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How Newegg Saved Online Retail

timothy posted about a year and a half ago | from the thank-heavens-for-angry-lawyers dept.

Businesses 259

bargainsale writes with an account at Ars Technica of "the inspiring story of Newegg vs the patent troll. Perhaps the system does work after all." Newegg's lawyer Lee Cheng has some choice words for the business model employed by Soverain Software, the patent troll which tried, with some success, to exact money from online retailers for using online shopping carts. Newegg has prevailed, though, and Soverain's claims are toast. From Ars: "The ruling effectively shuts down dozens of the lawsuits Soverain filed last year against Nordstrom's, Macy's, Home Depot, Radioshack, Kohl's, and many others (see our chart on page 2). All of them did nothing more than provide shoppers with basic online checkout technology. Soverain used two patents, numbers 5,715,314 and 5,909,492, to claim ownership of the "shopping carts" commonly used in online stores. In some cases, it wielded a third patent, No. 7,272,639."

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259 comments

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That was too good... (-1)

Anonymous Coward | about a year and a half ago | (#42711931)

I just let loose all sorts of sticky goodies into a small child's asshole. I'm coming after your children now!

Patent troll? (-1, Troll)

Anonymous Coward | about a year and a half ago | (#42711979)

Since when is a legitimate patent holder a 'patent troll'? This seems like an arbitrary distinction. Why are these people scoffed at for standing up for the right to have what is theirs?

Re:Patent troll? (5, Informative)

Umuri (897961) | about a year and a half ago | (#42712025)

A patent troll is one who files or buys overly broad patents, expressly for the purpose of not pursuing active development or marketing of their patents. A patent troll's business plan is to wait for a company to make big on something that might infringe, or buy portfolios that might be infringed on, and keep them in obscurity, till such time they can be used to sue(read: extort) a company such that proper legal defense is purposefully less than the cost to comply with their licensing agreements.

In short, a patent troll would prefer you not learn about their patent till it's too late, while a proper patent holder wants you to know of their patent so that you will license it from them for your technology.

Re:Patent troll? (-1)

Anonymous Coward | about a year and a half ago | (#42712035)

Please pray for those who were lost this weekend in Brazil. Over 200 souls were taken before their time.

Re:Patent troll? (2, Insightful)

Anonymous Coward | about a year and a half ago | (#42712065)

Since they died, it apparently was their time.

Re:Patent troll? (-1)

Anonymous Coward | about a year and a half ago | (#42712161)

Ok I'll pra-nvm it's just brs

Re:Patent troll? (0, Offtopic)

Anonymous Coward | about a year and a half ago | (#42712245)

Please stick to the subject.

Re:Patent troll? (-1)

Anonymous Coward | about a year and a half ago | (#42712493)

Distinct from an internet troll, like the AC you just replied to...

Re:Patent troll? (5, Interesting)

pwizard2 (920421) | about a year and a half ago | (#42712501)

It seems like the easy way to fix the patent troll situation is for the government to require yearly progress reports (it's not too much to ask to have the patent holder produce something that indicates actual development work is going on whether the product is complete or not). The patent should be rendered null and void if the patent holder has done nothing but sit on it; if the holder hasn't done anything then it's time to let someone else try. No more free money by gaming the system and shaking people down.

Re:Patent troll? (5, Informative)

v1 (525388) | about a year and a half ago | (#42712039)

Since when is a legitimate patent holder a 'patent troll'?

A "patent troll" is someone that takes advantage of patent law for monetary gain based on the innovation of others. Patent trolls aren't trying to claim reward for what is theirs. They simply game the system and out-maneuver the innovators such that, by legal definition (but not common sense) they are entitled to reward.

As such, it's mostly counterproductive for the purpose that the method of patenting was intended to serve. (encouraging and rewarding innovation)

Patent trolls siphon off some of the rewards of innovation through litigation and through the licensing of innovations where they themselves were not the innovator.

Fortunately, a lot of courts (at least those that'd don't directly benefit from the litigations, such as texas east district) have identified these people as taking advantage of the legal system and costing it money in exchange not for the support of innovation, but for the enrichment of the trolls and stifling of innovation, and are starting to push for change.

Re:Patent troll? (4, Informative)

SternisheFan (2529412) | about a year and a half ago | (#42712129)

From the linked article's interview of Lee Cheng, Newegg's Chief Legal Officer:

" Just think about the dynamic if you're a juror. Most of the jury could be very pro defense, and think the plaintiff is full of it. But all you need is a single one who is friendly to the plaintiff and holds out on the verdict. You just need one really stubborn person—that can drive a whole jury to make a decision that swings the other way. Everyone wants to go home. It's not their money. Defense oriented jurors are more likely to compromise and say, 'Maybe we'll just split the baby. Maybe we'll just give them $2.5 million and call it a day.' When a jury rules against a defendant, even if you are 100 percent certain that prevailing case law supports an appeal where you will win completely, you have to put up a bond for the amount of the damages. That requires you to tie up that amount on your corporate balance sheet until the appeal comes through. So procedurally, defendants tend to be driven to settle."

"Reform needs to occur there. If we have to post a bond if we lose, they should have to post a bond if they win. In this case, for example, if they wanted to pursue review by an en banc panel of the Federal Circuit, they should have to post a bond."

