No, and that's one of the problems with our patent system.
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.
No, that is not what they had to judge. I disagree with the outcome too, but the case was more complex than that. As far as I understand, part of the problem was whether or not this patent or RC4 had priority based on timing, which hinged on when RC4 and the method in the patent under litigation became known by enough people to be considered publicly known.
I wonder if that ever gets flagged in courts? You know, people who appear to be "professional expert witnesses", i.e. they make their living being an "expert witness" in court?
The average American is going to find Whit Diffie to be an ass.
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.
This statement (thanks for providing a concise version of it) sums up the problem with the whole idea of a jury trial. It is completely irrelevant if someone thinks he is an ass. He is there to provide expert knowledge, nothing else.
"Lack of evidence? Who cares? He looks evil, must be a killer .."
No, but I would expect jurors in a patent validity case to understand the concept of "prior art", which was demonstrated quite conclusively for this "invention".
This was my opinion too. I'm shocked that they didn't take it into consideration. Ironically the plaintiff tried to discredit Diffie by mentioning that the GCHQ "invented" the encryption even before Diffie did (this was mentioned in a previous Ars Technica article) which makes it prior art to the alleged patents too. A sad day :(
Therein lies one of the problems with software, patent law, and our judicial process: if the jury doesn't understand the underlying technologies, how can they possibly make an informed and responsible verdict?
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.
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.
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.
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.
> 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.
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.
A bad reputation among who? Maybe in your insular circle, but certainly not for the majority of middle-class Americans. It has the highest in migration rate for a reason.
Yeah, I live here (Austin; spent 10 years in Houston, too). I love Texas.
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.
As a native Texan (I've lived in the Houston area for about 26 years), I agree with most of what you say.
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!
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.
Well since Newegg made the money, perhaps TQP was awarded the $45M that Newegg et al made, or TQP was shown to deserve the $45M that Newegg et al made. But you're right, let's be clear: TQP didn't create any wealth here.
EDIT: I'm mixing numbers. Not all of the 45M was from Newegg.
If the copyright enthusiasts can misuse legal terminology to refer to copyright infringement as actual theft, I say let's go ahead and call this a theft as well. We'd be closer to the truth.
So they have six more years to sue. Can they renew and is there any plan they will renew this? Even though RC4 is no longer recommended I don't see us moving away from it for another 5-6 years given many servers probably can't upgrade to newer ciphers (I am thinking about those old RedHat servers). Correct me if I am wrong though.
I think the patent has expired. Patent apps issued before June 8, 1995 have a 17 year term from issuance. 35 U.S.C. 154. This patent issued in May 1995. See "date of patent" in upper right corner of the pdf doc.
I've wondered, how does that prevent a generic version of the original from appearing? Clever marketing and control of their product isn't good but it's not evil.
Most generics are in fact manufactured by the original patent holder and sold to third parties (or in some cases marketed by a subsidiary with a different name). Setting up a manufacturing process for a drug is often non-trivial, so if the original manufacturer stops producing a drug, it may not be worth anyone else's while to (a) create a factory, and (b) get their version of the drug through safety testing, etc.
(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.)
> Setting up a manufacturing process for a drug is often non-trivial, so if the original manufacturer stops producing a drug, it may not be worth anyone else's while to (a) create a factory, and (b) get their version of the drug through safety testing, etc.
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.
It's not black and white. The US is particularly screwed because of loopholes in regulations that drug companies started exploiting in the late 90s to advertise direct to patients (illegal almost everywhere else). So you've got drug A which is going out of patent and A' which is A with something hanging off it that's harmless but counts as novel. So you switch gears and put all your marketing behind A' (including cherry picked studies). You can produce A cheaper than anyone else, but you don't have to. Anyone trying to enter the market with A risks you undercutting them, and meanwhile you're marketing A' against A.
Patent holders can, in some cases, sue for damages for acts that occurred up to six years in the past. But there's no new infringement or damages accruing after expiration.
Optimism please, they've beaten patents on appeal before:
> "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.
Even if they win, they've lost; the legal costs alone are silly and aren't paid for by the loser.
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.
