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Newegg vs. Patent Trolls: When We Win, You Win

blog.newegg.com

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Re: Newegg vs. Patent Trolls: When We Win, You Win

#61

Post by acveilleux »

brlewis wrote: post #57
throwawaykf05 wrote: post #25

Earlier quoted context omitted.

> 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…

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?

There are useful patents though they may hinder more then they help depending on your PoV. Various codecs and some crypto algorithms come to mind.

You run into a lot more useful ones at the intersection with the physical world where some protection lets a company get a chance to be the first one to market and reap some benefit.

In some industries (Pharma) it's really the only practical approach due to the extreme development costs (easily over 1B$) and often cheap production costs.

Re: Newegg vs. Patent Trolls: When We Win, You Win

#62

Post by acveilleux »

88e282102ae2e5b wrote: post #32
mcherm wrote: post #14

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)?

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.

As a bonus, it's also a really good source of PR with their core Geek demographics. That goodwill offsets a lot of their legal costs. That and an in-house legal team so they pay salary, not outrageous hourly fees.

Re: Newegg vs. Patent Trolls: When We Win, You Win

#63

Post by jebblue »

philipov wrote: post #22
ExpiredLink wrote: post #11

Earlier quoted context omitted.

> horrendously broken patent system If the patent system were "horrendously broken" it would have been fixed long ago. It obviously serves powerful political interests horrendously well.

Yes, it serves the political interest of "I need more money"

The point of a patent is to protect your idea from being sabotaged by others so the money goes into your account hopefully and feeds your family and pays for your kids education, etc. Patents are not a block, they are a building block. If you find a patent that makes you think you are stuck and have to abandon your idea; think again. Look for ways to improve on the already patented idea and file a new patent referencing that patent and any others that apply. Patents are not a block; they are a building block. I'm not a lawyer though so my views are not to be taken as legal advice.

Google "build on a patent", here's on example of what I'm talking about:

"Your brilliant idea needn't fall by the wayside simply because you don't want to deal with the patent process."

Re: Newegg vs. Patent Trolls: When We Win, You Win

#64

Post by dtparr »

tachion wrote: post #41
Lawtonfogle wrote: post #35

Earlier quoted context omitted.

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 r…

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... ;)

How do they avoid disincentivizing small parties from suing larger ones in this system? Let's say I have a strong case (say 90% chance of winning) to sue an insurance company for, say, $50k. But the cost of their legal team/experts/discovery to defend it is, ~$500k, then things look a bit more bleak.

Are there caps? Is one side prohibited from charging substantially more than the other?

Re: Newegg vs. Patent Trolls: When We Win, You Win

#65

Post by jcranmer »

ghayes wrote: post #7
yenda wrote: post #5

No patent for ideas in Europe, problem solved.

The Alice[1] opinion moved US law closer to what you are looking for, rejecting patents that are simply ideas "by means of a computer." [1] https://en.wikipedia.org/wiki/Alice_Corp._v._CLS_Bank_Int%27...

It's worth noting that the Supreme Court has generally given rulings that suggest that intimate that software patents are broadly unpatentable. The key decision that allowed software patents in the first place was State St., which was never heard by the Supreme Court (indeed, in Bilski, every opinion went out of their way to emphasize just how wrong State St. was).

Between Bilski, Alice, and even the older decisions of Benson, Flook, and Diamond v. Diehr, SCOTUS has generally held that most software patents are basically inherently invalid. It should also be pointed out that many patents favored by trolls would also fail obviousness and/or prior art tests: the problem isn't that the patents are valid, it's that trolls can extract money from people by charging them somewhat less than the cost to go to court to prove that the troll's patents are invalid.

One way you could fix the system is to punish the trolls for knowingly peddling invalid patents: if an entity gets three patents invalidated by the court system and they've been aggressive in suing people for compliance with those invalid patents, then all patents that they hold are summarily invalidated and they get prohibited from enforcing any patents for 5 years. On top of having to reimburse everyone they charged (plus damages… plus interest ☺).

Re: Newegg vs. Patent Trolls: When We Win, You Win

#66

Post by samch »

Seriously excellent work by Newegg. I'm worried, however, that they've now made themselves well-known enough in the industry to avoid future targeting by patent trolls. Honestly, who would go after Newegg at this point with their current track record? In the long run, this probably helps Newegg a lot with good PR and fewer trolls attacking them. With the exception of the specific cases they've already won, I just don't see this really helping the little guys over the long run. Patent trolls are going to remain a huge headache until we get serious reform.

Re: Newegg vs. Patent Trolls: When We Win, You Win

#67

Post by AnimalMuppet »

smeyer wrote: post #40
pjc50 wrote: post #20

Earlier quoted context omitted.

USPTO is the patent granting entity. They perform essentially two checks: - does the patent have the right structure? (A series of progressively refined claims) - is the patent sufficiently different from all other patents? What they don't do is check for actual originality, because that's extremely hard in a technical field. That part of the process has to be tested in court. Software really proceeds too fast for th…

>the process of using a computer ... to do something is a physical process and therefore patentable. You have to be careful not to run afoul of Alice[1] [1] https://en.wikipedia.org/wiki/Alice_Corp._v._CLS_Bank_Int%27...

You have to be careful not to run afoul of Alice now. At the time many patents were granted, you didn't. So now you have to fight in court to prove that Alice applies, and therefore that the patent is invalid.

Re: Newegg vs. Patent Trolls: When We Win, You Win

#68

Post by pjc50 »

ikeboy wrote: post #36
throwawaykf05 wrote: post #25

Earlier quoted context omitted.

> 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…

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?

The cost is not just the lawyers' time (which you may be able to get on contingency), but the administrative time: managing the lawsuit, discovery, assembling evidence, time of witnesses, and so on. Then there's the business risk: lawsuits only happen when both parties think they have a case, so by definition one of them will be disappointed.

The selling out to a bigger player does happen, although since it's a distress sale it's often for a low value.

Re: Newegg vs. Patent Trolls: When We Win, You Win

#69

Post by devy »

Erich Spangenberg is America's most notorious patent troll mafia head. I blames him for taking full advantage of the broken U.S. patent system to squeeze upward of $30 billion each year and the tremendous waste of use our legal system resources.

EFF[1] and NYT[2] ran full reports on him previously.

[1] https://www.eff.org/deeplinks/2013/07/times-profiles-patent-...

[2] http://www.nytimes.com/2013/07/14/business/has-patent-will-s...

Re: Newegg vs. Patent Trolls: When We Win, You Win

#70

Post by pjc50 »

jebblue wrote: post #63
philipov wrote: post #22

Earlier quoted context omitted.

Yes, it serves the political interest of "I need more money"

The point of a patent is to protect your idea from being sabotaged by others so the money goes into your account hopefully and feeds your family and pays for your kids education, etc. Patents are not a block, they are a building block. If you find a patent that makes you think you are stuck and have to abandon your idea; think again. Look for ways to improve on the already patented idea and file a new patent referenc…

Patents absolutely are a block if you need to be compatible with a patented system.
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