We've all complained about patent trolls, and how they are the bane of honest businesses that generally provide quality products. We all know about Worlds.com, which went after NCSoft for it's MMORPG City of Heroes, and the group going after Wizards of the Coast right now for having MGO. In general, these groups want to extract an out-of-court settlement, relying on the press that will be generated and the legal fees that will pile up.
Enter Soverein Software, a firm run to look legit. However, it is nothing more than a patent troll shell. It makes nothing. It produces nothing. It has no history since inception of having done anything but sue to have three patents enforced that would make online retailers pay 1% of every transaction in royalties. Those fees will add up.
They went after Macy's, Home Depot, Nordstrom's, Radio Shack, and a host of other online retailers that use the shopping cart. It claimed two patents, despite the concept being very basic on all these sites.
Newegg has a policy since 2007: Never, ever settle with patent trolls. To Newegg, patent trolls are the equivalent of state-sponsored terrorists, and like the United States will not negotiate. So in court, the lawyers duked it out. In the end, the jury came back and awarded Soverein a $2.5 million judgment, far less than the $34 million Soverein had asked for and above the $500,000 Newegg argued would be acceptable if infringement were found. The judge decided to award a damages-only trial on the third patent, which won't be going on after I go into the next section. The judge also dictated that the jury could not consider the defense that Soverein's patents were invalid, which led to an appeal.
Newegg fought back, even though being able to say to the next patent troll that they had successfully cut a previous case's request for money by 90%. Not very profitable, don't you think? They filed an appeal.
Soverein had several large victories between then and the appeal. Victoria's Secret, among others, had to pay large expenses for "infringement.
Those lawsuits are toast now, thanks to Newegg's appeal victory. The company didn't give up on the invalidity argument that it hadn't been allowed to make to the jury. Instead, it doubled down on it. The main piece of prior art used at the appeals trial was the CompuServe Mall, and Newegg's lawyers, led on appeal by Ed Reines of Weil Gotshal, argued that system hit each and every patent claim in Soverain's patents.
At district court, the judge hadn't even let those invalidity arguments go to the jury, stating there wasn't "sufficient testimony" on obviousness, and that it would be "very confusing" to them.
Soverain argued that CompuServe's system didn't include a "product identifier" as they define it in their patent, and that CompuServe lacked a "shopping cart database." Soverain also argued that its system was new and superior because it was adapted to the Internet, whereas CompuServe's system was a pre-Internet network.
So ladies and gents, a patent troll gets spanked. The world continues to turn, but justice prevails!
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Bit wordy for me to read first thing in the morning but the translation from "legalease" as first post asked is that newegg was sued on some bs grounds by Soverein Software for a few patents that essentially translate to "site uses a shopping cart for online orders."
Newegg originally lost the suit to the tune of 2.5 million (though that was a huge hit from the what the suit originally claimed) but was able to appeal and get the suit thrown out on the grounds that the patents made by sovereign were invalid.
Can't open the pdf atm otherwise I'd comment on it.
I've heard of patent trolls. They basically create a bunch of super generic patents and copyrights and sue, sue, sue. It's BS and I'm surprised this kind of crap is allowed. There's nothing wrong with creating patents, its that they are being made to exploit others. It's like trying to buy a domain name in the hopes that someone down the road will pay big bucks to have the domain, since it matches their name.
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I've heard of patent trolls. They basically create a bunch of super generic patents and copyrights and sue, sue, sue. It's BS and I'm surprised this kind of crap is allowed. There's nothing wrong with creating patents, its that they are being made to exploit others. It's like trying to buy a domain name in the hopes that someone down the road will pay big bucks to have the domain, since it matches their name.
its sucks that the legal system allows this sort of abuse, even though for the most part the law allows it in writing.
this is why i want the patent system abolished, its become a threat to innovation in many ways. patent trolls being one of those ways!
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I honestly don't understand the facts of this case. Could you please translate from legalese?
Soverein acquired patents that were vague as all hell. Pretty much if you ran an on-line store and had any type of processing for credit cards, you were "infringing" on the patents held. Essentially like all good patent trolls, they bought a patent that was purposely vague and used them to go after large companies, claiming infringement.
Soverein sued Newegg on these grounds. Newegg has a policy of not bargaining or settling with patent trolls, much like how the United States and other countries have a policy of not caving in to terrorist demands. They went to court, with Soverein's attorneys arguing that they should be awarded $34-million in damages for patent infringement, and Newegg arguing that $500,000 should suffice if the jury agreed any type of infringement had occurred. Newegg's attorneys wanted to argue that the patents were too vague (a concept similar to how a judge can nullify alaw if it is found "void for vagueness") and thus should not be enforceable, but the judge refused to allow the attorneys to argue that point for whatever reason. This alone was grounds for appeal of any ruling.
Now, since Soverein won the case but made only $2.5-million, it would make Newegg a less-than-prime target for future patent trolls because they had successfully taken off 90% of the request that Soverein's attorneys wanted. However, because of the legal issues raised in the appeal, it was granted.
