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"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng

Patent troll Soverain sued 50 different high-profile e-commerce websites over patent infringement (some big names like Amazon, Avon, and Victoria's Secret actually settled for millions with Soverain), alleging that it owned three patents pertaining to digital shopping carts. Early on, the case looked rocky for Newegg, an online technology products retailer, when the judge overseeing the case refused to allow Newegg to argue that the Soverain patent was invalid.

However, on appeal Newegg's legal team was able to trot out prior artwork to help get the patent case defeated. That prior artwork came from 1984 in the form of a magazine ad from CompuServe bragging about an electronic mall. The District Court judge had originally denied the invalidity argument because the judge said there wasn't "sufficient testimony" and that making the argument to the jury would be "very confusing" to them.

Soverain continued to argue that the system CompuServe used didn't include a "product identifier" as its patent defines.  The patent troll also argued that CompuServe's system lacked a "shopping cart database." Those arguments didn't work for Soverain, as a three-judge panel decided that all of the shopping cart patent claims the company made were rendered obvious in the light of CompuServe Mall.


As a result, Soverain won't get the $2.5 million it hoped to snatch from Newegg's bank account. In addition, retailers in currently pending lawsuits will also likely be off the hook to feeding the troll.

Newegg chief legal officer Lee Cheng said in an interview with Ars Technica:
 
We basically took a look at this situation and said, this is bullshit. We saw that if we paid off this patent holder, we'd have to pay off every patent holder this same amount. This is the first case we took all the way to trial. And now, nobody has to pay Soverain jack squat for these patents.
 
Cheng also noted that Newegg decided to fight to the death over this lawsuit versus settling because the company is majority owned by its founder, Fred Chang. There are no shareholders to answer to, so Chang has the long-term prospects of his company in mind rather than short-term gains to temporarily help out the balance sheet.

In his parting words to Ars Technica, Cheng didn’t have many good things to say about what he calls “submarine” trolls – those that lurk under the surface for years, and then hit unsuspecting companies for millions.
 
“Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down!' Screw them. Seriously, screw them. You can quote me on that.”

Source: Ars Technica



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This makes me all giddy inside!
By Brandon Hill (blog) on 1/28/2013 10:15:44 AM , Rating: 5
quote:
We basically took a look at this situation and said, this is bullshit. We saw that if we paid off this patent holder, we'd have to pay off every patent holder this same amount. This is the first case we took all the way to trial. And now, nobody has to pay Soverain jack squat for these patents.


quote:
Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down! Screw them. Seriously, screw them. You can quote me on that.


I've always liked Newegg, but they rock even more now :)




By HoosierEngineer5 on 1/28/2013 11:04:58 AM , Rating: 5
Deserves a 6.


RE: This makes me all giddy inside!
By dgingerich on 1/28/2013 11:17:40 AM , Rating: 5
This guy needs to run for political office. I want to see a politician with this attitude.


RE: This makes me all giddy inside!
By MrBlastman on 1/28/2013 11:31:56 AM , Rating: 5
We have tons of politicians with that attitude already. They've been saying "screw you" to their constituents for years!


RE: This makes me all giddy inside!
By Argon18 on 1/28/13, Rating: 0
RE: This makes me all giddy inside!
By timothyd97402 on 1/28/2013 1:37:33 PM , Rating: 2
the world seems full of mean spirited, opinionated people who spout off with little regard for facts these days...


RE: This makes me all giddy inside!
By MrBlastman on 1/28/2013 1:49:18 PM , Rating: 3
You mean like the media? Oh, sorry... the government-sanctioned propaganda machine? Wait? What?

One thing is for sure--they spout off with little regard for facts these days...


By HoosierEngineer5 on 1/28/2013 3:01:57 PM , Rating: 2
I thought I was the only one to notice that...


RE: This makes me all giddy inside!
By HoosierEngineer5 on 1/28/2013 3:00:30 PM , Rating: 2
A large number of folks aren't asked to pay anything.


By jimbojimbo on 1/28/2013 5:41:10 PM , Rating: 3
Yeah, those are the registered voters who also don't work and sit around asking for more and more from everybody else that does work. Why work if you can vote someone in that'll give you money for nothing?


By Ammohunt on 1/28/2013 1:35:49 PM , Rating: 2
People with spines its a rare quality in our passive aggressive society. More and more people need to be told to get fucked in order to learn how to get along with others.


RE: This makes me all giddy inside!
By Etsp on 1/28/2013 11:43:40 AM , Rating: 5
Can we get that quote included in the quotes that show up at the bottom of articles?


By Brandon Hill (blog) on 1/28/2013 11:56:47 AM , Rating: 5
Done!


RE: This makes me all giddy inside!
By Motoman on 1/28/2013 2:21:35 PM , Rating: 1
I <3 that. I <3 that a lot.


By Omega215D on 1/28/2013 3:38:53 PM , Rating: 6
Once you know, you Newegg...

