Newegg Given The Go Ahead To Pursue 'Douche Bag' Patent Troll For Fees

from the go-for-it dept

A few weeks ago, the Supreme Court smacked down the Federal Circuit (CAFC) for its made up rules that made it almost impossible to enable victims of patent trolls to get the courts to order the trolls to pay legal fees. As the Supreme Court noted, CAFC seemed to set up arbitrary rules for no reasons at all. And this is important, because courts almost never award legal fees, and with the untimely death of patent reform, hopefully this small change will at least help in the meantime.

Because of that Supreme Court ruling, CAFC has already sent one case back to the lower court to see if fees should be awarded. It's a case involving Newegg, the online retailer who has put a firm stake in the ground concerning its unwillingness to deal with patent trolls. In this case, a company called Site Update Solutions sued a bunch of companies, including Newegg. Newegg got out of the case and then sought to recover legal fees, but had that rejected... under the old rules. Now a chastened CAFC has sent it back to the district court to review.

Newegg is certainly happy about this -- putting out a press release with a quote from their top lawyer, Lee Cheng, about how they want to make life as difficult as possible for patent trolls who get in the way of innovative companies:

At Newegg, we've always believed paying off extortionists only encourages more extortion, and there had to be a negative consequence of suing Newegg without just cause," Cheng added. "We insisted on seeking a return of our legal fees from Site Update. We [believe] Site Update's demand that we waive our right to seek fees for dropping a lawsuit that should not have been filed in the first place was outrageous. What a joke. We believe that trying to make a patent troll pay, no matter what amount, sends the clearest possible message to all abusive patent asserters and their contingency fee lawyers that if they file a frivolous lawsuit against Newegg, they will suffer some consequence, even if it is only making less money or having to do more work than they planned to. This case also provides an excellent template for how a well-managed and organized joint defense effort allows participants to not just bask in the glow of beating a patent troll, but also save money compared to paying off a patent troll. We hope that our work will provide a beacon of hope for real innovators and honest entrepreneurs facing demands from abusive patent asserters. We want to encourage other defendants to create as much friction as possible, rather than feeding the beast with easy settlement checks."

In talking to Cheng directly (who is not known for holding back his opinions), he was even more direct in his feelings about patent trolls and having to deal with these lawsuits:

People who assert bad quality patents or demand ridiculous amounts of money for patents that do not add any value to society are douche bags. They have gotten away with their abusive practices far too long. I think I can safely say that our customer base approves of the spankings we administer.

As a Newegg customer, I can safely say I agree with that.

Filed Under: cafc, fee shifting, lee cheng, patent trolls, patents, supreme court
Companies: newegg, site update solutions