Re:Patent troll? (0, Flamebait)

retchdog (1319261) | about a year and a half ago | (#42712077)

the nigger in the woodpile [wikipedia.org] is the word `legitimate'. in short, the legitimate point of patents is to protect the investment required to produce actual innovations. however, patents are nowadays issued much more broadly than this. just because a patent is issued, does not make it legitimate.

a patent troll is someone who either 1) patents (or acquires the patent for) something already widespread, or uses a submarine patent [wikipedia.org] to accomplish the same, in order to extort $ or chill competition, or 2) patents a routine solution to a relatively trivial and routine subproblem which emerges while accomplishing the original goal, so as to set up landmines for competitors. both of these would be mitigated if the USPTO simply enforced their rules on originality, which they do not, either out of incompetence or ideology.

Re:Patent troll? (-1)

Anonymous Coward | about a year and a half ago | (#42712167)

Holy shit, I never thought I'd see that phrase in print. I was just musing about n-word phrases, because there was a NYT crossword clue a few weeks ago whose answer was "ding dong ditch". I had never heard that phrase, and I realized that I did not know any way to describe the phenomenon that wasn't prosaic ("knock and run") or horribly offensive ("nigger knocking"). Kudos to you for your boldness.

Re:Patent troll? (1, Insightful)

Anonymous Coward | about a year and a half ago | (#42712263)

Ummm, kudos? Seriously? He could've used another term. You're both asses.

Re:Patent troll? (1)

Anonymous Coward | about a year and a half ago | (#42712257)

Oh. I was ready to take offense, but you linked to Wikipedia, so clearly such offense would only be rooted in my own ignorance.

For your edification, the educated and/or politically correct prefer the term run silent, run deep patent.

Re:Patent troll? (1, Insightful)

Genda (560240) | about a year and a half ago | (#42712449)

Poor choice of phrase, even though it accurately connotes the situation, its so inflammatory that nobody can hear your comment, which is too bad, its a good comment. I'm a little torn by this issue, I understand the pain and anguish this language has inflicted, and that the black culture still experiences some PTSD from it and related language. That said, there is important, vital work, by people like Twain in his stories about life in slave era Missouri, that people need to understand and appreciate, and that truth plied with honest compassion and dignity invariably trumps well meaning dishonesty even when that dishonesty is easier or socially less expensive. Rewriting the works of Twain and for that matter sanitizing history, science and art for our children, so we don't have to address real problems or philosophically complex truths does no service to them or the future of our society. So I would honestly say that the parent post doesn't deserve a Flamebait rating, however, I would also say, in this era of social awareness, it behooves us all to choose our words with at least a modicum of consideration for their unintended impact.

As for the patent trolls. I want to flame them, and I don't mean over the internet. Thank you NewEgg, I've done business with you before and now I will do all my PC related business with you. You fight to keep the parasites and leaches from bleeding my world dry. This makes you heroic in my eyes, and I support your work to make this form of commerce safe from the greedy and conniving. We all suffer at the soulless ministrations of these sycophants and their legal minions. Its time to take back what it rightfully and justly ours, to stop this runaway train from sailing into the abyss, and put IP protection back to a place that serves the future rather than cannibalizing it.

Fugitive in the woodpile (-1, Offtopic)

tepples (727027) | about a year and a half ago | (#42712513)

Poor choice of phrase, even though it accurately connotes the situation

For the record, what more polite term would you suggest to replace "person of subsaharan African descent in the woodpile"? Would "fugitive in the woodpile" work as well?

Re:Fugitive in the woodpile (2)

suutar (1860506) | about a year and a half ago | (#42712687)

"alligator in the swamp" is a phrase I've heard used for a similar situation.

Re:Fugitive in the woodpile (-1)

Anonymous Coward | about a year and a half ago | (#42712715)

Nigger in a pile of fags, duh.

Re:Patent troll? (0)

Anonymous Coward | about a year and a half ago | (#42712605)

offenisve to some - the guys on the corner here say it more than 10 times an hour, every day.. whats up with that?

Re:Patent troll? (4, Informative)

Whatsisname (891214) | about a year and a half ago | (#42712789)

The point of patents is not to protect anyone's investments. The trade-off of patents is disclosure. Prior to patents, trades often kept their methods secret, and if any trades died out, so did their technologies. Patents were created to incentivize inventors to share the secrets of their invention, for the public good. A monopoly on the technology was the bargaining token to encourage them to spill the beans.

Patents systems do not care about investments, it only exists to make disclosure a more appealing option than secrecy.

Re:Patent troll? (5, Insightful)

Just Brew It! (636086) | about a year and a half ago | (#42712149)

RTFA. The patents were overly broad/obvious, and there was prior art. Other companies who were approached by Soverain settled because they didn't want to get drawn into a lengthy and expensive legal battle. Newegg stood their ground, and ultimately prevailed.

Yes, Soverain was a "legitimate patent holder" in the sense that they legitimately owned the patents in question. But the patents themselves were not legitimate (in the sense of embodying anything original or unique).

I suspect that one of the reasons Newegg stood their ground is that -- unlike most of the other companies mentioned in the article -- they are exclusively an online operation, and therefore had more at stake.

Re:Patent troll? (2)

Runaway1956 (1322357) | about a year and a half ago | (#42712515)

I suspect that Newegg stood their ground because of their policy:

"For Newegg's chief legal officer Lee Cheng, it's a huge validation of the strategy the company decided to pursue back in 2007: not to settle with patent trolls. Ever."

