Jury: Newegg infringes Spangenberg patent, must pay $2.3 million
arstechnica.com
arstechnica.com
MARSHALL, TX
From Wikipedia:
Marshall has a reputation for plaintiff-friendly juries for the 5% of patent lawsuits that reach trial, resulting in 78% plaintiff wins.
I've stopped myself getting surprised for any patent suits where troll gloriously wins and that decision comes from a court in Marshall. This town's economy probably runs on lawsuits that trolls bring in and jury members from the town seem to have special incentive to favor plaintiffs almost 4 out of 5 times!
Though i bet if the anti-patent groups got together and bought marshall a new football stadium, the win rates would go down ....
In any given case, the plaintiff either wins or loses. Assuming different cases are independent (which is probably at least a decent assumption), there's no more to say about the distribution than the win probability.
You could of course ask about the variance, skewness, kurtosis, 17th moment, etc., of the distribution of damages awarded or length of trial or total lawyers' fees or something. But for the actual win-or-lose figures, the question doesn't make sense.
Well, it kinda makes sense. Define the outcome to be 0 if the plaintiff loses and 1 if the plaintiff wins. Then with a win probability of 0.78 the variance is 0.17, the skewness is -1.35, the excess kurtosis is -0.17, etc., but there's no more information in any of these numbers than was already provided when we learned that the probability was 0.78.
Anyway, my point was to highlight that the mean alone is not very informative.
My apologies.
Everybody: Please stop upvoting my wrong comment. It was wrong. At best it may suggest a lack of clarity in the comment it was replying to, but that doesn't deserve 10 upvotes.
Thank you.
(Not that I mind being upvoted as such, but I do wish I saw more correlation between the quality of my comments and the votes they attract.)
Mark Lemley, "Where to file your patent case"
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1597919
EDT is not actually at the top for claimant win rates.
As this place in Texas has over the last 10 years built an industry around the IP cases going to trial there (with e.g. short-term office rental rates as high as in NYC) - maybe those are cases that are not "supporting" their continuing gold rush.
None of that of course touches on the fundamental flaw in the system that IP cases are so exorbitantly expensive that most have to pay those modern "highwaymen" even when knowing that their demands are most of the time completely without base and are solely a legalized form of extortion.
Just consider how you feel, when you worked for years and developed / invented a large scale real-world solution and those crooks with IP / patents originally being provided to protect their work on bicycles and abacuses are lining up outside your office all claiming that they would have done all the work.
So the first step to cure this must be a protection of business that have invested substantial time and money into their products, are bona fide and actually running a business based on their work, to be able to defend themselves against such frivolous law abuses.
In that particular case, which was regarding a ridiculously broad patent for offsite network-backups, the plaintiff lost on a technicality; there was proof of a co-inventor who hadn't been included in the patent-filing. If it wasn't for that oversight they would almost certainly have won the case.
Its worse than that. They claim that the speculative idea was all of the work, and you're nothing but a thief who stole it and did the easy part of, you know, actually doing stuff.
If this continues, soon someone might claim that Gerdt von Bassewitz invented space travel (Peter and Anneli's Journey to the Moon - the German title is actually nicer - translated: Little Peter's travel to the Moon -http://en.wikipedia.org/wiki/Peter_and_Anneli%27s_Journey_to... )
Ideas come in thousands and if not executed are not worth a dime. Doing it is the hard part and that's why companies building things generally get paid / make more money than science fiction book writers.
If you had to manufacture something before you could patent it, then your idea could be stolen by any potential investor. And some solutions you can't manufacture without help from entrenched businesses. Robert Kearns shopped around an idea to GM and Ford for a new wiper system. They stole it without paying him. If patents couldn't be held by NPEs, then the law would always be on GM and Ford's side, because Kearns didn't happen to own a massive automobile production line.
Why should owning a massive car factory be the only thing that qualifies you as an inventor?
Also, anyone who can beat you to market has a defense against your patent claim. The biggest, richest, fastest manufacturers win the right to produce everything they never invented.
Don't get me wrong, the patent system is definitely broken. The way it's broken happens to get exploited by certain non-practicing entities. But the problem isn't NPEs, it's _some_ NPEs, and really, it's just the features of the system those NPEs are exploiting.
The problem with our patent system is that no one actually seems to care about novelty or obviousness, even though they are supposed to.
Consider "a method for thermal refreshment of bread" (patent number 6080436). It's a toaster patented in the year 2000. David Martin, a patent quality assessor, claims that about 30% of the patents his firm reviews are for things that have already been invented.[1]
Software has it's own special version of this problem. Juries can't code, so they don't have any clue what's obvious, what's just an incremental improvement that anyone could produce if they knew the language. Juries can't tell the difference between design tweaks and brand new methods.