On appeal, the company doubled-down on the invalidity argument, citing the CompuServe Mall as it's precedence. Soverein argued that the mall didn't have a product identifier or shoping cart, and was specifically adapted for pre-internet connections while their product was made for the internet. Those arguments didn't fly, and the patents themselves were declared borderline-invalid (dunno' how that works) which means that all lawsuits will no longer count.
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Kinda ties into the discussion in the erotic alters thread. Legal != ethical or moral. The law is often a very poor determiner of what is ethical or not
Patent troll cases rarely go to court... most are settled out of court because of the extreme legal fees that a company faces. It's always nice to hear about a patent troll losing, but so far... this is only the second patent troll I've heard about losing (there was this, and one a guy on a TED talk spoke about.)
I believe the Worlds.com case against NCSoft (and MMO companies in general) was "setlled" and dismissed because Worlds.com ran out of resources to continue.
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On appeal, the company doubled-down on the invalidity argument, citing the CompuServe Mall as it's precedence. Soverein argued that the mall didn't have a product identifier or shoping cart, and was specifically adapted for pre-internet connections while their product was made for the internet. Those arguments didn't fly, and the patents themselves were declared borderline-invalid (dunno' how that works) which means that all lawsuits will no longer count.
The first two patents were declared due to obviousness. IE anyone with a CIS degree and a bit of experience in the early 90's could have figured out how to translate a system of computer based commerce to the internet.
It would be like trying sue anyone who played Tic-Tac-Toe by stating the method for drawing the # sign was included in your patent. It's obvious how to draw #. (Think "Swipe to Unlock" for a similar recent real world example)
The 3rd was declared due to being predated. IE someone else already came up with that idea prior to their patent being filed but did not specifically file for their own patent.
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The first two patents were declared due to obviousness. IE anyone with a CIS degree and a bit of experience in the early 90's could have figured out how to translate a system of computer based commerce to the internet.
It would be like trying sue anyone who played Tic-Tac-Toe by stating the method for drawing the # sign was included in your patent. It's obvious how to draw #. (Think "Swipe to Unlock" for a similar recent real world example)
The 3rd was declared due to being predated. IE someone else already came up with that idea prior to their patent being filed but did not specifically file for their own patent.
I'll take your word for it. I'm criminal defense/Constitutional defense, not patents.
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Patent issues are worrisome no doubt, it's good to see patent trolls trounced
When Apple started suing Samsung I instantly gave away my iPhone and iPod and bought a Samsung phone. Patents are a fantastic system for people who come up with great ideas to get their due, but it has become far too easy a system to abuse. We need an overhaul.
I've heard of patent trolls. They basically create a bunch of super generic patents and copyrights and sue, sue, sue. It's BS and I'm surprised this kind of crap is allowed. There's nothing wrong with creating patents, its that they are being made to exploit others. It's like trying to buy a domain name in the hopes that someone down the road will pay big bucks to have the domain, since it matches their name.
Isn't that kind of like buying Magic product you don't intend to play for the purpose of selling them for big bucks when the netdeckers want power?
One of these things involves ready dishonesty. The other involves economics.
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Now, since Soverein won the case but made only $2.5-million, it would make Newegg a less-than-prime target for future patent trolls because they had successfully taken off 90% of the request that Soverein's attorneys wanted. However, because of the legal issues raised in the appeal, it was granted.
That's not how settlements work, though. Soverein comes to Newegg with a relatively small settlement sum and only when Newegg refuses to negotiate do they make the inflated claim of $34 million in court (and Newegg a conversely small sum).
Whether Newegg saved any money with a $2.5 million decisions after the legal fees is ambiguous. (We really don't know if they saved money or lost money.) The claims are so inflated its entirely possible that Soverein had only asked for a settlement in the ballpark of $2.5 million. This would not necessarily deter any future patent trolls.
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Enter Soverein Software, a firm run to look legit. However, it is nothing more than a patent troll shell. It makes nothing. It produces nothing. It has no history since inception of having done anything but sue to have three patents enforced that would make online retailers pay 1% of every transaction in royalties. Those fees will add up.
They went after Macy's, Home Depot, Nordstrom's, Radio Shack, and a host of other online retailers that use the shopping cart. It claimed two patents, despite the concept being very basic on all these sites.
Newegg has a policy since 2007: Never, ever settle with patent trolls. To Newegg, patent trolls are the equivalent of state-sponsored terrorists, and like the United States will not negotiate. So in court, the lawyers duked it out. In the end, the jury came back and awarded Soverein a $2.5 million judgment, far less than the $34 million Soverein had asked for and above the $500,000 Newegg argued would be acceptable if infringement were found. The judge decided to award a damages-only trial on the third patent, which won't be going on after I go into the next section. The judge also dictated that the jury could not consider the defense that Soverein's patents were invalid, which led to an appeal.
Newegg fought back, even though being able to say to the next patent troll that they had successfully cut a previous case's request for money by 90%. Not very profitable, don't you think? They filed an appeal.