Or, that policy could be so much bluster, and Newegg has actually settled with other patent trolls, quietly, behind the scenes.

Re:Patent troll? (1)

Just Brew It! (636086) | about a year and a half ago | (#42712685)

Given that the original suit was also filed in '07, maybe the policy was actually a reaction to the situation Soverain created, rather than a standing policy that they applied to the situation when it arose?

Re:Patent troll? (3, Insightful)

Runaway1956 (1322357) | about a year and a half ago | (#42712771)

I really have little idea - I've allowed for that possibility. But, if you've read TFA, then Mr. Cheng indicates otherwise. You can take your pick - believe Mr. Cheng's statements, or assume that Newegg has settled quietly with other patent trolls. It's possible that Newegg simply believed this case was winnable, while other cases may not have been.

What I am very sure of, is that the patent office needs more funds, more personnel, and orders from congress to weed out all these submarine patents, get rid of obvious patents, and search for prior art patents. Before any of that, though, the patent system itself needs to be overhauled.

It's been noted often enough here, that companies don't WANT an "inventor" to be aware of prior art, etc. They WANT their "inventors" to submit ideas, so that the company can file the patent. They get it filed, if it gets approved, then it's valid on it's face. Better to wait for a civil suit, to have it's validity tested, when everyone can innocently claim, "Well, we did this all independently, and we had no idea that anyone else may have done it. It wasn't all that obvious, from where we were sitting, at the time!" Those, and similar arguments, might convince a jury, or they may not.

Basically, it's all a huge gamble, largely determined by the size of your legal staff - and it's so very wrong.

Re:Patent troll? (2)

Runaway1956 (1322357) | about a year and a half ago | (#42712455)

At a very rough guess, for every valid patent awarded in the past thirty years, there are about five or six bullshit, worthless patents that never should have been awarded, based on prior art or obviousness.

Using those bullshit patents to shake down legitimate businesses makes one a patent troll.

It's really pretty simple. In some cases an individual patent's merits may not be simple at all - but the distinction between a patent troll and other patent holders is really very simple. Patent trolls, for the most part, have never contributed one damned thing to the technology world, to the arts, or to the crafts. The give absolutely NOTHING to society - they are parasites.

From TFA "And now, nobody has to pay Soverain jack squat for these patents."

I love it. I hope the sumbitches all choke to death on their false indignation!

Re:Patent troll? (0)

Anonymous Coward | about a year and a half ago | (#42712573)

Stop being so retarded and learn to read. He bought the patents, he didn't invent shit. He's a waste of life that couldn't create anything if his life depended on it. People like you who refuse to even try and understand are almost as bad.

Get the fuck off my planet

Re:That was too good... (-1)

Anonymous Coward | about a year and a half ago | (#42712029)

I bet the Jews did this.

Re:That was too good... (0, Troll)

Anonymous Coward | about a year and a half ago | (#42712047)

Is there a mod -2? Please, let there be a mod -2.

Re:That was too good... (2)

omfgnosis (963606) | about a year and a half ago | (#42712137)

let there %= -2;

Just in the USA right? (0, Informative)

Anonymous Coward | about a year and a half ago | (#42711973)

Like when Samsung beat Apple in the UK, but then Apple won on the same issues in the US. Patents are granted once and valid everywhere, but must be defeated on country at a time. NewEgg saved their own country. Now someone needs to win in every nation in the rest of the world.

I knew that kid! (4, Funny)

140Mandak262Jamuna (970587) | about a year and a half ago | (#42712007)

Long time ago, in a country fair, I saw a kid playing Whack-a-mole. That boy took the large cushioned mallet and bopped the head of the first mole that popped up. Then immediately he dropped the mallet started yelling an running around "I won! I won!! I whacked the mole!!!". It is nice to hear that boy did well, is all growned up now, becoming chief lawyer for some on line retailer. Good boy! Now go whack another mole.

Re:I knew that kid! (5, Insightful)

Areyoukiddingme (1289470) | about a year and a half ago | (#42712127)

The sarcasm was fun, but if you RTFA, you'll discover this isn't the lone mole. He's been at it for six years, and this is at least the 5th mole. So no, he hasn't Won the Game, but he's a lot farther in than one mole and he still has his mallet in his hand. More to the point, he has NewEgg executives and NewEgg's money behind him, so it's a pretty large and well-funded mallet.

NewEgg's executives should be inordinately pleased with themselves. Their strategy just paid for itself. All the money they sank into this defense will be paid back and then some by not having to pay a tax on every transaction to these stuffed shirts for the next 10 years. (Or 30 years, if they had filed an amended patent that magically re-ups the expiration term.) (Or 50 years. Or forever.)

Meanwhile, there's a laundry list of other retailers with an online presence who either knuckled under or fought just a little bit, then knuckled under. Ask yourself why. The answer starts with "cr-" and rhythms with brony....

Re:I knew that kid! (3, Insightful)

140Mandak262Jamuna (970587) | about a year and a half ago | (#42712181)

yeah, I know, I know. I felt a twinge of regret when I hit the submit button. I was being grossly unfair. Sorry about that.

Re:I knew that kid! (1)

Runaway1956 (1322357) | about a year and a half ago | (#42712539)

If there were any justice in the justice system, the patent trolls would be paying Newegg. Not just paying for Newegg's legal fees, etc, but actually paying Newegg.