The chief legal officer of Newegg _wants_ these cases and to take them to completion in attempts to correct the problems with software patents. One should be optimistic because Newegg is putting up the good fight and winning rather often. If it were almost any other company, you'd be hearing about a settlement if you heard anything at all. As a Newegg customer, I am glad that some of my dollars are going towards these kinds of legal costs and that's the type of thing that comes to mind when making decisions about where to buy.
this is the sole reason i rather buy from them instead of amazon. before those cases, i steered clear of newegg as i do of any merchant that bores me with coupons and rebates.
This is an excellent point! I hope everyone who cares about this issue is doing their part and voting with their dollars. Yes, donate to EFF, write to your congresscritter/senator, but also reward the business that invests money in causes that you care about. Sure, they are doing it to benefit their bottomline, but they could just as easily have paid that money to make the problem go away like so many other businesses did.
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.
Thank you for the reminder. I've been a long-time customer of them, but I had forgotten that this was one of the reasons. (How embarassing to admit that.) Even while reading this, my thoughts were, "Man, I'm glad Newegg is so awesome" -- rather than "I am glad I am spending my money there". Now I'm glad of both. ;)
If they won a previous case on appeal, and as micahgoulart observes didn't use a potentially valuable witness in this case. This suggests a strategy of bleeding out the patent trolls through their lawyers.
A troll's business model relies mostly on settlements, newegg can just keep selling computers.
> This suggests a strategy of bleeding out the patent trolls through their lawyers.
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.
If you don't stand up to a bully, then you will always be the victim of bullies.
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.
Don't get me wrong, I have a lot of respect for Newegg and what they're doing to this patent troll. This is also the exact strategy I'd take in this same situation if dealing with a patent troll, but nevertheless it's a horrible waste of time and money that could be better placed elsewhere.
Makes me wonder why we allow juries to hear patent disputes. Do they really understand patents and their terse wording? I would rather have a jury of individuals that would be able to read, code and test the same concepts that they are deciding on.
But some people claim the reason to use that district is because the jury pool does have knowledge and experience directly relating to patent matters. We see how that is turning out.
I've never had the pleasure of serving in a jury. How does it work? I have been under the impression that all jury members must agree on a single verdict? I know for a fact that I would not agree with this verdict. And I can't rationalize finding against Newegg here. Can someone who can see the other side (whether or not you agree) explain it here?
Thanks for that. It describes the sort of reasoning very well that the plantiff's attorney knows appeals to people in the area:
> 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.
Wow, pardon my french, but what the fuck is this article. This sounds like a paid advertisement. "The company, owned by Erich Spangenberg, of Dallas, is seeking a reasonable royalty of $5.1 million." How much did they get paid for that line?
Used in this context, "reasonable royalty" is a legal term that describes the money that is to be paid due to the infringement. I don't believe the author was making a judgement call on the fairness of the award.
I didn't get that. It spends roughly the first half presenting the TQP arguments and roughly the second half presenting the Newegg arguments. They sound like they might be quotes from the case's opening arguments.
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.
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.
Not really. You're going to want to sell your products in the US anyhow; the New Zealand market is tiny compared to the US market. If you sell your products in the US market, you have to play by the US's patent rules or your products won't be able to be imported (but as Samsung has found out, popular US based companies like Apple can get federal government intervention to veto an import ban on their products, but Samsung can't do the same: http://www.bloomberg.com/news/2013-10-08/samsung-loses-bid-f...).
What if the real money is in B2B and this is simply going to push the expenditure into a special trade communication zone? Are American companies going to be banned from certain expenditures? Is is it possible that people would create a proxy corporation to leverage the service in different areas?
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.
It says this patent covers using SSL with RC4. SSL dates back to Netscape, was released in 1995, and has no one involved in it has anything to do with the patent holder here. RC4 was designed in 1987 by Ron Rivest who also has nothing to do with this case.
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.
realtime means your algorithm is guaranteed within a certain window of time, even accounting for delays talking to memory, caches, etc. If it's okay to "drop frames" it is referred to as "soft real time", otherwise it is referred to as "hard real time".
