For a few years now Newegg.com has made it policy never to settle with patent trolls. Following up from their victory over Soverain Software in January, who claimed to have invented the online shopping cart, now the retailer has scored another favorable verdict against French telecom equipment maker Alcatel-Lucent over a single patent covering "a way to exchange information with multiple users."
The case dates all the way back to 2009 when Alcatel-Lucent, using patents it acquired from Bell Labs when the latter shut down in 2006, sought to get $6 million from Overstock.com and $12.4 million from Newegg.com for allegedly infringing on three of its patents. But in 2011 a lower court's initial ruling said that the online retailers didn't infringe on any of the patents and even declared one as invalid. That was no small feat considering seven other retailers, including giants like Zappos, Sears, and Amazon had settled before going to trial.
For its appeal, Alcatel-Lucent decided to drop the other two claims and focused on reviving the one that had been killed in court, only to have the three-judge panel uphold Newegg and Overstock's win in just three days.
Ars Technica spoke with Newegg's chief legal officer Lee Cheng about the outcome of the trial and his views on patent trolls. "There's good news and there's bad news. The good news is, we won this case on every point. The bad news is, we're running out of lawsuits," he joked, adding that patent trolls are dismissing their cases against Newegg before any dispositive motions. That's a vindication of their decision to always fight frivolous lawsuits, as in the company's view, settling would only encourage others to come looking for their cut.
He went on to lament how Bell Labs' patents – a company with roots going back to Alexander Graham Bell – were sold off for "a few bucks" and now Alcatel Lucent is out to monetize them by throwing a big net and hoping to catch something. According to Chen, their approach has been threatening companies left and right, simply based on the fact that they own 27,000 patents, so there must be something they are infringing.
As a further example of how clueless patent trolls are regarding the technologies they're supposedly defending, Cheng noted that during trial, Alcatel-Lucent's corporate representative couldn't even name the technology or the patents it was suing Newegg over. "What a joke," he lamented.
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