Those bogus patents pulled from their "portfolio", and given to Newegg, along with a few dozen more patents. They might actually own a valid patent that could prove valuable to Newegg.

It is okay to use a shopping cart so long as (5, Funny)

GoodNewsJimDotCom (2244874) | about a year and a half ago | (#42712017)

You gotta make sure it takes at least 2 clicks to check out, or you're done for. I still wonder why someone doesn't patent the 2 click, 3 click... n click patent so for anyone to do business without tribute it takes 1000 clicks!

Re:It is okay to use a shopping cart so long as (0)

Anonymous Coward | about a year and a half ago | (#42712157)

You gotta make sure it takes at least 2 clicks to check out,

AT LEAST TWO. three or four is no big deal. amazon's one-click shit is scary -- and some functions @ amazon require it enabled.

solution: don't use amazon. hello, mr barnes and mr noble.

Re:It is okay to use a shopping cart so long as (0)

Anonymous Coward | about a year and a half ago | (#42712271)

Maybe it's changed, but B&N prices were much worse than Amazon's back in the early days of the web, even with a membership -- and I really despise the practice of national chains with that type of "no point except to bilk people of more money" memberships. If I'm going to pay too excess money for books, I'd rather shop independent stores.

Thanks, NewEgg (5, Interesting)

sunderland56 (621843) | about a year and a half ago | (#42712027)

If I wasn't already a loyal customer, I sure would become one now.

Re:Thanks, NewEgg (5, Funny)

anagama (611277) | about a year and a half ago | (#42712225)

I think I'll use this as an excuse to buy something I don't need, but would like to have.

Re:Thanks, NewEgg (0)

Anonymous Coward | about a year and a half ago | (#42712293)

Good a time as any to rebuild my desktop, I'd say...

Re:Thanks, NewEgg (-1)

Anonymous Coward | about a year and a half ago | (#42712631)

Me, I'm just gunna clear out my Desktop Crap folder. Been done 6 whole months since I last did'er, and by fuck is she right some messy. Thur be lots a me installers, and them photographs I never filed? Not to mention all them attachments I just plum threw on the ol desktop to save five seconds. Guess it just goes to show, y'don't get no crops unless you plow y'r field. (I'd say somethin bout my wife, but that'd just git her fumin at me).

Like I says, though, just a hour or two clearin' out my Desktop Crap folder. Not that I don appreciate what NewEgg done did, but shucks, I got all the computer bits and parts I need, last thing I really needed was a USB mouse? An that I got fer christmas from Peggy-Sue. Anyway, I doubt those high-flautin' UPS folk wouldn't come my way anyhow.

Re:Thanks, NewEgg (5, Informative)

Just Brew It! (636086) | about a year and a half ago | (#42712341)

What is this strange phrase you use, "don't need"? There's always something any self-respecting geek needs from Newegg!

Re:Thanks, NewEgg (0)

Anonymous Coward | about a year and a half ago | (#42712705)

What's strange is your conflation of want and need.

Re:Thanks, NewEgg (1)

Just Brew It! (636086) | about a year and a half ago | (#42712713)

Have you checked the settings on your humor detection meter lately?

Re:Thanks, NewEgg (-1)

Anonymous Coward | about a year and a half ago | (#42712415)

no newegg is terrible. 15% restocking fee. No thanks.

Re:Thanks, NewEgg (0)

Anonymous Coward | about a year and a half ago | (#42712659)

no newegg is terrible. 15% restocking fee. No thanks.

Are you that asshole who used to keep 'buying' our cards from retailers, then sending them back so we had to resell them at a discount as 'refurbished' because we were never allowed to resell them as new after you'd had your sticky hands on them?

If so, I'm glad they at least make you pay for it now.

Re:Thanks, NewEgg (-1, Offtopic)

ithaiminh.vn (2825787) | about a year and a half ago | (#42712661)

me too http://ithaiminh.vn/ [ithaiminh.vn]

Re:Thanks, NewEgg (0)

Anonymous Coward | about a year and a half ago | (#42712757)

Just be careful about returning motherboards and them claiming you bent pins. Take a photo first......

Money well spent. (0)

Anonymous Coward | about a year and a half ago | (#42712033)

I'm glad all my money spent at newegg has gone towards a good cause. Plus I got new stuff.

Blast from the past (1)

Stirling Newberry (848268) | about a year and a half ago | (#42712071)

I worked on the Transact product at Open Market.

The Problem is Bad Patents, More Than Trolls (5, Insightful)

Bob9113 (14996) | about a year and a half ago | (#42712079)

Patent trolls often wield bad patents. There are also companies that make things that wield bad patents. Beware of associating the bad of our patent system only with trolls -- the problem runs deeper. If all trolls disappeared tomorrow, we would still have vast minefields of bad patents and enormous, destructive patent battles.

We have just invented the greatest tool since Gutenberg for the dissemination of information. An almost incomprehensibly powerful tool for decentralizing problem solving. At the same time, we have been radically increasing the breadth and power of patents, which inhibit the decentralization of problem solving. Patents have a good mission, but their method is a hinderance to the information revolution. That conflict is inherent in patents; it does not require a troll to cause harm.