The problem is not that the system rewards intellectual effort, the problem is that the system rewards things that are effortless.
[1] http://www.thisamericanlife.org/radio-archives/episode/441/t...
E.g., a test for novelty and obviousness is that a skilled practitioner of the arts is shown the "result" of the patent (or a description of the result), but not the actual patent (which details how to achieve said result). If the practitioner can infer how the result is achieved, then the patent is not novel enough.
I mean to appeal the case judgement in another state...
I remember reading a while back that the hotel closest to the courthouse was owned by the son of one of the judges. Can't find the source right now, though.
Crunching the numbers, though, there are around 171,000 people in the counties that make up the juries. If national ratios of under 18 and felon populations hold that is a 115,000 member jury pool. If a jury is 8 to 12 people it would only take an influx of 11,000 to 17,000 software patent unfriendly people to average one juror on that side per case.
In short: Perhaps it is time to create a techie colony in the Marshall area. Remote working for the win!
Well, I was right. I really wish people better appreciated how corrupt and broken the patent process is and how appealing to ultra-conservative districts isn't some solution. Its part of the problem.
If anything, this verdict should prove that we are farther from a solution than ever. Maybe we'll have better luck with the next congress.
You hit on a more important point: the real issue is the patent law. In East Texas there's a certain ideological slant, and it sucks for legitimate companies. But in the end, they're merely implementing the law. Pretty sure punishing a municipality because of verdicts in a federal court there would result in a fist in the mouth from the FTC. Marshall, Texas, or Boston, or San Francisco, or wherever, results in zero change - the real effort needs to take place in Washington DC.
Right, this is exactly what I'm asking. But why is the answer automatically "yes"? Why can't websites have a disclaimer saying "this company does not sell or ship to entities in the Eastern District of Texas"?
The general rule is that a federal court only has personal jurisdiction where a state court of general jurisdiction would have it. So both the constitutional due process requirements (International Shoe, et. al.) and the state long arm statute come into play. (This assumes the patent statutes don't have unique PJ rules, they might.)
All that said, without having actually looked into the case law, I'd imagine you couldn't defeat jurisdiction by not doing business in the forum because the Calder effects test would be construed to apply to infringing a patent owned by an entity in the forum.
http://www.thisamericanlife.org/radio-archives/episode/441/t...
Here's some more info on the company they lost to:
http://www.techdirt.com/articles/20121109/02321120982/meet-p...
TL;DR: They're patent trolls.
I know that saying "made" is the generic form for acquiring money through any means. However, it also carries the connotations of production, of creation. I would rather say that they have already extorted $45 million using it.
EDIT: I'm mixing numbers. Not all of the 45M was from Newegg.
(I'm no expert, but I did work with pharmaceutical companies for about a decade, and in many cases they were manufacturing selling brand name and generic drugs side-by-side, or selling brand name in some markets and generics in others -- all from the same factory.)
So what you're saying is that drug patents add only a thin/negligible benefit above and beyond natural barriers to entry? I guess that's a good trade then--i.e., here's a "monopoly" (in your uncontested market) in exchange for the recipe of the secret sauce. From society's point of view, all that's left is to tune the expiration of the patent to coincide as closely as possible with the competition completing their tests and first factory without dissuading applicants.
Alternately, if competition is never going to reproduce the secret sauce as described in the patent, may as well do away with them since they could be scare would-be competitors from entering the market.
Then later on after the idea of an unbiased jury took hold, there arose a justifying theory that the jury could tell by careful observation whether or not a witness was telling the truth. This theory is dubious enough when applied to simple questions of outright lying. When it comes to judging expert witnesses testimony, it is totally bogus.
If they don't want to create a patent office court to adjudicate these cases, at the very least Congress should authorize the appointment of special masters to do fact finding in patent cases.
It seems they managed to convince the jury at least.
I saw lots of love for Diffie's "I invented it" line. But if he overplayed his hand, he ended up hurting his side more than he helped it.
After all, we consider that both Newton and Leibnitz invented calculus.
But it would not have been as cool to quote on web forums.
[1] I don't know if that's heresy or whatever; Egghead's legal team, however, would know and could coach him appropriately.
I'm not sure if special appointments of patent office courts would help. Look at the people congress places on technology commissions. Some of them wear their badges of technological ignorance as if its something to be proud of.
> "We're certainly very disappointed," said Cheng. "We respectfully disagree with the verdict that the jury reached tonight. We fully intend, as we did in the Soverain case, to take this case up on appeal and vindicate our rights."
> Soverain was the "shopping cart" patent that Newegg was ordered to pay $2.5 million for, but the company then knocked it out on appeal. Soverain's damage request was huge for Newegg: $34 million.
