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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

#121

Post by acomjean »

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?

Some Patent lawsuits are taken on contingency (the winning lawers get a good size cut).

This isn't common. See Jarg corp which was basically out of cash, then hired lawyers on contingency (with patents licensed from Northeastern University) then sued google. I think google paid northeastern in a settlement.

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

#122

Post by notahacker »

tux1968 wrote: post #118
x0054 wrote: post #100

Perhaps a solution to this would be a Kickstarter like anti patent troll site. Patent trolls usually go after smaller businesses at first, businesses who could not possibly afford to fight, even if they wanted. The site would allow a business to post their legal case online, and other businesses who face similar exposure, could contribute to the defense fund. The "perk" of contributing would be that you would get acc…

https://en.wikipedia.org/wiki/Open_Invention_Network

Also valuable, but as I understand it the OP's solution is applicable specifically to companies that have actually received C&Ds and suspect there are others [about to be] on the end of a similar shakedown which might have an interest in pooling defence teams.

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

#123

Post by ScottBurson »

x0054 wrote: post #100

Perhaps a solution to this would be a Kickstarter like anti patent troll site. Patent trolls usually go after smaller businesses at first, businesses who could not possibly afford to fight, even if they wanted. The site would allow a business to post their legal case online, and other businesses who face similar exposure, could contribute to the defense fund. The "perk" of contributing would be that you would get acc…

This is an intriguing idea, but I think it would have a big marketing problem. Most of the people who are at risk of being sued by a patent troll aren't aware of that risk, or so I imagine. Maybe that's changing as the problem gets more press, but I still think the necessary outreach would be difficult.

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

#124

Post by [deleted] »

ScottBurson wrote: post #123
x0054 wrote: post #100

Perhaps a solution to this would be a Kickstarter like anti patent troll site. Patent trolls usually go after smaller businesses at first, businesses who could not possibly afford to fight, even if they wanted. The site would allow a business to post their legal case online, and other businesses who face similar exposure, could contribute to the defense fund. The "perk" of contributing would be that you would get acc…

This is an intriguing idea, but I think it would have a big marketing problem. Most of the people who are at risk of being sued by a patent troll aren't aware of that risk, or so I imagine. Maybe that's changing as the problem gets more press, but I still think the necessary outreach would be difficult.

[deleted]

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

#125

Post by notahacker »

ScottBurson wrote: post #123
x0054 wrote: post #100

Perhaps a solution to this would be a Kickstarter like anti patent troll site. Patent trolls usually go after smaller businesses at first, businesses who could not possibly afford to fight, even if they wanted. The site would allow a business to post their legal case online, and other businesses who face similar exposure, could contribute to the defense fund. The "perk" of contributing would be that you would get acc…

This is an intriguing idea, but I think it would have a big marketing problem. Most of the people who are at risk of being sued by a patent troll aren't aware of that risk, or so I imagine. Maybe that's changing as the problem gets more press, but I still think the necessary outreach would be difficult.

Lawyers specialising in handling IP cases would probably have an interest in such a service though; potentially far more work for them than agreeing with the client that settling probably is the cheapest option. Insurers underwriting intellectual property liability insurance (it exists!) also have a very strong incentive to encourage, or even require their clients to use such a service.

And for some non-software industries many firms might have a pretty good idea which competitors/suppliers/clients of theirs are likely to be threatened by the same patent.

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

#126

Post by Retric »

duskwuff wrote: post #83
jcranmer wrote: post #65

Earlier quoted context omitted.

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…

> One way you could fix the system is to punish the trolls for knowingly peddling invalid patents... Most "patent trolls" spin off separate legal entities for each patent they're using. This is to minimize losses if a suit goes wrong and they end up having to pay legal fees. So, trying to punish trolls would be extraordinarily difficult; you'd have to figure out some way to explicitly link all of these entities, whic…

This provides less protection than is often assumed.

'Piercing the corporate veil'

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

#127

Post by dasil003 »

throwawaykf05 wrote: post #105
brlewis wrote: post #57

Earlier quoted context omitted.

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?

Can you explain why you think patents hinder progress of science and the useful arts? How many cases do you know of that people were unable to advance the arts because of a patent? People talk about patent trolls suing startups and main street shops: How many of them actually do anything technically innovative? Hinder commercialization of some old technology? Sure, patents can do that. Stifle progress? Not so much. T…

Your metrics are the percentage of patents asserted and how many make it to trial? You don't even consider the amount of settlements that happened for obvious universal technologies, or perhaps more importantly the number of uses of a patent to implement something useful which could not have been developed independently.

You're asking to assume patents are useful until proven otherwise, and waving your hands about cherry-picking, when in fact you'd have to cherry-pick pretty severely to find an example of a software patent which would stand up to an honest evaluation of its novelty. This is because software is not created by lone inventors having eureka moments behind closed doors—the state of the art is pushed forward primarily through massive collaboration. The vast majority of software patents only exist because software and mathematics are arcane topics that the patent office doesn't have the expertise to understand or the incentive to evaluate honestly.

Software patents and IP are not natural laws with inherent value. It is not for us to empirically prove their harm, rather they are specific legal constructs designed for the public good, and thus their good must be justified, not the other way around.

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

#128

Post by darkarmani »

throwawaykf05 wrote: post #105
brlewis wrote: post #57

Earlier quoted context omitted.

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?

Can you explain why you think patents hinder progress of science and the useful arts? How many cases do you know of that people were unable to advance the arts because of a patent? People talk about patent trolls suing startups and main street shops: How many of them actually do anything technically innovative? Hinder commercialization of some old technology? Sure, patents can do that. Stifle progress? Not so much. T…

> I'll give you some numbers less than 1% of patents are ever asserted, and only a fraction of them make it to a trial. The vast majority of patents lie fallow because there is no demand for their technology in the market. Now does that look like a serious problem anymore?

It sounds like you are arguing to abolish patents. The rest of the world is held hostage for under 1% of the patents issued? It doesn't sound like a serious problem to just do away with then all according to your stats.

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

#130

Post by sytelus »

As everyone knows in industry, this is not really a "win". Patent trolls are setup in such a way that if they win they make lot of money and if they lose then they lose very little. In many cases, they don't have to even pay damage or lawyers fee for other party. If they are ever ordered to do so then they would just announce bankruptcy of their shell company. They don't even lose their portfolio because it's allocated in to hundreds of shell companies. So in nutshell, Newegg has done very little damage to the troll. The troll already made $45M and now they will just move on to next patent in their next shell company.

All the other efforts like preventing bad patents through StackExchange etc also have very little impact on troll business model. The only real weapon you can use against them is crafting laws that strongly discourage trolling. One would think tech industry with 100s of billions in bank have enough lobby power to get this done quickly. The issue again is that tech industry itself want to own such lousy patents to use against each other. So the industry will only support weaker forms of laws against trolling. I would highly suspect there would be end of trolling anytime soon. Industry as a whole would be more than willing to absorb this cost instead of giving up on their own ammo.

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