You really have to read the claims to understand what the patent covers instead of trying to understand it from what is infringing. This patent has pretty easy-to-read claims. It essentially covers an encryption method where the encryption/decryption keys are updated (edit to correct my misreading) if a certain number of bytes are detected to have been exchanged. It's kind of a key-synchronization method.
US patent law counts as infringement making, selling, or using anything covered by the claims. NewEgg uses SSL with RC4 to secure their connections, the combination of which TQP contends, perform the steps covered by their claims.
Does the jury for a highly specialized patent case exist and function in largely the same way as a jury for other trials? Namely, "peers" instead of educated individuals on the particular topic at hand?
If that's the case, the United States needs some serious judicial reform.
Yes, juries are selected just like any other trial. They are educated on the relevant law and case law by the presiding judge and expected to serve simply as "finders of fact".
I'm not sure I agree that this is the actual problem with the patent system.
Perhaps someone who knows more about the legal system can help me understand something: at this point, it's well-known that these areas of Texas are good for patent disputes: they receive national attention, and a massive influx of spending as companies travel there to fight court battles.
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?
There are actually other districts that have higher win rates for patent trolls. One attorney told me that people use EDT simply because that district has built up a fair amount of knowledge and experience in this area of law, and thus the cases are cheaper to fight there. I don't know this to be true, this is just what I've heard.
If they've built up knowledge and experience, they ought to prove it by rendering verdicts that make sense. Maybe it's just a case of confirmation bias on my part, but it feels like they've got their heads firmly lodged up their asses over there.
> There are actually other districts that have higher win rates for patent trolls.
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.
this. It's not the win rate per se, it's the fact that the District Court judges and clerks are unusually experienced in IP litigation. You have to understand that in other districts the judges are doing federal criminal matters, civil class actions, debt collection abuse litigation, admiralty law (any slip and fall on a cruise ship is a federal lawsuit) and so on.
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.
Patent trolls like EDT because it's a "rocket docket". EDT judges speed up the process and it forces the defendants to play catch up. They can't spend as much time doing research on the patents. A shorter trial also limits the up-front costs for the patent trolls
I have no special legal knowledge, but I spent several years within spitting distance of this district, so I know the area, was in the jury pool, and as far as I know might still be close enough to be called as a juror.
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.
Indeed, he might as well have said "No other country would let me get away with the shit I'm pulling over on people right now." This whole situation is quite disappointing. Kudos to Newegg for trying, at the very least.
Bring a California company in front of a Texas jury, and call wild-haired Stanford visiting professor Diffie as a witness? I'm afraid this says more about the bigotry of the jury members toward Californians than it does about the case. My hunch is they (wrongly in so many ways) thought they would teach the hippie a lesson.
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.
I grew up and live in the lower right 1/3 of the US and his depiction is not that far off. Based on totally made up statistics that I'm pulling from my nether regions right now I'd guess at least one jury member had the exact thought the GP mentioned, while at least a few others just subconsciously would not lend credibility to the "dirty hippy."
I think you're absolutely right. In fact, the TQP lawyer went on the attack, which would be a miscalculation anywhere but Texas:
> 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.
I think Newegg was complacent, perhaps a bit cocky, bringing in the expert on encryption, pandering to the jury and going through a humorous exchange on his knowledge of it, thinking they had it in the bag after the shopping cart win.
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."
They had planned to appeal anyway if they lost. Getting a damage award reduced on appeal is relatively common. And the problem with taking about the award amount after arguing that the patent is flat-out invalid is that one can seem to be conceding the infringement argument.
IANAL, but it seems like a reasonable gamble to me.
Could NewEgg simply be wanting to escalate their appeal to a higher court, and thus have their eventual verdict carry more weight? This operates on the gamble that NewEgg believes they would be eventually triumphant and that the cost of a longer fight is less than the damages of a lower court. (Speculation, but perhaps reasonable, given NewEgg's previous victories.)
Newegg's strategy is to invalidate patents in order to discourage future litigants.
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.
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[ 2.7 ms ] story [ 149 ms ] threadBut, 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!
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.
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.
> "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.
Although, I disagree with the theory.
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.
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.
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...
https://twitter.com/ioerror/status/398059565947699200
Soft example: Video decoding.
Hard example: Mars rover.
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.
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.
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.
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...
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.