You could have said the exact same thing when they first went to court and it would have been just as true. But that's why they are doing it. They already lost simply by operating in a country with such broken patents.
Some more information about previous cases:
http://arstechnica.com/tech-policy/2013/05/newegg-nukes-corp...
Newegg has been my exclusive source of tech goods since they started standing up to trolls. I intend to keep rewarding them with my repeat business.
A troll's business model relies mostly on settlements, newegg can just keep selling computers.
I was depressed when I read the verdict, but your point here gives me new hope. I hadn't thought about that.
I wonder if they're going to hold back on their witnesses then for the appeals process as a sort of "ace in the hole?" I further have to wonder if the reason they decided not to use that witness was because they suspected they were going to lose this case and have to appeal?
I can only hope that the appeals process ends up invalidating this patent.
The whole point of their strategy is to discourage the next patent troll from trying to shake them down. Even if they lose this case, they will have continued to demonstrate that they are no push over.
I would imagine some patent trolls think twice about going after Newegg because they will fight. Fighting in court is not what a patent troll wants, they want the easy victim that will surrender easily.
Because if they go to court, not only does it cost them money but it could cost them their patent. It's better to go after an easier target.
It's why Wal-Mart was known for fighting all lawsuits back in the day. Because after the first time you settle with someone that "slipped" in the aisles you will suddenly find that someone "slips" in your stores nearly every day.
Given that, surely any jury made up of locals has a huge incentive not to kill the golden goose and deter patent trolling by letting defendants win. Is there not a conflict of interest here?
This would be a good point if patent cases were randomly assigned to districts. But they're not, of course - EDT courts are stuffed full of BS patent troll cases. So of course the patent suit win rate is lower there. It's still famously friendly to patent plaintiffs.
A well-informed jury about the topic at hand is bad for one party of a lawsuit. It's better that a jury is a blank slate so that the lawyers can attempt to convince them their story is the one, true story in the debate. It's why during jury selection they often actively attempt to find a juror that knows nothing about the topic or carries no opinion about it.
Of course, that's not necessarily true across the board. Sometimes one side does want people that know the topic and have an opinion about it but I bet those are mostly criminal cases.
Plus, to me anyway, if the juries did actually have this supposed high-level of knowledge and experience then the results would be more balanced. Because there's no way you can tell me that nearly every single patent troll out there is in the right with these cases. More of these patents should be tossed out for the silliness that they represent.
Lawyers do their best to get into courts and before judges they feel will be sympathetic to their case. To do otherwise is a disservice to their client.
In ED Texas, the clerks all have hard-science undergrad (and sometimes graduate) degrees as well as degrees from top law schools because this is a major leagues of IP litigation. Want a guaranteed six figure income as a 26 year old? Clerk for two years in Marshall, then send your resume to Cooley or Wilson Sonsini or Loeb & Loeb and see how fast they return your call.
This is miles and miles beyond most lawyers, who struggle with basic math and still use dictaphones and WordPerfect and aol.com email addresses.
This also means that the litigation goes faster, which is always something that clients complain about. Win or lose, you want the dispute resolved.
http://www.law.com/jsp/article.jsp?id=1103549728998&slreturn...
Based on that experience, I am inclined to disagree with your general premise. While these lawsuits bring a tiny bit of additional business to directly-related service industries (hotels, copy shops) my observation is that most of the "big money" stays within the legal industry, which is mostly based in the home locations of wherever these companies are. It is further my observation that the East District Court is not unusual in the kind of business that it brings to the surrounding area relative to other district courts (e.g., if not patent lawsuits, other suits) so there isn't much of a desire to protect its reputation as a patent court.
Finally while these stories do receive "national attention", this is pretty much entirely within the software development community, and patent lawyers. Ordinary people in East Texas don't follow any stories about patent lawsuits ever. They're boring.
Here's a benchmark for you: I am a software developer, who lobbied my congressman about patent law earlier this month, and on the day this lawsuit was filed, I was 45 minutes from the court by car. I am the textbook case of a person who would be following this story. Today is the first day I have ever heard anything about it.
When things go wrong in California or New York or Massachusetts, those states aren't blamed: the individuals take the heat! (What a concept!) But whenever something bad happens in Texas, somehow all 26 million of us are involved and culpable.
Case in point: a few minutes ago there was a post here saying we should poison the water in East Texas to stop this. Thankfully, it has been deleted.
Battling bigotry with bigotry is not likely to work. When Hollywood pushes for another batch of draconian copyright laws no one here raises up there hands and hopes for the "big one" to knock LA into the ocean. When municipalities go after Uber or AirBnb no one begs to push that entire state out of the union. Why the double standard?
