East Texas Court Finally Issues Newegg Order Two Years Late; Judge Upset About How Newegg Handled Things

from the might-want-to-look-in-the-mirror dept

Thu, Jul 16th 2015 12:42pm — Mike Masnick

Last week we wrote about an incredible situation in East Texas, where Judge Rodney Gilstrap had not issued a ruling in 20 months on a filing by Newegg concerning a ridiculous jury decision. As we had noted, everything about the case was fairly ridiculous. The patent in question, 5,412,730, was ridiculous and never should have been issued in the first place. The troll who owned it, TQP, should never have been allowed to shake down hundreds of companies by claiming that anyone encrypting web traffic infringed. TQP was able to bring in $45 million in settlements from this one bogus patent alone. Newegg brought out the biggest names in encryption to point out that the patent was bogus, and also pointed out that even if the patent was valid, it clearly did not infringe. No matter, the East Texas jury still sided with the troll, because that's East Texas.

Newegg, in response, asked Judge Gilstrap to basically overrule the jury, and issue a "Judgment as a Matter of Law" (JMOL) which is basically the judge saying that the jury got the law wrong in determining its verdict. And then... nothing. As new things happened in related cases, Newegg filed updates with the court, as kind of a nudge. Newegg had vowed to appeal the case, but was procedurally unable to do so until Gilstrap ruled one way or the other on the JMOL. So, eventually, last week it took the somewhat extreme step of filing a Writ of Mandamus with the appeals court, basically asking it to order Judge Gilstrap to do his job and issue an order.

TQP quickly filed a weak and silly opposition to the writ, not addressing the actual issues raised (because what are they going to argue -- that the judge should never rule on the case?). And before Newegg could reply, it appears that someone in Judge Gilstrap's office finally woke up and issued an order, siding with Newegg in the JMOL. In short, after doing nothing for 20 months, leaving everyone hanging on a jury verdict over this bogus patent, and ordering Newegg to pay $2.3 million, the court said, "Oh yeah, jury wrong, no infringement":

The Court concludes that under either Newegg's or TQP's interpretation there was not a showing of substantial evidence that the claim limitation is infringed.

In other words, no infringement, the jury was just wrong, everyone get on with their lives. Seems like this could have happened quite a long time ago, no? At the end of the filing, Judge Gilstrap finally addresses this issue and rather than being apologetic, he appears to be pretty angry at Newegg. As for why this happened? Well, that gets buried in a footnote:

After Newegg’s Petition for Mandamus was docketed in this case, the Court, among other actions, immediately asked the District Clerk to investigate why its systems had failed in this case, both to understand the issue and to, hopefully, determine a way to prevent such an occurrence in future. District Clerk David Maland forwarded his findings to the Court:
I am responding to your inquiry of July 8th as to why defendant Newegg's posttrial motions have not been appearing on the 6 month CJRA pending motion report. Upon inquiry, it was discovered that an order staying Case No. 2:11-cv- 428, a case with a similar number, was inadvertently docketed in the instant case on June 7, 2013 (docket entry #242 - see attached screen shot; erroneous order also attached). A note was made by the docket clerk at that time that the stay order was filed in error, but she neglected to lift the stay flag in the database. The bottom line is that a stay was created when the erroneous order was entered in this case and the stay flag remained in place until it was discovered and removed on July 8, 2015. This prevented any pending motions in this case from showing on your pending CJRA motions report during that time period.

Please accept my deepest apology for this situation. We have advised the deputy clerk in question of her error and have taken curative actions designed to avoid repetition of this kind of error. Please contact me if you have any questions.

So, yes, there's an apology there from the court clerk, but you'd think that the judge might want to issue one as well. But, no, he goes... the other way, scolding Newegg.

The Court is aware that more time has passed since the briefing has been complete on Newegg’s Motion than is optimal. However, although approximately 20 months have passed since the trial in this case, the time at which Newegg’s Motion for JMOL was fully briefed and Newegg’s Supplements were before the Court—the point in time where these matters typically would have been decided—was approximately 12 months ago. While Newegg did file an electronic notice with the Clerk’s office during this time (approximately 8 months ago), this is the sole action that Newegg has taken. Never once in this time has counsel for Newegg directly contacted the Court’s staff inquiring about this matter. How this situation could simultaneously be so prejudicial that a resort to mandamus might be considered while, at the same time, Newegg could not be troubled to pick up a phone and call the Court’s staff is baffling.

