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  (Source: Sodahead)
Corporate rep. for "patent troll" Alcatel-Lucent couldn't even name the technology or patents it was suing over

Late last week in the Federal Circuit Court of Appeals,, Inc. -- a top independent computer parts and electronics e-tailer -- dealt the finishing blow in a critical case against a "corporate troll" who most other e-tailers were too timid to fight in court.  Joining Newegg in the fight was only one other feisty e-tailer --, Inc. (OSTK).

I. A Couple Good E-Tailers

France's Alcatel-Lucent SA (EPA:ALU) holds over 29,000 patents, many of which were acquired when luminary U.S. research institution Bell Labs went belly up in 2006.  Alcatel-Lucent produces little in the way of actual product; instead it boasts of "providing solutions" (patent licensing) to companies.  And when companies refuse to pay it (royalties) for its proposed solution, it sues them.

In other words, this "solutions provider" is termed by critics as a "patent troll".

But the company's elite legal team came up against a brick wall when they faced the stubborn duo of Newegg and Overstock in federal court of appeals over a lawsuit regarding U.S. Patent No. 5,649,131 and two other patents

The e-tailer pair was seemingly was fighting a losing battle., Inc.,, Inc. (AMZN), Sears Holding Corp. (SLHD) (Sears and Kmart), QVC, Inc., and Lands' End Inc. had all settled over the '131 patent which was titled "Communication Protocol" and whose contents were nearly as ambiguous, describing "object identifiers".  The other patents were similarly ambiguous, but were considered less valuable.

The passive majority had paid around $10M USD in protection money to Alcatel-Lucent.  Such payments in and of themselves aren't catastrophic for a company with billions in revenue.  But Newegg Chief Legal Officer Lee Cheng vowed long ago never to settle with trolls, seeing that by itself one leech might be harmless, but once blood was in the water, a company could easily die a slow death of a thousand blood suckers.

So Newegg and its partner Overstock chose a patent gun battle when all the other e-tailers caved.  And in a typically plaintiff-friendly East Texas court, a jury found Newegg innocent of infringement and invalidated the '131 patent.  

II. The Appeal

The death of the '131 patent was particularly stinging -- now Alcatel-Lucent stood to lose hundreds of millions in licensing fees.  So it doubled down looking to revive the patent.  It dropped its other two claims, focusing on the '131 patent and enlisting a new high power legal firm -- Wilmer Hale whoses lawyer Mark Fleming presented an appeal to a three-judge panel on May 10, asking them to invalidate the invalidation.

Then Newegg and Overstock's lawyer Ed Reines had his say.  Mr. Reines had distinguished himself previously when he led Newegg to a defiant Jan. 2013 victory over "patent troll" Soverain whose "shopping cart patent" had long terrorized other e-tailers.

[Image Source: Minding the Media]

Whille some appeals cases take months or years to wrap up, this one was over in just three days.  And the judges ruled unanimously in Newegg and Overstock's favor without comment.

Mr. Cheng, in an interview with ArsTechnica, gives some insight as to why the end came so fast, commenting, "Successful defendants have their litigation managed by people who care.  For me, it's easy. I believe in Newegg, I care about Newegg. Alcatel Lucent, meanwhile, they drag out some random VP—who happens to be a decorated Navy veteran, who happens to be handsome and has a beautiful wife and kids—but the guy didn't know what patents were being asserted. What a joke."

Apparently, when asked to name the patents and technology in question during cross-examination during the appeals hearing, Alcatel-Lucent's corporate representative was unable to name the patents or technology that his company was suing over.

III. Newegg -- Trolling is "Sad" and "Offensive"

This isn't Alcatel-Lucent's only major loss of late.  The company in 2007 saw a $1.5B USD verdict against Microsoft Corp. (MSFT) over MP3 patents unravel in the appeals phase.

Bell Labs
Newegg calls the bastardization of Bell Labs' remains a tragedy. [Image Source:]

Mr. Cheng, who once called patent troll lawsuits "bullshit", makes it clear he has tremendous respect for Bell Labs and its Legacy, but precious little for the firm that's (in his opinion) bastardizing its remains, commenting:

These are the Bell Labs patents.  It is truly, truly tragic how the mighty have fallen. This company was once the pride of American innovation, a company that has roots going back to Alexander Graham Bell. And it ended up selling off its patents for a few bucks. What Alcatel-Lucent did was really offensive.

He concludes, "The general counsels of publicly traded companies have started to wake up—we don't feed trolls."

Source: ArsTechnica

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Newegg is awesome
By wasteoid on 5/17/2013 10:46:13 AM , Rating: 5
Newegg is already a great company with their fast service and great prices, but when they fight trolls like this, makes me want to buy more from Newegg to support them even more.

RE: Newegg is awesome
By Argon18 on 5/17/2013 12:32:47 PM , Rating: 5
Took the words right out of my mouth. Bravo NewEgg!