(I know why, no need to answer that question)
Certainly as a Texan and tech person I'm not a fan of this ruling but the vitriol displayed here towards an entire state verges on disgusting. FWIW, I grew up in the Bay Area and across California, I'm not some Pineywoods hick who never left the trailer park.
I am, however, quite tired of the hatred and, frankly, gleeful malevolence sometimes displayed on this site towards Texas.
But the comparison is not very apt. Hollywood's draconian copyright laws would mean that you can't watch a movie or listen to a song, which is no big sacrifice. Patents are an affront to your freedom. Any service, app or business you build will violate some patent or the other. Countries have chosen to hand over monopolies on ideas and thought.
This may not affect many of us. But having to watch helplessly while companies like NewEgg suffer is very, very painful.
Patents can affect anyone at any time, whereas copyright laws affect certain individuals that have violated the terms.
Theoretically of course. There have been cases of people being sued for piracy when they don't even have a computer.
I'm just very frustrated. The future of Texas, just like the rest of the country (but very much so Texas), is technology. This one little town, and this one judge, seem to be hell-bent on destroying innovation. There's just so much wasted energy and effort, and it makes me sad to see the bad guys win so frequently (and these are bad guys; they've extorted millions from people who had no idea this really silly patent existed).
How would we go about changing this? Surely the rest of the nation is taking note at the bias afforded to patent trolls by Marshall. I just don't understand how, especially in this case, they could have sided with the troll. Is there an economic benefit for the people of Marshall to side with the trolls or are they just completely oblivious when it comes to technology cases? I am completely dumbfounded by this Texas court.
I think, in the end, there needs to be patent reform...which just got shot down before it ever really even got any traction. So, I don't know. Educating people about the harmful effects of software patent law and patent trolls might be a useful start. This is pretty obscure stuff to most people.
Texas' population is almost 10% of the US. Texas is also the 2nd largest state, comprising almost 8% of the land mass of the US. Besides, I'd guess half of the HN crowd today are overseas - I doubt the average non-North American HN person could name more than 7 states. And of those 7, Texas, California, and New York are in every single person's list.
Well, as a Florida resident, I think we must be some exception to your rule then. It seems we always get blamed as a whole for the actions of the few.
Someone named Michael Jones patented using SSL with RC4. Which in seems was a known and used combination at the time he did so, as was testified by the expert witness? But the jury thought that not relevant.
The patent would seem to avoidable if say using AES instead.
Caution: I don't know what I am talking about and just looked the above up on wikipedia, which I probably misunderstood. Hopefully someone who understands this in more depth will post.
http://googleonlinesecurity.blogspot.com/2013/11/a-roster-of...
Soft example: Video decoding.
Hard example: Mars rover.
"We've heard a good bit in this courtroom about public
key encryption," said Albright. "Are you familiar with
that?"
"Yes, I am," said Diffie, in what surely qualified as the
biggest understatement of the trial.
"And how is it that you're familiar with public key
encryption?"
"I invented it."
- That we have good and effective Intellectual Property laws. It seems one of the big lessons of the Industrial revolution was the right property laws. The principles behind patents and copyright law make sense in this regard. Its the specifics that have problems.
- The analogy to physical property is worth following more deeply - countries such as in S America, ie Chilie, are trying to undergo property law revolutions, and often local knowledge is clear - everyone "knows" that Juan lives in that building and has done since he was born, and maintains it for his family. Therefore it is "his" house. Our IP laws generally need to come to some agreement on a similar situation - where there is clear contentious dispute, local (ie expert) knowledge is needed.
- This is more or less what is happening here - someone is claiming Juan's house was actually their house. A jury was asked to decide with clear expert local knowledge. So the process is what we want. Its just in this example we choose a bunch of idiots for the jury.
- Software should be copyright. This will cause difficulties in "porting" software, and in doing the same algorithm in php and then perl.
summary: IP rights is more likely to be a good thing than a bad thing, just like property rights. However bad implementations of property law have seemingly held back countries like Brazil / Chile, and we do not really know what IP law should look like to be most suited. I prefer allowing local knowledge to be primary in cases of dispute.
(http://www.ted.com/talks/niall_ferguson_the_6_killer_apps_of...)
I personally disagree strongly with IP in the first place. Of course, this leads to a divisive opposition against the current regime between those who still want IP and those who don't, but it is something I feel strongly enough about I am not willing to concede on. Things are awful right now, and having "better" IP would reduce the likelihood of an open information society because people would be even more complicit if the laws weren't so laughably bad right now.
I think that Diffie et al did actually invent something in mathematics. They were able to publish in an environment where their claim to invention would be respected and they could reasonably expect to profit from it (in career terms).
