Newegg Legal Chief: "We don't Feed the Trolls"; Defeats Bell Lab Shell Comp.
May 17, 2013 10:11 AM
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, Newegg.com, 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 -- Overstock.com, Inc. (
I. A Couple Good E-Tailers
France's Alcatel-Lucent SA (
) 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. Zappos.com, Inc., Amazon.com, Inc. (
), Sears Holding Corp. (
) (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 --
presented an appeal to a three-judge panel on May 10, asking them to invalidate the invalidation.
Then Newegg and Overstock's lawyer
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
, 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. (
) over MP3 patents
unravel in the appeals phase
Newegg calls the bastardization of Bell Labs' remains a tragedy. [Image Source: Stokowski.org]
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."
"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)
While Other Retailers Settled, Newegg Crushes Shopping Cart Patent Troll on Appeal
January 28, 2013, 10:06 AM
Judge Posner, Senior Federal Justice, Repeats Plea for Patent Reform
October 2, 2012, 7:30 PM
IBM's Watson Ponders Whether to Fight Patent Trolls or Join Them
December 9, 2011, 12:32 PM
Kodak Ekes Victory in $2B+ Patent War With Apple, RIM, Samsung, et al.
March 28, 2011, 11:07 AM
U.S. Judge Reverses $1.5 Billion Alcatel-Lucent Award
August 6, 2007, 11:57 PM
Google plans ultra-fast wireless Internet for Research Triangle Park, N.C.
August 12, 2016, 6:30 AM
Twitter Senior VP: "Diversity is Important, But We Can’t Lower the Bar"
November 9, 2015, 9:59 AM
CNN Resorts to Internet Censorship to Promote Clinton Over Senator Sanders
October 15, 2015, 2:47 PM
Breaking Bad: How to Crash Google's Chrome Browser With Just 8 Characters
September 23, 2015, 11:08 AM
Quick Note: Amazon UK Offers £10 Back on Any Order £50 or Over
August 3, 2015, 12:05 PM
Editorial: Reddit Allows Itself to be Hijacked as a Hate Platform For Racist Bigots
July 21, 2015, 6:32 PM
Most Popular Articles
Car Insurance - The Hidden Discriminatory Practise
October 18, 2016, 5:00 AM
Is Razer Blade Stealth Laptop For You?
October 16, 2016, 5:00 AM
Cyber Hackers Threaten Security of Lifesaving Medical Devices
October 19, 2016, 8:09 AM
Excellent Wi-Fi Camera - Panasonic Lumix DMC-FZ300K
October 18, 2016, 5:00 AM
Problems with Windows 10 – Update Now
October 15, 2016, 7:30 AM
Latest Blog Posts
Medical Council of India Makes Generic Medicines Mandatory
Oct 25, 2016, 5:00 AM
MacBoo Pro 2016: Release date Oct. 27
Oct 24, 2016, 7:16 AM
Mac Users, Try this if Your Mac is Infected?
Oct 23, 2016, 7:00 AM
Tips to Prevent Smartphones From Overheating:
Oct 22, 2016, 5:00 AM
Nasa Flies Drones at Nevada Airport
Oct 21, 2016, 8:21 AM
T-Mobile Data Problems
Oct 20, 2016, 10:17 AM
Annoying Apple Watch Problems and How to Fix Them
Oct 20, 2016, 5:00 AM
Your Mail May Soon Be Delivered By Robot
Oct 19, 2016, 9:34 AM
2018 Jeep Wrangler Prototype Sells At Junkyard
Oct 18, 2016, 5:00 AM
Samsung Shines with Gold Edition Tablet
Oct 17, 2016, 9:24 AM
Tesla Hints Mysterious Product Debut for October 17th
Oct 16, 2016, 10:14 AM
Samsung Galaxy Note 7 Phones on US flights
Oct 15, 2016, 5:00 AM
Comcast Fined $2.3 Million For Unconfirmed Services Charged To Customers
Oct 14, 2016, 5:00 AM
“American singer / songwriter “Bob Dylan is awarded 2016 Nobel Prize in Literature.
Oct 13, 2016, 10:33 AM
Battery Defect in Medical Device
Oct 12, 2016, 5:00 AM
IBM Bolsters Social Services Sector With Technology Grants
Oct 11, 2016, 5:00 AM
Scientists Sound Alarm on Climate but US Still Toys With Skepticism
Oct 10, 2016, 5:00 AM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information