Re:The Problem is Bad Patents, More Than Trolls (4, Insightful)

Eskarel (565631) | about a year and a half ago | (#42712213)

I think you're just using too narrow a definition of "patent troll". Patents are designed to foster innovation. They give an idea value so that people will take the risk of investing in that idea whatever the scale of the inventor. If all ideas are trivially copied once their details are known then either the ideas have no value so no one invests in them or the ideas get kept secret and we don't get to know about them and build on them. Good patents provide this functionality, they temporarily stifle competition in order to foster innovation.

Bad patents on the other hand merely stifle innovation. Patents can be bad for any number of reasons(the patent holder has no intention of seeking investment for them, the idea itself is trivial(a hard one since the whole idea of patents is that once someone shows you an idea it usually seems trivial), or the patent should not belong to the holder. Essentially these are patents with no upside for the community.

If you wield a bad patent you're a patent troll be you some little company with no assets or the latest do no wrong tech firm, if you use a good patent you're not.

This still leaves us with working out how the hell to determine things like triviality and prior art, but at least we don't have to try and determine intent. Patents, like copyrights and all sorts of other intellectual property, are a necessary evil, they always have downsides, but they're supposed to have upsides.When they don't, the holder is a troll.

Re:The Problem is Bad Patents, More Than Trolls (0)

Anonymous Coward | about a year and a half ago | (#42712357)

Good patents provide this functionality, they temporarily stifle competition in order to foster innovation.

As well as infringe upon property rights and create government-enforced monopolies. That automatically makes them evil. We need to get rid of them (along with copyright). Freedom is far, far more important than innovation, and if you can't find a workable business model then don't whine when you go under. Got an objection? I think I know what it is, so let me direct you back to... "Freedom is far, far more important than innovation."

Re:The Problem is Bad Patents, More Than Trolls (4, Insightful)

Drishmung (458368) | about a year and a half ago | (#42712459)

...

If you wield a bad patent you're a patent troll be you some little company with no assets or the latest do no wrong tech firm, if you use a good patent you're not.

...

I think the term Patent Troll is more exactly defined than that, and divorced from the subjective judgment of "Good" or "Bad" patent. A Patent Troll is a non-practicing entity (NPE). The sole aim of a patent is to encourage the creation of new inventions. The mechanism to do that involves remuneration, but that's not the aim. A NPE doesn't produce anything, so it doesn't encourage the creation of new inventions. It sure encourages the creation of new patents, but is doesn't encourage the creation of new 'things'.

You might argue over the goodness/badness of Amazon's 1-click patent, but Amazon at least provides a useful service using the process for which they hold a patent and isn't, in my opinion, a patent troll.

Patents, like copyrights and all sorts of other intellectual property, are a necessary evil, they always have downsides, but they're supposed to have upsides.When they don't, the holder is a troll.

I disagree with you only over the term 'troll'. Otherwise, you've got to the nub. Patents and copyright exist only to benefit society. "We, the people" created them solely to benefit us. If the economic burden of the current copyright and patent system outweighs its economic benefit—which numerous studies have indicated is so—we need to uncreate them

That may seem naive, but OTOH, simply nuking software and business patents would go a huge way to fixing this, and that does seem to be the worldwide trend.

I propose new terminology (3, Interesting)

wbr1 (2538558) | about a year and a half ago | (#42712683)

Non producing entity + welding patent = patent troll
producing entity + wielding bad patents = patent ogre

Re:The Problem is Bad Patents, More Than Trolls (1)

Anonymous Coward | about a year and a half ago | (#42712779)

patents are designed to foster innovation

Yes, they foster innovation in the regions where patents are not enforced. All major human advancements would be butchered dead in their tracks if there were patents to fight over. Just check why Hollywood was created where it was. If you want to innovate these days go to some place like China...

Re:The Problem is Bad Patents, More Than Trolls (4, Insightful)

demonlapin (527802) | about a year and a half ago | (#42712267)

We have just invented the greatest tool since Gutenberg for the dissemination of information. An almost incomprehensibly powerful tool for decentralizing problem solving.

And the reason it has worked is that we have not let governments kill it. Regardless of how you may feel about politics in every other area of life, please leave the Internet the fuck out of it. The Internet is the greatest accomplishment of humankind to date IMHO, and has transformed my life in ways I could never have imagined. I'm about the same age as the personal computer - born in the mid 70s - and I never even imagined any of this would be possible even when I was 12 and got my first modem.

Service Unavailable (1)

Frosty Piss (770223) | about a year and a half ago | (#42712335)

And speaking of Soverain Software [soverain.com] , their web page is responding "Service Unavailable" at the moment... Lol, and so on...

Re:The Problem is Bad Patents, More Than Trolls (4, Insightful)

steelfood (895457) | about a year and a half ago | (#42712469)

I think your scope is a bit too narrow. All "intellectual property" has this effect. All of it needs reform (sans trademark, which is more for consumer protection than a piece of "property").

Re:The Problem is Bad Patents, More Than Trolls (2)

RyuuzakiTetsuya (195424) | about a year and a half ago | (#42712527)

Part of the problem is that patents are too long. In the 18th century having patents last as long as they do made sense as the pace of innovation wasn't that quick. Not like it is today.

I think we need a patent system, last thing I want to do is come up with some clever algorithm that solves a novel problem and only to be undercut by someone with far more resources and market presence that didn't have to do the work of actually implementing or even thinking up that idea. On the other hand I don't want to be cut out of the market because I infringed on someone else's bullshit patent.