This is the nice, fluffy level where everyone publishes for the common good. I am all for that. I just don't think that works for a world where the majority of value is exepcted to arise from not physical labour but the application of intelligence (to physical labour)
As a simple example - I build a concrete "squirting" robot that like a dot matrix puts dabs of concrete down on the ground, and with some darn clever software it can build a house or a office block.
I think I should have to choice whether to release that code as free, or if I make all building companies pay me royalties. How we enforce that I do not know, but I do know that I would rather live in a world that has the problem of working out how to share out the value created by robots that build everything, than potentially strangle it in its crib.
IP isn't about whether you own the robot you built, it's about whether you own similar robots other people built.
But you come at it from the perspective that you just clonk down our culture and psyche around information into a world without IP and everything goes to shit.
In reality, businesses evolve and adapt. Rather than consider r&d a capital investment in future revenue, your r&d budget is a public service - something you would want either cultural pressure to coerce out of businesses (I'm also a libertarian, and IP is just raw governmental power) but you could also argue from the socialist perspective the idea of using violent coercion of the state to transfer wealth into r&d.
Either way, you are not researching to create profit. And I would argue you don't need to anymore. The things people want are things people will pay money to see developed. Not pay for in the end product, but pay the researchers up front. Instead of sitting back and hoping a cure for Parkinsons gets funded by a medical megacorp looking to profit off the IP, you throw money at Parkinsons thinktanks, and can appraise them on an individual basis for their merits, and put money where your mouth is for the things you care about.
And then the rest can be voluntary. For the most part today many of our modern revolutions are voluntary - everything from standardized Internet protocols to tcp/ip were all developed not as for profit ideas but as standards to elevate humanity, and we reaped huge benefits from them.
Because all that money spent today on R&D, and today on the patent lawsuits and lawyers, and today on policing every corner of society to ban thoughts and numbers, could be spent funding the research you want.
Because it is a value proposition in whatever regime you have, but I am of the opinion that those who value research into certain fields would throw money at it regardless of profit motive because they want the end product, not the potential capital gain. I'd even argue that is a more effective way to develop innovation, because if your goal is the invention and not the profit afterwards, you have much greater clarity of vision to meet your goals.
Historically, the "throw money at it" approach to solving problems has not been particularly successful. We're not just talking about a single disease, we're talking about thousands upon thousands of illnesses. Markets are the most efficient mechanism we have yet discovered for the productive allocation of resources. Unless you can show how you'd bring that power to bear on practical medical research in the absence of IP, you're stuck telling a story about how this time, some bureaucracy will get the job done. I'm shocked any libertarian really believes that.
I can go into more detail if you'd like.
According to the reasoning behind IP, if I chop some wood I should have to ask the person who invented fire if I can make a fire. IP is the idea that you own my uses of that wood, and get to tell me whether I can build a fire or not. You can then have a bunch of thugs take my wood if I even dare try to build a fire with it. Or if I do build a fire and use it to cook food, then the thugs also demand food.
The important part is that building my fire doesn't exclude you from building fires. In no way does my knowledge of how to build a fire prevent you from using that knowledge to build fires.
> That we have good and effective Intellectual Property laws. It seems one of the big lessons of the Industrial revolution was the right property laws. The principles behind patents and copyright law make sense in this regard. Its the specifics that have problems.
No, the principles don't make sense. IP is not based on the same principles as property. It doesn't even share the same legal history. Copyright law originated from the church attempting to regulate and control the printing presses. Copyright shares more legal history with censorship than anything else. Early copyright laws in England were even referred to (correctly) as "monopolies."
> The analogy to physical property is worth following more deeply
There is no analogy. Ideas aren't physical things. My use of "your" idea doesn't exclude your use of that idea. There is no conflict of property.
> Software should be copyright.
No, I have the right to use information as long as that use does not exclude others from using it.
Intellectual property increases freedom by creating a form of property that individuals can create without needing to own a scarce resource. People can become property owners simply through usefully employing power of their intellects.
If you dislike this form of property, then you must articulate an alternative way to divest power from those who hold other forms of property, otherwise you are merely a defender of landowners, governments, corporate monopolists and other vested interests.
I don't follow. Why do my arguments against intellectual property depend on some your unstated arguments against owning any property at all?
I'm left to assume you support the decision in this court case, because it's perfectly consistent with the reasoning behind copyright and patents.
A corrupt court making a poor decision has nothing to do with the reasoning behind copyright and patents.