Soverein had several large victories between then and the appeal. Victoria's Secret, among others, had to pay large expenses for "infringement.
Those lawsuits are toast now, thanks to Newegg's appeal victory. The company didn't give up on the invalidity argument that it hadn't been allowed to make to the jury. Instead, it doubled down on it. The main piece of prior art used at the appeals trial was the CompuServe Mall, and Newegg's lawyers, led on appeal by Ed Reines of Weil Gotshal, argued that system hit each and every patent claim in Soverain's patents.
At district court, the judge hadn't even let those invalidity arguments go to the jury, stating there wasn't "sufficient testimony" on obviousness, and that it would be "very confusing" to them.
Soverain argued that CompuServe's system didn't include a "product identifier" as they define it in their patent, and that CompuServe lacked a "shopping cart database." Soverain also argued that its system was new and superior because it was adapted to the Internet, whereas CompuServe's system was a pre-Internet network.
PDF of the ruling
So ladies and gents, a patent troll gets spanked. The world continues to turn, but justice prevails!
Captain, United States Marines
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Bit wordy for me to read first thing in the morning but the translation from "legalease" as first post asked is that newegg was sued on some bs grounds by Soverein Software for a few patents that essentially translate to "site uses a shopping cart for online orders."
Newegg originally lost the suit to the tune of 2.5 million (though that was a huge hit from the what the suit originally claimed) but was able to appeal and get the suit thrown out on the grounds that the patents made by sovereign were invalid.
Can't open the pdf atm otherwise I'd comment on it.
EDH:
Zur, The Enchanter
Modern:
Burn
Legacy:
Cheeri0s
Burn
its sucks that the legal system allows this sort of abuse, even though for the most part the law allows it in writing.
this is why i want the patent system abolished, its become a threat to innovation in many ways. patent trolls being one of those ways!
Twitter- RogueSource.
Decks: "Name one! I probably got it built In one of these boxes."
---------------------------------------------------
Vintage will rise again! Buy a Mox today!
---------------------------------------------------
[I]Some call it dig through time, when really your digging through CRAP!
Merfolk! showing magic players what a shower is since Lorwyn!
Soverein acquired patents that were vague as all hell. Pretty much if you ran an on-line store and had any type of processing for credit cards, you were "infringing" on the patents held. Essentially like all good patent trolls, they bought a patent that was purposely vague and used them to go after large companies, claiming infringement.
Soverein sued Newegg on these grounds. Newegg has a policy of not bargaining or settling with patent trolls, much like how the United States and other countries have a policy of not caving in to terrorist demands. They went to court, with Soverein's attorneys arguing that they should be awarded $34-million in damages for patent infringement, and Newegg arguing that $500,000 should suffice if the jury agreed any type of infringement had occurred. Newegg's attorneys wanted to argue that the patents were too vague (a concept similar to how a judge can nullify alaw if it is found "void for vagueness") and thus should not be enforceable, but the judge refused to allow the attorneys to argue that point for whatever reason. This alone was grounds for appeal of any ruling.
Now, since Soverein won the case but made only $2.5-million, it would make Newegg a less-than-prime target for future patent trolls because they had successfully taken off 90% of the request that Soverein's attorneys wanted. However, because of the legal issues raised in the appeal, it was granted.
On appeal, the company doubled-down on the invalidity argument, citing the CompuServe Mall as it's precedence. Soverein argued that the mall didn't have a product identifier or shoping cart, and was specifically adapted for pre-internet connections while their product was made for the internet. Those arguments didn't fly, and the patents themselves were declared borderline-invalid (dunno' how that works) which means that all lawsuits will no longer count.
Captain, United States Marines
"Peace through superior firepower."
Captain, United States Marines
"Peace through superior firepower."
The first two patents were declared due to obviousness. IE anyone with a CIS degree and a bit of experience in the early 90's could have figured out how to translate a system of computer based commerce to the internet.
It would be like trying sue anyone who played Tic-Tac-Toe by stating the method for drawing the # sign was included in your patent. It's obvious how to draw #. (Think "Swipe to Unlock" for a similar recent real world example)
The 3rd was declared due to being predated. IE someone else already came up with that idea prior to their patent being filed but did not specifically file for their own patent.
I'll take your word for it. I'm criminal defense/Constitutional defense, not patents.
Captain, United States Marines
"Peace through superior firepower."
When Apple started suing Samsung I instantly gave away my iPhone and iPod and bought a Samsung phone. Patents are a fantastic system for people who come up with great ideas to get their due, but it has become far too easy a system to abuse. We need an overhaul.
Isn't that kind of like buying Magic product you don't intend to play for the purpose of selling them for big bucks when the netdeckers want power?
One of these things involves ready dishonesty. The other involves economics.
Awesome avatar provided by Krashbot @ [Epic Graphics].
Whether Newegg saved any money with a $2.5 million decisions after the legal fees is ambiguous. (We really don't know if they saved money or lost money.) The claims are so inflated its entirely possible that Soverein had only asked for a settlement in the ballpark of $2.5 million. This would not necessarily deter any future patent trolls.