Re:The Problem is Bad Patents, More Than Trolls (0)

Anonymous Coward | about a year and a half ago | (#42712653)

Fortunately it seems that in the last few years we've cut back a lot of that patent overreach. For instance, the decision in this appeal cites 2008's Muniauction case. Until this case, a patent that literally did nothing but add "on the web" to existing art was a valid patent:

During cross examination, Muniauction’s expert conceded that two of the claims were the same as the prior art Parity system, except for the use of a web browser to access the auction.

So in other words... (0)

Anonymous Coward | about a year and a half ago | (#42712117)

Newegg just spent a lot of money fighting a lawsuit which has now established a precedent that will make it far cheaper for the other targets of this patent troll (like Nordstrom's, Macy's, Home Depot, Radioshack, Kohl's, ... -- all companies larger than Newegg) to defend themselves. I hope Newegg at least managed to save themselves some money by doing this, otherwise they just spent a bunch of money helping their competitors (as well as other unrelated retail businesses).

Re:So in other words... (1)

fuzzyfuzzyfungus (1223518) | about a year and a half ago | (#42712165)

Thankfully, the competitors you mention are all dubiously competent, so this is unlikely to be Newegg's death-by-good-intentions.

Re:So in other words... (0)

Anonymous Coward | about a year and a half ago | (#42712185)

I wasn't worried about it being Newegg's death or anything, just lamenting that they probably ended up spending a bunch of money that will only help their competitors and not themselves. Another shitty aspect of the American legal system.

Re:So in other words... (3, Insightful)

Just Brew It! (636086) | about a year and a half ago | (#42712361)

Those other companies may be larger in total sales, but they have a smaller online presence; Newegg is currently the 13th largest online retailer. Probably explains why the other companies settled rather than go to trial; online sales likely weren't enough of a priority to them.

The United States (0, Flamebait)

Anonymous Coward | about a year and a half ago | (#42712169)

A nation of rent-seeking lunatics.

From TFA: (5, Insightful)

Areyoukiddingme (1289470) | about a year and a half ago | (#42712177)

Screw them. Seriously, screw them. You can quote me on that.

In Internet vernacular: QFT—Quoted For Truth.

Thank you Mr. Lee Cheng for saying it and saying it with attitude. I'm afraid it will probably cost you in the future when judges read about it and are miffed by your attitude, but you'll probably only be seeing the same six judges for the next 20 years anyway, and they already don't like you on principle, so... full speed ahead and damn the torpedoes.

That's one useless little rent-seeker squashed. Only 1000 more to go...
(Mr Lee Cheng of NewEgg has some serious job security.)

Chinese Culture FTW (-1)

Anonymous Coward | about a year and a half ago | (#42712355)

Stand up to the American (Jewish) bullies/lawyers like the boxer rebellion. Time to tell them go to hell with their Talmud.

As a Chinese-American (1)

ub3r n3u7r4l1st (1388939) | about a year and a half ago | (#42712791)

I am proud of their accomplishments against the status quo of the legal system.

Special Kudos to:
Fred Chang (founder, global CEO)
Lee Cheng (Chief Legal Officer)
James Wu (Chief Technology Officer)

Re:From TFA: (3, Informative)

Just Brew It! (636086) | about a year and a half ago | (#42712393)

I don't think the judges will give a flying fuck about the colorful language. It was in an interview for a tech news site, not something he said under oath in a courtroom.

Re:From TFA: (3, Informative)

jonadab (583620) | about a year and a half ago | (#42712717)

The thing is, this ruling in Newegg's favor didn't just invalidate Soverain's $2.5 million case against Newegg. By going for the validity jugular and winning, they managed to invalidate Soverain's patents and cost them the hundreds of thousands in settlements they otherwise would have had from all the big retailers who wouldn't have taken it to court. The defendants in all the other pending cases can now point to this verdict. (In layman's terms, the argument goes along the lines of "Soverain is suing us because they say we violated their shopping cart patents, but now that those have been ruled invalid, nothing meaningful can be accomplished by allowing this suit to continue. By not withdrawing it, they are now just wasting the court's time.")

In other words, Newegg killed Soverain's entire business plan with fire.

They aren't going to have to do that a thousand times. If they can manage it two or three times, and get nice big public stories about it featured in the news, future patent trolls will conveniently forget to sue Newegg in favor of going after everyone else and collecting settlements that don't endanger their existence.

Prior Art (4, Insightful)

Gary Perkins (1518751) | about a year and a half ago | (#42712191)

According to the article, the main prior art they found was a Compuserv checkout. I wonder if they were prepared to bring up the various bulletin board commerce solutions...surely a few of those would qualify as well. It's absurd that a company would think they could sue every company and license for a technology that's existed since at least the early nineties, but wasn't patented until the web was well under way, and had NO ties to the original software.

Amazon paid 40 million$ to Soverain (3, Informative)

Frankie70 (803801) | about a year and a half ago | (#42712235)

Ask Amazon why they supported a patent troll (1)

Anonymous Coward | about a year and a half ago | (#42712531)

And also ask them whether they will support the next one.

Bezos should be ripping his legal team a new one after Newegg's victory.. Instead his lawyers probably earned bonuses for handing $40m to a patent troll so they could get off early to focus on their golf swing.

Alcatel-Lucent (1)

Anonymous Coward | about a year and a half ago | (#42712275)

TFA also calls Alcatel-Lucent a troll.

The company that owns Bell Labs a patent troll?

Seems odd....

