NewEgg butts another patent troll off the bridge
April 3, 2014 | 5:50 pm
When I ordered my clattery new Cherry MX Brown-springed mechanical keyboard at NewEgg, and it arrived yesterday, I wasn’t thinking of NewEgg’s tireless efforts when it comes to fighting patent trolls. But perhaps I should have been. Ars Technica reports on their latest victory, against a company called Macrosolve which claimed to have patented the ability to use questionnaires in a mobile app.
Although it had formerly actually produced real products, Macrosolve at this point is merely a patent troll making a hand-to-mouth living shaking down companies for settlements and immediately paying them out to cover legal fees and investors. After a coalition of companies including NewEgg and Geico opposed Macrosolve in court rather than knuckling under and paying the settlement it requested, Macrosolve saw its patent get invalidated by the patent office. Macrosolve has vowed to appeal the invalidation, but in the meantime dismissed all its pending litigation. Its stock is currently trading at 1 cent.
It’s worth noting that Macrosolve only asked for $50,000 to $100,000 in settlement fees—decidedly the cheap end of the scale. It cost NewEgg almost $500,000 to fight it out in court. But NewEgg’s take-no-prisoners “millions for defense but not a penny for tribute” attitude when it comes to patent litigation meant the company really didn’t see any other option. NewEgg’s Chief Legal Officer Lee Cheng sees bowing down to patent trolls as effectively akin to negotiating with terrorists. Show you’re willing to settle and they’ll all pile onto you. Cheng has said:
"We’re not terribly qualified to evaluate the specific technical merits of a patent. But if anything, we don’t really have a policy, but we have a practice of not settling and paying money out just to avoid the cost of defense. We think that paying money just to avoid the cost of defense every time someone says that you’ve done something, and you don’t think you’ve done something wrong… invites more lawsuits."
Contrast that to Amazon, who patented the idea of instantaneously ordering something with a single click, and maybe you get some idea which company might be the better one to patronize when it comes to products that they have in common, like computer parts. Patent-busting like NewEgg’s deserves to be rewarded.
The nice thing is, if you’re already a member of Amazon Prime, you can get the same no-extra-cost 2-day shipping benefits from NewEgg free for a whole year, so you don’t even have to feel like you’re giving something up. NewEgg’s shipping partner ShopRunner is still offering one free year of membership in its service to customers who can prove they’re currently members of Amazon Prime. (After you sign up, they will have you take a screenshot of a screen from Amazon verifying it and email it in.) ShopRunner even promises it won’t do the sneaky trial-offer thing of charging your card automatically when it’s time to renew, and it’s got 84 other partners besides NewEgg where it might also come in handy.
When I ordered my nifty new keyboard, I was really only thinking of trying out my ShopRunner membership, and NewEgg had the better offer on the keyboard I wanted. But now I’m doubly glad I bought it from them. From now on, with that reminder fresh in my head, I think I’m going to start shopping NewEgg first. At least for the next year or so…
They’ve been there and done that. Maybe I should buy the T-shirt.