RE: Newegg is awesome
By Motoman on 5/17/2013 1:40:17 PM , Rating: 2
[stands and salutes]

RE: Newegg is awesome
By talikarni on 5/17/2013 2:23:10 PM , Rating: 2
+1 more...

I have always loved Newegg and will continue to support them with my business and personal purchases

RE: Newegg is awesome
By inperfectdarkness on 5/17/2013 3:05:17 PM , Rating: 2
Yeah, this is at least the 2nd time this has happened. I try to buy from newegg whenever I can. I just wish they had a better MSI offering.

RE: Newegg is awesome
By Darksurf on 5/17/2013 9:33:31 PM , Rating: 1


RE: Newegg is awesome
By GulWestfale on 5/17/2013 10:27:49 PM , Rating: 2
now i'm waiting for apple to sue them, and lose.

and then i woke up from my beautiful dream.

RE: Newegg is awesome
By Donkey2008 on 5/18/2013 2:03:21 PM , Rating: 3

I use Newegg for almost everything and they are one of the best retailers in the world. FACT.

RE: Newegg is awesome
By Norseman4 on 5/19/2013 9:58:35 PM , Rating: 2
There is nothing about the 'Egg that I don't like: except maybe for 'Geeks' selling non-geek items like jewelry and watches.

If what I'm looking for, in a geeky, techno, world is on the 'Egg, I will get it from there, with little hesitation.

I'm glad that this story only strengthens my approval to the company.

RE: Newegg is awesome
By WJames on 5/20/2013 9:24:12 AM , Rating: 2
Outstanding! After reading this article, I went to Newegg and placed an order. I will gladly support companies willing to fight patent trolls!

More Research Please...
By HammerZ on 5/17/2013 4:56:54 PM , Rating: 5

Alcatel-Lucent produces little in the way of actual product; instead it boasts of "providing solutions" (patent licensing) to companies.

You should do research for your own article. ALU has an extensive list of actual product. :)

For this case, way to go Newegg!

RE: More Research Please...
By Guspaz on 5/17/2013 5:30:55 PM , Rating: 2
Bell Canada's entire broadband network is run on Alcatel-Lucent hardware, although the actual chips in that hardware are from Ikanos and others.

RE: More Research Please...
By Belegost on 5/19/2013 7:14:18 PM , Rating: 3
I agree, that is one of the most idiotic statements I have seen on this site, and I have seen a lot of them.

ALU is one of the top vendors for cellular base station equipment, used by major players such as ATT and DoCoMo, and that is just one area of their products.

I may agree that this particular suit was nonsense, but trying to paint ALU as a patent troll with no product is simply stupid.

RE: More Research Please...
By JNo on 5/20/2013 8:51:16 AM , Rating: 4
Jesus Mick, 5 seconds of research would have told you that you're the troll when it comes to misrepresenting what companies do.

With over €5 *billion* in revenues do you honestly think that Alcatel Lucent "produces little in the way of actual product; instead it boasts of "providing solutions" (patent licensing) to companies. And when companies refuse to pay it (royalties) for its proposed solution, it sues them."

You couldn't have been further from the truth.

At a high level what they did was wrong but nonetheless your comments, Mick, smack of ignorance and insult the vast majority of the employees there who are honest and hard working.

Let them have cake
By TheEinstein on 5/17/2013 10:22:50 AM , Rating: 2
Then tell the trolls the cake is a lie...

RE: Let them have cake
By Omega215D on 5/18/2013 1:31:09 AM , Rating: 2
Time to resurrect an old quote of mine from another Newegg related story:

Once you know, you Newegg. Once you troll, you get screwegg'd.

RE: Let them have cake
By Omega215D on 5/18/2013 1:32:28 AM , Rating: 2
hmm, too lazy to look for it but I think I said Newegg'd instead.

<3 Newegg
By lagomorpha on 5/18/2013 10:21:54 AM , Rating: 3
Newegg: slays patent trolls

Amazon: trolls with one-click shopping patent

I just wish Newegg would do a better job selling things other than electronics.

RE: <3 Newegg
By Norseman4 on 5/19/2013 10:04:12 PM , Rating: 2
Already responded, but:

Best news in a long time.
By Dug on 5/17/2013 2:49:01 PM , Rating: 3
I love to hear the trolls get slammed. Especially from a place like Newegg.

thank god
By BRB29 on 5/17/2013 10:33:07 AM , Rating: 2
Some judges have already stop these trolls the time of day. Maybe one day, obvious troll cases like these are thrown out before it's even heard.

First, that damn patent law needs to be fixed.

By anactoraaron on 5/17/2013 3:33:48 PM , Rating: 2
The e-tailer pair was seemingly was fighting a losing battle

...made my head hurt...

"Nowadays, security guys break the Mac every single day. Every single day, they come out with a total exploit, your machine can be taken over totally. I dare anybody to do that once a month on the Windows machine." -- Bill Gates

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