Re:Alcatel-Lucent (1)

mcohrs (1044844) | about a year and a half ago | (#42712399)

TFA also calls Alcatel-Lucent a troll.

The company that owns Bell Labs a patent troll?

Seems odd....

they are the descendants of a great intellectual power house, unfortunately they seem to exist solely on the past excretions of those endeavors - or have they actually come up with uswful things like the transistor?

Re:Alcatel-Lucent (2)

Just Brew It! (636086) | about a year and a half ago | (#42712487)

As they say in financial services ads, "past performance is not indicative of future results". While they were once a powerhouse of technical innovation, Bell Labs' day in the sun has come and gone. They've been in decline for many years, and the bursting of the dot-com bubble (in which Lucent was heavily invested) pretty much finished them off.

I do agree, calling them a "patent troll" is a bit harsh though; at least they were great in the past, and produced (and continue to produce) actual products. But as far as current operations go, the best thing you can say about them is probably "Hey, they out-lasted Nortel!"

Re:Alcatel-Lucent (0)

Anonymous Coward | about a year and a half ago | (#42712623)

Not that odd... NE won a verdict against them. An analogy:
I've been a law-abiding citizen my entire life thus far. If I robbed a bank tomorrow, what would I be?

Re:Alcatel-Lucent (2)

jonadab (583620) | about a year and a half ago | (#42712785)

Alcatel-Lucent is a real company that provides real services. Thus they are not a patent troll under the most narrow definition (a company that exists for no other purpose than to buy up stupid patents and file lawsuits based on them).

As for Bell Labs, that name is historically important, but "owning Bell Labs" at this point basically just means having bought up some leftover intellectual property that is no longer commercially viable. (The fact that the current owner is doing new R&D under the Bell Labs name has basically nothing to do with the old AT&T Bell Labs intellectual property portfolio, which has been effectively vacuous since the BSD verdict in the early nineties.)

Can we.. (1)

Anonymous Coward | about a year and a half ago | (#42712379)

Can we please just all come together as a nation/earth and jettison patent trolls into outerspace?

How is he a patent troll? (0, Flamebait)

Anonymous Coward | about a year and a half ago | (#42712383)

Lets face facts here. If you own a patent and someone infringes on it then you by all rights SHOULD sue them. If this guy legtimately owned a patent that was misused without his permission then he has every right to protect his patent.

But people on the net love to yell patent troll anymore because its get them attention to their website because guys flood in to mindlessly start yelling about trolls when they have no legal knowledge and hell most of them dont even read the story. They want to bitch about what everyone else is bitching about because its a bandwagon mentality.

Anymore according to the internet you are automatically a patent troll if you file suit for any reason against anyone over a patent issue. It doesnt matter how right or wrong you are, if you file a suit your automatically labeled a patent troll.

Re:How is he a patent troll? (0)

Anonymous Coward | about a year and a half ago | (#42712463)

patent filed in 94, takes action in 2012-2013

sorry, fail enforce it or loose it

Re:How is he a patent troll? (2)

Just Brew It! (636086) | about a year and a half ago | (#42712641)

Patents weren't granted until '98/'99, and Newegg was sued in '07. It's still an 8-year gap, but hey... get your facts straight.

Re:How is he a patent troll? (3, Insightful)

Just Brew It! (636086) | about a year and a half ago | (#42712611)

Under the current system, a lot of people own patents on things they shouldn't have been allowed to patent in the first place. That's the crux of the issue. I've got no problem with people enforcing patents on things that are truly innovative. But too many patents these days are for concepts which already existed prior to the filing of the patent and/or are clearly obvious.

Re:How is he a patent troll? (1)

Cwix (1671282) | about a year and a half ago | (#42712645)

Ahh, there are always assholes who defend trolls.
Go read the article, it was clearly trollish

Patent trolls? (0)

freeasinrealale (928218) | about a year and a half ago | (#42712385)

oh for a moment I thought they wiped out slashdot trolls...

Re:Patent trolls? (1)

Anonymous Coward | about a year and a half ago | (#42712761)

No, you misspelled that, we're patient trolls.

What Now For Amazon and the Others? (3, Interesting)

Frosty Piss (770223) | about a year and a half ago | (#42712391)

Soverain had already picked a fight with the biggest kid on the playground and won. The first company it sued was Amazon, and Soverain scored a $40 million settlement from the giant retailer back in 2005. The Gap also settled for an undisclosed sum. That was back when defendants were afraid of RIM-sized damage payouts, before eBay v. MercExchange and subsequent Supreme Court decisions started to put some limits on what do-nothing patent holders could win.

So what happens now to all that loot that these companies paid out?

As far as I'm concerned I hope Amazon can't get any back, what with their own bullshit bag of silly patents...

Re:What Now For Amazon and the Others? (4, Informative)

nomadic (141991) | about a year and a half ago | (#42712699)

They're out of luck; once you settle you're done, you can't get the money back unless you can show some sort of fraud in the settlement itself. It doesn't matter what happened with the underlying claims later on, the whole point of settlement is to avoid risking an even worse outcome.

newegg is crap (0)

Anonymous Coward | about a year and a half ago | (#42712395)

I refuse to buy from newegg, 15% restocking fee? No thanks.

Amazon has cheaper prices AND a better return policy.

