and instead you can afford some good lawyers for that much money.

I mean to appeal the case judgement in another state...

chimeracoder• 13 years ago

Not probably. The economy does run on the lawsuits.

I remember reading a while back that the hotel closest to the courthouse was owned by the son of one of the judges. Can't find the source right now, though.

driverdan2• 13 years ago

I wonder if running an anti-patent troll marketing campaign in Marshall would help fix this. Educate the population about the problem.

pistle2• 13 years ago

They call that quaint there... These aren't stupid hicks. If you think for a second that these folks don't see this as an awesome way to give a big Texas flying finger to Silicon Valley types with their skinny jeans, silly beards, and smugnaciousness... you've merely increased their will to continue this process.

bentcorner• 13 years ago

It looks like the population of Marshall is ~23K as of 2010. I wonder if it would be possible to pay a sizable number of people to move to Marshall to alter the average patent sentiment.

clavalle• 13 years ago

I doubt it. They are not stupid. They know what they are doing. They are attracting more patent cases. They are acting rationally in their own best interest.

Crunching the numbers, though, there are around 171,000 people in the counties that make up the juries. If national ratios of under 18 and felon populations hold that is a 115,000 member jury pool. If a jury is 8 to 12 people it would only take an influx of 11,000 to 17,000 software patent unfriendly people to average one juror on that side per case.

In short: Perhaps it is time to create a techie colony in the Marshall area. Remote working for the win!

drzaiusapelord• 13 years ago

I posted something similar in the previous HN thread where claims were made about how these jurors are the best jurors in IP cases because they're so "experienced" and this was a slam dunk victory for Newegg. Afterall, Diffie spoke, so that seals the deal, right? My skepticism of those claims didn't go over too well.

Well, I was right. I really wish people better appreciated how corrupt and broken the patent process is and how appealing to ultra-conservative districts isn't some solution. Its part of the problem.

If anything, this verdict should prove that we are farther from a solution than ever. Maybe we'll have better luck with the next congress.

concernedctzn2• 13 years ago

What if everyone decided to put a tech embargo on this town? Refusing to do business with the inhabitants.

bdcravens3• 13 years ago

That ignores the way wholesale channels work, and I'm pretty sure a judge's son would setup shop by acquiring said embargoed products elsewhere. It would have less than 1% of an impact on the average juror's life.

peeters3• 13 years ago

Honest question from an ignoramus, would companies be able to avoid fighting patent battles in this district by refusing to do business there (thus preventing any claim of jurisdiction)? If so, what's the size of the market they would have to avoid?

dmbass• 13 years ago

The United States of America. These cases are in federal courts.

thearn4• 13 years ago

Assuming that this is a conservatively minded region (correct me if I'm wrong), aren't frivolous lawsuits one of the things that they campaign against?

mark2123• 13 years ago

Texas is conservative -- with a small c. Lots of suspicion towards outsiders generally, and towards large corporations in particular, have resulted in many outsized jury verdicts (in non-IP or patent cases) from Texas, as well as other red states like Mississippi, Alabama, Florida panhandle, etc. It certainly isn't the 17 story cash register that LA Superior Court, Downtown Civil Division is, but the smaller counties in Texas aren't bad at all from a plaintiffs' perspective. Just be sure the lead lawyer on the trial team is from around there and speaks with something of a twang.

marquis• 13 years ago

This particular town was exposed as being well, corrupt, when it comes to patent suits. This American Life: they did a great job on this topic.

http://www.thisamericanlife.org/radio-archives/episode/441/t...

garthdog• 13 years ago

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

charlysisto• 13 years ago

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

Osiris• 13 years 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.

baddox2• 13 years ago

Who would judge whether someone was truly an "expert" in the area of study?

PeterisP• 13 years ago

Judges would be perfectly capable of doing so.

khafra• 13 years 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?

ck22• 13 years ago

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

bdcravens3• 13 years 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.

ck22• 13 years 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• 13 years ago

Can we troll the patent trolls yet?

pistle2• 13 years 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.

mattlutze• 13 years 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• 13 years 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.

talmand13• 13 years 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• 13 years 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• 13 years 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.

justincormack2• 13 years ago

its hard to guess what trolls will do. You could come to Europe.

TheLegace• 13 years 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.

ghshephard• 13 years 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• 13 years 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)

talmand13• 13 years ago

I agree, at this point if you do anything tech related you are infringing somebody's patent on something. Whether you get sued or not depends on how much money you have.

As for the legal extortion using lawsuits. That's an old game in the US, there are people who make an active living out of suing somebody for something and offering to settle. Get a copyright infringement letter from somebody? I guarantee you that the settlement offer will be much less than defending yourself in court, even if they are mistaken in their accusation. It's an industry that people have been abusing for years, if not decades.

The courts themselves have to do something to stop this but I see no signs they are interested in reducing the need for more resources to be spent on things the courts need to address these cases.

CalRobert• 13 years 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• 13 years 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• 13 years ago

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

ytNumbers• 13 years 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• 13 years ago

Unless you got sued by 10 trolls.

eliben• 13 years ago

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

josefresco• 13 years 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• 13 years ago

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

arbuge• 13 years 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.

lifeisstillgood4• 13 years 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• 13 years 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?

lifeisstillgood4• 13 years 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...)

bborud• 13 years ago

It is unfixable because people think that fixing it is a solution. It isn't. Patents need to be abolished completely. The world for which they were designed does not exist anymore.

mkramlich• 13 years 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• 13 years ago

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

consultant235222• 13 years 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.

talmand13• 13 years 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• 13 years 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.

talmand13• 13 years ago

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

mynegation• 13 years 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• 13 years ago

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

dec0dedab0de• 13 years ago

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

bovermyer• 13 years ago

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

dreamdu5t4• 13 years 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.

caycep• 13 years 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.

CamperBob22• 13 years 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• 13 years 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• 13 years 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.

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

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