It can and does exclude me from certain uses of that idea. For example, if my intended use of that idea involves profiting from selling a good/service incorporating that idea, but my target customers decide not to buy from me specifically because you are using that idea. Sure, I can still use the idea in many other ways, same as you can use your land for many other things even whilst my sheep are grazing on it, and what was your wood for other things even after if I've burnt it to ash, but your use of my idea has reduced its value to me. All property is monopoly rights over something, and yes, all forms of property rights can be abused; that in itself is not an argument for their elimination.
Especially because a fire inventor being deprived of profit is not what is happening. What is happening is someone uses a broken system to register their idea of cooking rabbits after watching other people cook different animals. He is then given exclusive rights to cook rabbits, and he goes directly to extort shells and shiny rocks from the guy two caves down who has been cooking and trading rabbits for years now.
If we cannot have patents without "scan-to-email" extortionists we should not have patents. Creating an incentive to do no B2C business because it is more profitable to sue other companies for using obvious ideas is contrary to the intended purpose of the patent system anyway. Either get patent examiners that can do it properly, make it dirt cheap to challenge a patent, or shut it all down.
If Juan and I each claim the house then our furniture and our bodies would be in each other's way if we used it at the same time.
If you use my algorithm (add each value in order and check against a checksum provided from another account) to balance your check book, it won't keep me from balancing mine.
Comparisons to the industrial revolution and medical devices are likewise bogus analogies because it takes time and resources to turn designs into physical products. I can use my algorithm and profit from it as soon as I've worked it out. And, as RMS would point out, we write software to do things. Make money off doing the thing, not trying to sell an idea.
Software patents are relatively new in the world. So far, they have only led to damage.
OTOH, the existence of patents gives people a reason to keep their ongoing research secret, and so maybe moves us closer to the world they were designed for. Patents exist for the purpose of alleviating problems which mostly only exist in a world that has patents.
Ahh yes. Nothing but knuckle draggers out there. Am I right? Nevermind all the great engineering schools, top cancer centers, and major tech hubs. Nope. Texas is nothing but racist bigots despite being one of the most racially and culturally (the most?) states in the union.
Believe it or not, the lower right 1/3 of the US is a little more diverse than is portrayed on Dallas and The Dukes of Hazzard.
> TQP lawyer Marc Fenster could have acknowledged Diffie's accomplishments while arguing that his client—an admittedly little guy—still should get his rights, his little piece of "intellectual property."
> That's not what Fenster did. He went on the attack.
http://arstechnica.com/tech-policy/2013/11/newegg-trial-cryp...
But, in this case, all they had to do was judge the difference between the inventor of public key encryption and a paid shill for patent trolls. The expert witness on the side of the troll is a guy who does this for a living; the expert witness on NewEgg's side was Whit Fucking Diffie. The "Diffie" in "Diffie-Hellman".
There's a reason patent trolls have all set up shop in this backward little Texas town. It's biggest industry is stifling innovation for the rest of the country.
I mean no disrespect to the man. I hold him in high regard. But watch an interview with him and tell me that you think most people are going to find him to be a humble and appealing man.
"Lack of evidence? Who cares? He looks evil, must be a killer .."
I'd also be curious to see the results of an unbiased survey covering the public's awareness and understanding of patent trolls.
If only I could change careers and go into patent law... And help fight the good fight.
The actual reasons filing patent cases in EDTX is popular are:
• EDTX does not have a busy Federal criminal case load. Criminal cases have higher priority than civil cases. If you try to litigate a complex civil case in a district that has a heavy criminal load (e.g., anywhere that has a lot of drug trafficking), it can be nearly impossible to get any court time.
• Patent cases are complex. If you have a judge with little experience with patent cases, things will go slow. So, people like to file in districts that have a few judges with patent case experience.
http://gizmodo.com/5824912/who-is-really-snuffing-out-americ...
http://www.wired.com/gadgetlab/2011/05/app-store-patent-trol...
Damned near all patent troll are based in hickville towns. It is not coincidence and it is not because the judges are "experienced" with patent cases. It is because those judges side with the plaintiffs.
"No Texas district is even in the top 5 for win rates for patent plaintiffs. You'd think if they were "in the pockets" of patent trolls, the trolls would achieve better outcomes there."
Because they shouldn't win any of these software patent cases. We're talking about trolls...businesses whose only purpose is to shake down people who build real products for real people. Every damned one of these cases should be laughed out of court. They go to Marshall because they won't get laughed out of court.
Not necessarily. If all the plaintiffs with poor-quality patents sue in that district (and they mostly do), those losing cases will pull down the patent plaintiff win rate for the district.
So it could still be the most patent-plaintiff-friendly district, even if the win rate is lower there.
But, Texas does have a reputation for being backward, regressive, racist, and willfully ignorant. It was Texas State Board of Education that led to a decades-long battle over evolution. If that's not embarrassing, I don't know what is.