Finally, the Court intends to address, by written opinions, the issues that it has carried within a reasonable time. The Court, like most courts, has a busy docket, which periodically may cause more time to pass in a particular case than is optimal. In the future, the Court suggests that the parties themselves would be better served (and costs reduced) if they elected not to shoot first and ask questions later.

This is both misleading and ridiculous. First of all, Newegg repeatedly (four times) had filed additional information with the court, which you'd think should be sufficient to remind the court that it has a pending issue to attend to. And while it is true that Newegg's lawyers did not call the court clerk to find out what's up, Newegg's chief legal officer, Lee Cheng, says that's because basically everyone warned them that the East District Court does not look kindly on parties reaching out to the court in such a manner. Cheng tells me:

I asked my counsel to do everything possible to expedite judgment. Since pretty much the verdict was delivered. I’d specifically inquired whether we could/should call and/or write and/or file a notice on a monthly basis politely reminding the Court that we were awaiting judgment, if for nothing else but to build a record. I was specifically advised by counsel and local counsel (based on his knowledge of local practice) that the Court would likely not look kindly on repeated reminders to issue a judgment. We reminded the Court as frequently as we dared—4 times.

We asked. We asked. We asked. We asked. We were advised strongly to avoid ex parte and/or repetitive (after 4 attempts) requests. Then we filed a very respectful Mandamus petition, almost 15 months after the final briefing on a renewed JMOL motion. Newegg did not attribute any ill intent or will as the cause of delay. Hardly a “shoot(ing)” and not even remotely, under any objective standard, premature.

Separately, Cheng responded to Gilstrap's closing whine that his docket is so busy that this one slipped through the cracks, by noting that there are ways to deal with that:

I would continue to suggest, with utmost respect, that his incredibly busy docket could be lightened if he were to grant venue transfer motions more frequently that are almost certainly supported under binding Supreme Court precedent, and if he and his clerks didn’t have to deal with extra motions seeking permission to file Section 101 challenges to patent validity permitted under Alice.

In other words, maybe it's time for East Texas to give up its reputation as welcoming patent troll lawsuits at every opportunity and send those lawsuits, that are clearly about jurisdiction shopping, to other courts where they can be handled more efficiently.

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Filed Under: east texas, encryption, patent trolls, patents, rodney gilstrap, writ of mandamus
Companies: newegg, tqp

25 Comments

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Mason Wheeler (profile), 16 Jul 2015 @ 12:59pm

Counsel: Be careful with all this; the judges around here don't like being pestered.
Newegg: *waits 2 years* ...Mandamus, please?
Judge: HOW DARE YOU PESTER ME!!!
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Anonymous Coward, 16 Jul 2015 @ 1:13pm

Re:
Well, at least the judge was impartial while being angry at the pestering NewEgg.
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kP (profile), 16 Jul 2015 @ 1:23pm

East Texas justice, LOL
In case you're wondering what your dealing with in East Texas, look now further then Louie Gohmert

https://www.youtube.com/watch?v=DE4fCcsw6Fs

How the hell this guy EVER made it to be a judge or to Congress is beyond my comprehension.
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Brad, 16 Jul 2015 @ 1:28pm

newegg fanboy thanks to their legal team
"I would continue to suggest, with utmost respect, that his incredibly busy docket could be lightened if he were to grant venue transfer motions more frequently that are almost certainly supported under binding Supreme Court precedent, and if he and his clerks didn’t have to deal with extra motions seeking permission to file Section 101 challenges to patent validity permitted under Alice."
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Spaceman Spiff (profile), 16 Jul 2015 @ 1:28pm

It's all about the $$
No doubt the courts in east Texas rake in million$ each year from these frivolous suits. They are unlikely to give up the income easily.
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Coyne Tibbets (profile), 16 Jul 2015 @ 1:39pm

Why was TQP so quiet?
It occurrs to me to question why TQP didn't inquire as to the status of the case. After all, so long as Neweggs' motion was outstanding, TQP wasn't getting their money. If they were so sure of their position, surely they would want the court to rule so they could collect their award.

Their apparent lack of interest in doing so rather suggests that TQP figured they had a loser and wanted the case to remain in limbo forever, so they could continue to collect royalties from other companies in the meantime.

The cynic in me wonders: could it possibly be that the delay was arranged?
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Brian (profile), 16 Jul 2015 @ 1:40pm

This clerical error could have easily been avoided with basic workflow technology where all parties to a case can see the current status of motions and rulings. Newegg would have been able to see that there was an order staying the case and could have made contact asking why and it would have been resolved right then-and-there.
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Former litigator, 16 Jul 2015 @ 2:03pm

Re:
District courts use PACER/CMECF for electronic filing and docketing. Both are extremely able at showing case statuses.