Re:newegg is crap (2)

Rhys (96510) | about a year and a half ago | (#42712495)

And Amazon has a comment system filled with vastly more morons, and the search and description of parts is horrible compared to newegg. Maybe worth it if you're buying something like a laptop, but if you're buying parts... newegg all the way. With the possible exceptoin of cases, because they are often so bloody heavy and expensive to ship, it can be cheaper to pick them up from the local computer shops instead -- assuming you have a good one.

I get that 15% restocking is annoying (like, when Asus tech support lied about their motherboard being VT-D capable, so I bought one and then ta-da it isn't! Bought an intel like I should have and was just going to craigslist 50% writeoff the other until it ended up being a new PC for the wife instead). That said in 8 years of buys from Newegg this is the first time -ever- I've thought about returning a part, and I've bought plenty from them -- both for myself and proxy via friends who also buy parts for new systems there.

Also, they aren't a patent troll (Amazon sure is) and didn't cave in to the patent troll (Amazon did). That's enough reason to buy from them by itself.

Re:newegg is crap (2)

Just Brew It! (636086) | about a year and a half ago | (#42712565)

Their product listings are generally detailed and accurate enough that the restocking fee is largely irrelevant. As long as you do your homework, you will rarely (if ever) need to return anything for a refund. Over the past decade, between home and work, I've probably ordered upwards of $50K worth of computer hardware from them, and I have never paid a restocking fee.

I'm going to go... (1)

zoid.com (311775) | about a year and a half ago | (#42712447)

I'm going to go right now and buy something from Newegg.. Not sure what but I'm going to buy something.

Re:I'm going to go... (1)

WhatAreYouDoingHere (2458602) | about a year and a half ago | (#42712749)

Funny thing is, I just finished ordering some cables from Newegg before visiting slashdot tonight...

A game where winner still pays the price (3, Insightful)

CuteSteveJobs (1343851) | about a year and a half ago | (#42712481)

> "the inspiring story of Newegg vs the patent troll. Perhaps the system does work after all."

Unfortunately this doesn't take into accounts the costs. Newegg was lucky that they had an in-house lawyer and the original owner who was prepared to make a stand. This is rare: Conventional wisdom is to hire outside lawyers - patent specialists and all. Lawyers don't come cheap, so Patent troll victims end up owing their lawyers millions of dollars EVEN IF THEY WIN. Under the American court system usually the loser does not have to pay the winners costs, and even in countries where they do, the loser only pays a fraction of the winner's costs costs. The article also doesn't consider the incredible waste of employee time responding to a suit where they could be doing something profitable instead. It also doesn't consider the stress on the employees and the owners. No one will buy a business threatened with a patent lawsuit. Business development grinds to a halt. In theory judges are supposed to dismiss law suits without merit, but they don't - because they don't give a shit about the costs and it gives them something to do.

That the original judge fucked up does not surprise me. Forget what you see on TV about just and fair judges: In patent troll counties like the Eastern District of Texas the judges are blatantly pro-plaintiff. If they were not all the money flowing into their district would dry up, the judges and legal fraternity would be looking for a job somewhere else. The system has not worked. Newegg may have won, but the suit would have still cost them a fortune. This is a rare outcome and usually costs the trolls nothing who shrug and move on to their next victim.

I suggest a new strategy: but the judges of the Eastern District of Texas and other patent troll counties under a microscope and petition the government to remove judges who are playing sides or unfit or incompetent to serve. Did you notice the article doesn't name the original judge? Awesome job. Imagine being able to fuck up like that but everyone is so in awe of your power no one will name you. In any other profession people would be laughing at them over the water cooler.

Re:A game where winner still pays the price (5, Informative)

nomadic (141991) | about a year and a half ago | (#42712569)

"Newegg was lucky that they had an in-house lawyer and the original owner who was prepared to make a stand. This is rare: Conventional wisdom is to hire outside lawyers - patent specialists and all. "

They did hire an outside law firm, Weil Gotshal, which is one of the top firms in the country.

In theory judges are supposed to dismiss law suits without merit, but they don't - because they don't give a shit about the costs and it gives them something to do. . . That the original judge fucked up does not surprise me. Forget what you see on TV about just and fair judges: In patent troll counties like the Eastern District of Texas the judges are blatantly pro-plaintiff. If they were not all the money flowing into their district would dry up, the judges and legal fraternity would be looking for a job somewhere else.

Absolutely wrong, judges love dismissing cases, particularly complex cases like patent actions, because they don't want their docket to get overloaded. Judges make incorrect holdings of fact and law all the time; that's the whole point behind appeal courts. It's usually not out of malice or incompetence, despite perennial slashdot anger at what is perceived as to the contrary. Speaking as someone who used to litigate in federal courts, the majority of judges just don't care on a personal level about the parties before them, they just want to get the cases moved through their court. The only personal investment most judges have in the cases is they don't want them to be reversed because they consider it as a hit on their reputation.

hmm (2)

nomadic (141991) | about a year and a half ago | (#42712535)

The funny thing is CDW, Zappos, Systemax, etc. are still on the hook for the money they settled for. Bet their trial lawyers are kicking themselves right now.

This is the same stupidity, in another form (3, Interesting)

Jack9 (11421) | about a year and a half ago | (#42712663)

> Perhaps the system does work after all.

Winning your 1 case, does not mean the system is working as intended, regardless of the outcome.

This system works. (0)

Anonymous Coward | about a year and a half ago | (#42712709)

For lawyers.

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