Texas also just passed a law that will shut down all but 4 (maybe 5) of the health clinics that offer abortion in the entire state. Those clinics are also where a lot of folks get birth control, STD testing, and often where poor women go for gynecological care.
Texans will spend 15% more on healthcare because of the stubbornness of our governor. Whether one agrees with Obamacare or not, it's pretty nasty to intentionally screw over poor people out of nothing more than spite.
Texas definitely has a bad reputation. And, it deserves that bad reputation.
RE: the clinics, instead of closing, could those clinics continue to offer the other services and simply stop offering abortions? I feel like it's throwing the baby out with the bath water to just shut down altogether. Perhaps I am just misunderstanding the legislation, so please correct me if I'm wrong.
I do not belive all Texans (or even the most of them) are as bad as one might think, but the tiny bits of information we get about Texas paint an ugly picture.
We do not get Reports like "Things are going well in Austin!". In the internatiol news reports. We get reports like "Stricter abortion laws, force clinics to shut down", "Armed Militia hunting illegal imgrants at the Border", "Patent troll wins in Texas", "...".
Texas is a great target for critics all over the world:
Texas is well known and is closly associated with Cowboys, strict laws, and the death sentence.
Liberals have someone, to bash and local conservativs are glad that critics get distracted by someone far far away.
So I´m sorry Texas reputation is bad, not only among IT folks, and not only in small hardcore leftist cells.
I do _NOT_ say that all this true. Hell, I would be shocked if it really was!
Although, I disagree with the theory.
And then the defense surprisingly declined at the end to rebut the damages claim of $5.1 million:
"Then came another stunner: Newegg rested its case. It did so without putting on its expert witness to rebut TQP's $5.1 million damage claim—even though documents in the court docket clearly indicate the company had such a witness."
[1] http://arstechnica.com/tech-policy/2013/11/newegg-trial-cryp...
IANAL, but it seems like a reasonable gamble to me.
Just winning a cheaper verdict today won't reduce their costs in the long run by much. The PTO issues hundreds or thousands of new patents every year on business processes Newegg is already using so there's no limit on potential future litigation.
Nearly 8 years ago. Unfortunately nothing whatsoever has changed.
http://www.cnn.com/2013/10/01/business/10-best-places-to-sta...
I mean at the end of the day this lack of timely reform is fundamentally making people look for asymmetric ways to entirely avoid problems. Is that the way society should be driven? I think that is an unstable driver of future events --- a society that cannot reform itself in a timely manner, that cannot properly forecast events and repercussions, is a society that is forgetting it's responsibility for balancing itself.
I really do not like this behavior; it is abhorrent of a society that can be a seer. I mean there is the usual belief that we are all equal and deserve equality --- but that cannot happen as long as we inherit citizenship, wealth and networks. It is a nice belief but simply cannot be rendered in any sort of predictable manner.
This creates a situation. Their are private discussions on the ongoing nature of patents --- but I feel that more than anything people are forgetting that as the point of a corporation is it's superhuman predictable nature, that the further antagonization of new corporations will balance itself not with a mutated form of socialism but with an asymmetric alliance of corporations - one which favors unpredictability and an increased rate of change.
Wealth and the rate of innovation are separate --- and that fiction will reveal itself at a much faster rate if proper steps are not taken in a timely manner.
I'm probably acting like an idiot. But I mean I think this just is creating a recipe for crazy lawyers to try some shit on someones dime.
How much better is the patent landscape in the EU? I've heard conflicting reports.
Of course he does. It's the very judicial system that presented him with an easy $45m. He is a parasite (quite literally) and he knows it.
http://www.marshallnewsmessenger.com/news/online-retailer-ne...
Seems to be more of a TQP slant to it.
> Fenster described the inventor of the patent, Michael Jones, as a hard worker.
> “He doesn’t have all these fancy degrees,” said Fenster. “He’s a hard worker, creative, smart, an innovative guy, and he loves technology. He’s great at recognizing problems of the future and finding solutions.”
The article is entirely one sided and reads as if the plaintiff himself wrote it. As it is the only exciting thing happening in town, many of the jury member's family and friends will be reading articles of this sort during these trials, representing only one side of the case.-
Amazing that the article notes the patent was awarded in 1995 and fails to mention that RC4 was invented in 1987.
I find it funny that Fenster, after praising Jones in this way, would attack Diffie's credibility by pointing out that he lacks a master's or PhD.
[1] http://arstechnica.com/tech-policy/2013/11/newegg-trial-cryp...