Once you troll, you get Newegg'd


RE: This makes me all giddy inside!
By Reclaimer77 on 1/28/2013 4:18:13 PM , Rating: 1
I applaud political incorrectness of all sorts. Bravo to this guy indeed. Just tired of the bullshit with everything, ya know? Love it that this guy just came out and said it how it was, without worrying about softballing it.

Now about Newegg...is it just me or are they getting beat on price for PC components a lot more than usual lately by Amazon and others?


By Master Kenobi (blog) on 1/28/2013 9:12:13 PM , Rating: 2
Yea, Amazon's supply lines seem to be getting better, they are rocking pretty much any market they dabble in now.


By inperfectdarkness on 1/29/2013 2:42:51 AM , Rating: 2
What this says to me is that there's a LOT of benefit to private corporations. I've lost track of how many companies immediately begin down the dark-side once the IPO is up.

Besides, how many non-government, private corporations have defaulted on pension/benefits promises, as opposed to public ones?


RE: This makes me all giddy inside!
By mars2k on 1/29/2013 11:22:56 AM , Rating: 2
So cool, now we need to see someone do this to Apple


"Shopping Cart"
By rdhood on 1/28/2013 1:24:11 PM , Rating: 2
ANYONE who doesn't see using an electronic "shopping cart" as an obvious development in online shopping e-commerce is stupid. That there would even be controversy or lawsuits over this is even more stupid. Shame on those lower courts, shame on the patent office. This shiite is out of hand.




RE: "Shopping Cart"
By GreenChile on 1/28/2013 5:30:07 PM , Rating: 5
Makes about as much sense as patenting a rectangle with rounded corners then suing every phone and tablet maker for copying their design.


RE: "Shopping Cart"
By theapparition on 1/29/2013 9:56:30 AM , Rating: 3
And yet Apple just got awarded a patent for animated page turns, something that mimics nature and has tons of prior art.

I seriously want to see anyone pro-Apple try to defend frivolous patent submissions like this.


RE: "Shopping Cart"
By Jaybus on 1/29/2013 11:35:39 AM , Rating: 2
Yes, the big fail of the lower court was to disallow arguing the validity of the patent. Everyone knows that a patent is not necessarily valid based solely on the whim of some clerk at the PTO. It is only truly valid after being affirmed by a court. These patents had never been argued in court, so no judge could legitimately disallow validity arguments. I would assume that was part of the basis for the appeal.

The good news is that the system worked, though it should have been decided in the lower court. No amount of patent reform will change the fact that PTO clerks do not have the legal expertise of judges and most likely not the technical expertise either. The other good news is that the bogus troll patents have been invalidated by a court. Not only will US companies be off the hook, but all companies will now have a court decision in their arsenal should they be sued in other countries. Those patents are effectively dead outside of the US as well.


Prior Art?
By KFZ on 1/28/2013 12:53:49 PM , Rating: 2
Read the source article. Why couldn't the judge look into this bogus company run by lawyers and see that it doesn't do any business? It's just a sham site full of pseudo-information and it's shaking down massive retailers.

Every single one of them should turn around and sue the woman behind Soverain and her lawyer buddies for everything they're worth. Then throw them in jail.




RE: Prior Art?
By mckirkus on 1/28/2013 2:19:20 PM , Rating: 2
Maybe because all judges used to be lawyers.


RE: Prior Art?
By Jaybus on 1/29/2013 11:11:45 AM , Rating: 2
Its exactly because judges are lawyers. The other lawyers then know how to present the case so that the judge is thinking in legal terms, and therefore bypassing common sense altogether.


Newegg is still the best!
By morgan12x on 1/28/2013 10:20:33 AM , Rating: 5
Time to go buy something from Newegg.




Major props to Newegg
By LBID on 1/28/2013 12:56:42 PM , Rating: 3
I already buy a crapload from them, but I think I'll look for more ways. Anyone with an attitude like that deserves my business.




another reason to buy from newegg
By JimKiler on 1/28/2013 1:26:29 PM , Rating: 2
Thank you newegg!




Hero
By ARoyalF on 1/28/2013 4:14:38 PM , Rating: 2
Any legal officer that can say "jack squat" and "bullshit" is the man.




Good for newegg
By dom888 on 1/29/2013 4:27:43 AM , Rating: 2
Thumbs up for this guy!




bravo cheng
By ERROR666 on 1/29/2013 12:19:36 PM , Rating: 2
and newegg




Patent Kung-Fu
By chµck on 1/28/2013 2:41:42 PM , Rating: 1
These asians sure do know how to deal with patent trolls!




Very poor choice for picture
By LazyBoZo on 1/28/13, Rating: -1
Team America
By thomp237 on 1/28/13, Rating: -1
RE: Team America
By LazyBoZo on 1/28/13, Rating: -1
"People Don't Respect Confidentiality in This Industry" -- Sony Computer Entertainment of America President and CEO Jack Tretton











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