Newegg Gets Patent Troll Macrosolve To 'Fold Like A Cheap Suit'

from the a-win dept

Among the worst of the worst patent trolls out there, Macrosolve had quite a reputation -- described as "worse than Lodsys" it took a sue tons of companies first, demand settlements later approach, based on an obviously ridiculous patent (7,822,816) for a "system and method for data management" that the company insisted, hilariously, covered any mobile app that used online forms where users could submit data. Yes, forms. For a patent filed in 2003 and granted in 2010. In a bit of a "cute" move, the company tried to pretend it wasn't a troll by doing a deal with... Donald Trump, which apparently suckered some in the press to claim that it wasn't a troll.

But it is a troll, and ended up filing over 75 lawsuits in (of course) the eastern district of Texas, following up the lawsuit filings with demands for licenses. In typical troll behavior, it made the licensing terms much cheaper than actually fighting the lawsuit (even if one were to win), so nearly all of the companies sued sucked it up and settled. However, Macrosolve included electronics retailers Newegg in its bundle of lawsuits, and, as we've noted in the past, Newegg has taken a clear "screw patent trolls" stance, where it absolutely refuses to negotiate with trolls.

Newegg has announced today, somewhat gleefully, that when faced with actually having to go to trial, Macrosolve has "folded like a cheap suit" dismissing its lawsuit against Newegg (and Geico, the one other company who fought back).

Lee Cheng, Newegg’s Chief Legal Officer stated, “In a sense, we are disappointed because we were robbed of an opportunity to prove in court that Macrosolve was and is nothing more than a serial, shameless abuser of patent rights, with a poor-quality patent that has not even survived its first reexamination. Macrosolve failed to create products and services that real customers found valuable, whose principals decided to turn it into a corporate parasite. It is not a coincidence that faced with its first real opposition in Newegg and Geico, Macrosolve folded like a cheap suit, and dismissed its lawsuits against all defendants.”

Cheng continued, “I could never figure out how Macrosolve would not be required to publicly and timely disclose the fact that its primary asset, the ‘816 Patent,’ was the subject of a final rejection in reexamination or that it dismissed almost all pending lawsuits with prejudice. What was most bizarre was how Macrosolve’s stock price traded up the day that the USPTO issued the final rejection of the ‘816 Patent’. Curious. Definitely worth someone’s attention.”

Yes, Macrosolve is a "public" company, in that it's an over-the-counter penny stock, so not only was the company looking to abuse the patent system to cash in, it appears that perhaps it was abusing the public equity markets as well. Either way, by demanding much less than it would cost to fight it in court, the company took in at least $4 million in settlements. Newegg is hoping to get back some of its own costs, though it expects Macrosolve to do everything possible to avoid that:

Newegg intends to seek all of its fees and costs against Macrosolve for its abusive litigation tactics. However, it is highly likely, in yet another example of how the patent law system is unfairly tilted against defendants, that even if Newegg were to prevail in court in its fee motions, that Macrosolve will simply file for bankruptcy after collecting and distributing over $4M in “licensing” revenue to its principals and its contingency fee lawyers.

Congress is, once again, promising to pass new legislation to stop patent trolls, and here's yet another example (in a very long list of them) why help is needed now.

Filed Under: eastern district, forms, patent troll, patents, texas, trials
Companies: geico, macrosolve, newegg

Case Appealed Because Jurors Were Allowed To Use Prosecutor's Laptop

from the that-doesn't-seem-very-smart dept

We've been seeing all sorts of odd issues in the courtroom as the court system comes to grips with modern technology like mobile phones and the internet, which introduces some new challenges. However, this one is really strange. Michael Scott points us to a story of a trial where the defendant appealed because the jury was allowed to use the prosecutor's laptop to review evidence without supervision, leading to questions of whether or not the jury was able to view other material that had not been entered as evidence in the case. The case itself involved a fight at a gas station, and the evidence on the laptop was the surveillance camera video taken of the fight. In an odd exchange, the prosecutor said he was fine with having the jury look over the laptop, he admits it's actually his son's laptop and probably didn't have anything else on it, other than his son's political science notes. For that reason, the appeal didn't get far, since the original court and the prosecutor had established on the record that there was nothing else related to the case on the laptop, but it still makes you wonder why the jury was allowed to use the prosecutor's laptop without supervision. Why not get another laptop? Also odd, is that I don't quite understand what the prosecutor means when he says he can't just take the CD with the video out of his laptop:

Your Honor, the CD is in my laptop. If they want to watch it, I don't have any problem with the CD they can't obviously watch anything without the CD. My concern if I take it out, shut down the computer I am not here there is no one to gather it back up. So I would suggest we leave it here in the event they want to look at it they come back and look at it.