If they are, I can see why TQP won. The TQP statements do a much better job of appealing to emotion, talking about "the little guy" who "doesn't have all these fancy degrees." A "hard worker" who created "the invention that makes [Internet credit card] transactions safe," and TQP saw companies "using it and not paying for it," so they "invested millions of dollars" and now "more than 125 companies, including PetSmart and Amazon" have taken licenses.
Can't say I like the results, but I can see why it worked. It tells a story that people love to believe.
Most of us not in the IP industry think a lot of these suits are ridiculous, and it's because we don't make our lives by the reality of how IP law is structured.
These cases are ridiculous because IP law is ridiculous. It's not Marshall, TX's fault that IP law is ridiculous, and these juries very well may be the most knowledgeable jurours out there. That fact is dangerous, however, because this town's specialized experience makes it as if these companies are arguing cases in front of a jury of paralegals instead of representatives of the public, which absolutely will bias results.
Part of the reason we have juries is to balance the law with common sense. Common sense means something different when you're almost as knowledgeable about the law as the lawyers in front of you.
As a lifelong Texan I do believe you overestimate the knowledge base of people that willing live in East Texas. Most of the technical smart folks in Texas have migrated to Austin, DFW, San Antonio or Houston for real jobs. And most of them don't have a fucking clue about encryption.
East Texas is a dream situation for attorneys considering the average knowledge is lower than the rest of this state. Have this trial in Dallas and you might get a engineer from TI or a statistician from my company on the jury. East Texas is what we in the city refer to as the "Sticks". The per capita income is half that of even the older suburbs in Dallas.
Patent trolls want that district because that's where they win the most. It's similar as to why they avoid certain districts, because that's where they lose the most.
If another district had the reverse stats, where a large number of patent suits are filed but patent trolls lose 80% of the time, you would have a district that had a "high knowledge base" in the jury pool. Patent trolls would avoid it like the plaque, despite having such a supposed intelligent jury pool.
Business idea: a service that investigates your stack (with your permission) and verifies that you're not likely to be sued.
I'm genuinely curious and concerned.
Patent law has transformed into basic extortion, and it's interesting (for some definition of interesting) to see that such extortion is actually legal in the United States.
As for the legal extortion using lawsuits. That's an old game in the US, there are people who make an active living out of suing somebody for something and offering to settle. Get a copyright infringement letter from somebody? I guarantee you that the settlement offer will be much less than defending yourself in court, even if they are mistaken in their accusation. It's an industry that people have been abusing for years, if not decades.
The courts themselves have to do something to stop this but I see no signs they are interested in reducing the need for more resources to be spent on things the courts need to address these cases.
It doesn't help that juries are apparently the dumbest people on earth.
On one hand, it's yet another nail in the coffin of innovation in our country. On the other hand, shame on Newegg's lawyers for being so hubris.
My current thought was they planned to appeal from the beginning to get it out of that district. Why waste time in a district you know there's an automatic 80% chance you're going to lose?
I still feel fortunate to live in this country but the dysfunctional patent system has nothing to do with it.
The status quo is this: When you receive a letter from a patent troll, you're already out at least $50k or so, possibly several $100k or even more if you decide to fight on longer. You can receive such a letter simply for scanning and printing a pdf file, or operating a shopping cart on your site.
This situation must be fixed.
College isn't a guarantee of being able to process things that way or the only way to acquire such habits, but it is a good indicator.
I think it might be more effective to attack the problem from the other end: making sure patents like don't get issued in the first place. Maybe it's not reasonable to expect every jury to understand the basics of encryption. But it is reasonable to expect the patent office to understand prior art in cryptography.
To other commentators: no offence meant for people of Texas, if it is how it works, it is just cold-blooded business decision, nothing more.
Props to Newegg for fighting the good fight.
If that's the case, the United States needs some serious judicial reform.
I'm not sure I agree that this is the actual problem with the patent system.
Definitely small enough for the entire town to know and understand that voting in favor of a plaintiff today brings more money to your town tomorrow.
We're not bummed about additional incentives to avoid this broken approach to TLS, are we? This is actually a fucking good thing.
[0] https://community.qualys.com/blogs/securitylabs/2013/03/19/r...
http://en.wikipedia.org/wiki/United_States_District_Court_fo...
While it would be interesting to know why it happens in Texas.
You can see something similar on a local level.
Being accused of certain type of crime? You really want this judge.
Having an argument with your neighbor over a fence issue? Well, let's try to get this judge because I know he doesn't like that guy's uncle.
Some well-positioned people smell it and started refining the process while building up legal machines for consolidating power and squeezing every advantage out of the system.
They also have already moved ahead in protecting interests from retribution of the noble AND pitchfork variety.
Let's also not forget that there are parties shaking hands over a couple few million... and we're just sitting here worrying that someone is plotting a highway tax for when we finally ascend to such neighborhoods.