A battle won in the war against the software patent trolls

28-01-2013
Patent troll hires biggest law firms in the US in attempt to extract revenue from every on-line retailer (Amazon and Gap already settled for an estimated $60 million) - eventually loses "the mother of all patent battles"."Screw them. Seriously, screw them." Lee Cheng, Newegg Chief Legal Officer.

Patent troll hires biggest law firms in the US in attempt to extract revenue from every on-line retailer (Amazon and Gap already settled for an estimated $60 million) - eventually loses "the mother of all patent battles".

"Screw them. Seriously, screw them." Lee Cheng, Newegg Chief Legal Officer.

Anyone active anywhere in the field of software development will surely have strong feelings on the ongoing legal battles that I firmly believe are hindering innovation and siphoning away vast amounts of money away from true innovators to cynical manipulators of the US legal and patent systems.

Whilst I believe strongly that those who are creating new products, concepts and methods in any area of human endeavour should be protected from the unscrupulous exploitation of those methods by others, the process of fair protection of original ideas should not be subverted for gain or to damage competitors in an open market.

In this particular case an organisation called Soverain claimed to hold patents that effectively covered the use of 'shopping-cart' technology and felt it had a justifiable case to claim damages due to patent infringement right across the retail sector.

A number of large retailers (including Amazon and Gap) had already settled out-of-court with Soverain. A recent course case led to Soverain being awarded damages from Avon and Victoria's Secret of over $18 million plus a significant ongoing royalty from every future 'shopping cart' transaction.

The online retailer Newegg was the last man standing...

The organisation had already lost a case to Soverain (to the tune of $2.5 million) but decided to appeal. This appeal was on the basis that the judge for the original trial had not allowed the defence to put the argument to the jury that Soverain patents were in fact invalid.

On the basis of an advertisment for a "Electronic Shopping Mall" by Compuserve from the early 1980s (significantly pre-dating the Soverain's patents) this view was supported by the jury and the case was thrown out.

This ruling also nullified the previous rulings against Avon and Victoria's Secret.

I'd like to believe that this principled, successful stand by Newegg against the patent troll bullies (and finally a sensible, rational decision made by an East Texas court on this subject) is a major step towards a fairer industry.

Interview with Newegg Chief Legal Officer at Ars Technica.

I'll be raising a glass to Newegg next time there's a bottle open - hope you join me!

Scribbled by Ian



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