Why couldn't they take the CD out and put it into another laptop?

Filed Under: juries, laptops, trials

Can There Be A Fair File Sharing Trial When The Language Is All Biased?

from the questions-questions-questions dept

In the past, we've discussed the various problems with the language choices by the entertainment industry in discussing file sharing. Terms like "intellectual property," "piracy," "theft" and even its descriptions of "losses" are all misleading and biased. This, in fact, is a key point in William Patry's upcoming book -- where he looks at how the language has been co-opted by the industry to pre-bias the casual observer (including journalists and politicians). Ben Jones is wondering if there can even be a "fair trial" for file sharers given this widespread use of biased language. It's a decent question, and goes back to an earlier point we raised about why the jury verdicts in the recent file sharing trials were hardly a good barometer on the public's understanding of copyright issues. When the industry has been so successful in choosing language that so clearly biases the casual observer (and is then able to exclude anyone who is actually knowledgeable about the subject from the jury), it shouldn't be any surprise at all that rulings will tend towards those who have been able to define the terms.

Filed Under: bias, file sharing, language, trials

IFPI Witness Used To Work For IFPI -- Is That Such A Big Deal?

from the it's-not-that-crazy dept

I think that anyone who reads Techdirt on a regular basis would recognize that we're pretty harsh on the entertainment industry and the way it goes about its business. Yet, there seems to be an unrealistic expectation that we should obviously slam the entertainment industry for every move it makes -- and if not, we're somehow wrong. That's simply untrue. While, yes, it is easy to trash the incredibly dumb things the industry does all of the time, that doesn't mean you should automatically jump to conclusions about the entire industry. Last week, in writing about how a lead investigator on the case against The Pirate Bay had taken a job with Warner Brothers after the investigation concluded, I suggested this wasn't as ridiculous or "shocking" as some made it out to be. As long as there was no additional evidence of questionable activities, switching jobs isn't that surprising. The industry has a long history of hiring former police investigators and prosecutors for its anti-piracy activity. That, alone, shouldn't be considered strange or questionable -- but a lot of folks immediately assumed that something nefarious was up. In fact, one commenter even accused me of being on the take from Warner. Given just how frequently I've totally trashed Warner Music's activities (in just the last year alone), including the faux epiphany of boss Edgar Bronfman, this seems rather laughable.

However, it is important to recognize that not everything is a conspiracy theory, and not every move the industry makes is as ridiculous as it's made out to be by critics. Totally overreacting to these things doesn't help the case of those of us trying to help educate the industry on why their strategy of suing fans and blaming piracy for their own inability to adapt and grow is a problem. So, while I'm sure I'll get beaten up over it again, the latest report that an expert witness in the Danish lawsuit against The Pirate Bay used to work at the IFPI still doesn't seem particularly shocking or troublesome. TorrentFreak, who normally has excellent coverage, continually paints this news as "shocking." However, I just don't see it. It's not surprising that a guy who used to work on IFPI investigations would go on to work at an anti-piracy company. And, just because he does so, it doesn't mean that he's obviously biased on their side (I certainly don't think fondly of all of my ex-employers). The simple fact is that any expert witness has a bias. They're hired to help support one side of the case. So, of course he's going to present the IFPI's case in the best light. That's what he's paid to do -- and the court should take that into account. The fact that he used to work for the IFPI seems rather meaningless.

Filed Under: experts, hiring, recording industry, trials
Companies: ifpi

UK Politician Believes News Organizations Should Hide Articles During Important Trials

from the where-theory-meets-reality-and-reality-laughs dept

A former Lord Chancellor in the UK (who was in charge of running the legal system, apparently) is suggesting that on certain important lawsuits, news organizations be forced not to report on the case and to remove any articles in archives that could influence the case, as he's worried about the articles influencing the outcome. This, of course, is similar to the story we were discussing yesterday, where a California court forced Wikileaks offline so it wouldn't influence a Swiss lawsuit. Of course, the response to that should be instructive of what would happen in the UK. Almost immediately, people started mirroring the content and making sure it was widely available. In fact, the very effort of trying to hide that content drove much more attention to it -- something that should come as no surprise to those familiar with the Streisand Effect. Also, thanks to the internet, where anyone can effectively report on any topic, it's impossible to see how the UK would successfully ban and block any reports on these particular cases. Sure, it's nice in theory to say that you don't want reporting that would influence the outcome of a case. Unfortunately, reality is unlikely to cooperate with that theory.

Filed Under: banning, censorship, news, trials