Insanity Rules In East Texas: Jury Finds Newegg Infringes On Ridiculous Encryption Patent

from the why-trolls-love-east-texas dept

There's a reason why patent trolls love east Texas -- and big part of that is that the juries there have a long history of favoring patent holders, no matter how ridiculous or how trollish. That was on display last night, when the jury in Marshall, Texas sided with patent troll Erich Spangenberg and his TQP shell company over Newegg. As we've been describing, Newegg brought out the big guns to prove pretty damn thoroughly that this guy Mike Jones and his encryption patent were both not new at the time the patent was granted and, more importantly, totally unrelated to the encryption that Newegg and other ecommerce providers rely on. Having Whit Diffie (who invented public key cryptography) and Ron Rivest (who basically made it practical in real life) present on your behalf, showing that they did everything prior to Jones' patent, while further showing that what Newegg was doing relied on their work, not Jones', should have ended the case.

But, apparently TQP's lawyers' technique of attacking Diffie's credibility somehow worked. The jury said both that the patent was valid and that Newegg infringed -- and they awarded TQP $2.3 million -- a little less than half of what TQP wanted, but still a lot more than TQP settled with many other companies (including those with much bigger ecommerce operations than Newegg). In other words, yet another travesty of justice from a jury in east Texas. Newegg will appeal, as it did in its last big patent troll lawsuit (which was much bigger), against Soverain Software. Again, Newegg had lost in East Texas, but prevailed big time on appeal. Hopefully history repeats itself.

Joe Mullin's coverage (linked above) has a bunch of little tidbits about how everyone responded to the verdict, but I think Diffie's response is the most honest. Asked how he was feeling:

"Distressed," he said. "I was hoping to be rid of this business."

Yeah, he's not the only one. The sheer ridiculousness of a jury simply not believing the very people who created the very building blocks of modern encryption, and instead buying the story of someone who did nothing special either with the concept behind his patent or with that patent once it existed, is just distressing. It shows how arbitrary jury trials can be, especially when you have jurors who simply don't understand the technology or the history at play. Blech. I think I may have to go buy an anti-patent troll t-shirt from Newegg.

Filed Under: cryptography, east texas, erich spangenberg, marshall texas, patents, whitfield diffie
Companies: ip nav, newegg, tqp

What Was That About Marshall Texas Becoming Less Popular For Patent Lawsuits?

from the and-the-numbers-are-in... dept

Over the last few months there's been some talk that Marshall, Texas was becoming less popular for questionable patent lawsuits. If so, someone hasn't told the patent hoarders. The Patent Troll Tracker has come out with his November Troll Call, noting that 244 companies were sued for patent infringement in eastern Texas alone, compared to 162 in Los Angeles, San Francisco/Silicon Valley, New York City, Chicago, Delaware, and New Jersey... combined. Of course, it is true that a number of the Texas lawsuits were against a large number of companies in a single shot, which helps that total get to be so large. However, there's a reason why those who are suing a bunch of companies at once all choose eastern Texas, and it's not because the district has suddenly become unfriendly to patent hoarders.

Filed Under: marshall texas, patent trolls, patents

Marshall, Texas Continues To Be Excessively Popular For Patent Litigation

from the eastern-texas-justice dept

A large part of the reason that the Federal Circuit Court of Appeals was established was that lawyers filing patent litigation suits were jurisdiction shopping, choosing district courts that were considered favorable for patent lawsuits. Of course, once the new court of appeals was set up, it just shifted the jurisdiction shopping one level lower -- and patent lawyers eventually settled on a favorite place: Marshall, Texas. Word spread quickly, as the court famously sided with patent holders at a much higher rate than any other court, and they also tended to speed through trials, so patent holders could get a fast decision. In some cases, those who were sued would settle rather than deal with an almost guaranteed loss in eastern Texas. While there have been some reports recently that (perhaps as a result of all the publicity), the folks in Marshall have started to get a bit more critical when it comes to patents, it appears that patent lawyers haven't quite figured this out yet. An anonymous attorney has started tracking where patent lawsuits are being filed and has discovered that Marshall far outranks the other courts -- especially when the case is being filed by a more questionable "patent licensing" firm. The report also notes that more patent lawsuits have been filed in Marshall this year than all of last year (during which more such lawsuits were filed than the previous two years combined). It still seems fairly ridiculous that companies that have absolutely no real presence in the region can bring their lawsuits in Marshall.

Filed Under: marshall texas, patents