The problem here isn't CMECF/PACER: the stay on those systems was visible and rectified. The problem here is there was a second technology used on top of those systems that had its data independent of them. So any change made in CMECF/PACER would have to also separately be made in the second system, and the assistant clerk apparently failed to do that.
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Anonymous Coward, 16 Jul 2015 @ 3:20pm

hands up all those who expected the Judge to actually admit he was wrong? what? no one? how surprising!!
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MDT (profile), 16 Jul 2015 @ 6:17pm

Simple solution going forward...
...if you submit a piece of paperwork in Gilstrap's court, and he doesn't respond in a reasonable time (say, two months), begin calling his office once a month.

When he asks you to show cause why you shouldn't be sited for contempt of court for exparte communications, print out his whiny self serving rant and submit it to show he told you to call his office.

Problem solved.
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Anonymous Coward, 16 Jul 2015 @ 7:29pm

Somewhat lost in all this is that Newegg BEAT the copyright trolls! Yay, Newegg! Yay, justice!
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Anonymous Coward, 16 Jul 2015 @ 7:36pm

This IS Texas
"...the parties themselves would be better served (and costs reduced) if they elected to shoot first..."
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Mark Syman, 16 Jul 2015 @ 9:49pm

Ooooooh! Curse you, Newegg! *stamps foot repeatedly*
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Jeremy Lyman (profile), 17 Jul 2015 @ 4:24am

Re:
They haven't beat them till they get their money back.
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Anonymous Coward, 17 Jul 2015 @ 4:58am

Re: East Texas justice, LOL
Informed voters - that's how /s
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Anonymous Coward, 17 Jul 2015 @ 4:59am

Re: Re:
They haven't actually paid yet have they?
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W. S. Huff, 17 Jul 2015 @ 7:33am

As a former law clerk to a federal judge, I wondered how this motion managed to avoid the 6-month report. When I was clerking, every month I'd receive a list showing all cases on my docket that had motions which needed to be addressed to get them off the 6-month report. It was a constant battle to keep up and keep that list clean. Nobody wanted to be the clerk responsible for an old motion. Twenty months is crazy.
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nasch (profile), 17 Jul 2015 @ 8:28am

Re:
Judge: HOW DARE YOU PESTER ME!!!

More like YOU SHOULD HAVE PESTERED ME OVER THE PHONE!!
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nasch (profile), 17 Jul 2015 @ 8:30am

Re:
hands up all those who expected the Judge to actually admit he was wrong?

Of course the judge admitted he was wrong! It's just that "he" refers to Newegg's lawyer.
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nasch (profile), 17 Jul 2015 @ 8:31am

Re:
Somewhat lost in all this is that Newegg BEAT the copyright trolls!

Hooray indeed! But it's a patent troll.
[ link to this | view in thread ]
Anonymous Coward, 17 Jul 2015 @ 9:27am

Re: Why was TQP so quiet?
exactly! was the grease ball Rodney Gilstrap getting some kickbacks (so to speak)?
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Anonymous Coward, 17 Jul 2015 @ 10:16am

Patent troll bought off the jury like so many east texas juries before.

Troll bought off the judge hoping Newegg would just 'somehow' give up.
the utter bullshit anout misfiled dockets is unbelievable.

Someone needs to investigate the judges recent purchases and 'suddenly obtained' partial ownership of this troll....
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Jeremy Lyman (profile), 17 Jul 2015 @ 10:16am

Re: Re: Re:
I'm sure they've paid their lawyers. They win by making the troll incur the whole cost of baselessly dragging people to court.
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Anonymous Coward, 17 Jul 2015 @ 6:35pm

Re: 6-months list
It says in the footnote in the order: A docketing clerk accidentally entered a "stayed" flag on the case. Motions from stayed cases don't show up on the CJRA reports (aka 6-months list report). Those reports are public (http://www.uscourts.gov/statistics-reports/analysis-reports/civil-justice-reform-act-report) and Judge Gilstrap hasn't had any motions on his 2014 CJRA reports.

My guess is that's what Judge Gilstrap means by "shoot first" -- Newegg knew (or could have checked via a google search) that their motion wasn't showing up as pending. Yet, instead of calling the clerk or court to find out why, they filed a mandamus.
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Anonymous Coward, 20 Jul 2015 @ 3:29pm

Re: Re: Why was TQP so quiet?
I really doubt it.
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