In the company’s continued efforts of not agreeing to settle with any patent trolls, Newegg has once again defeated a patent troll in partnership with GEICO to fight off BS patents and patent claims. In a blog post titled, Patent Trolls, They Fold Like a Cheap Suit When Faced With Trial, Newegg’s Chief Legal Officer,Lee Cheng talked about the company’s latest run in with a patent troll from the mecca of patent trolls, East Texas. The litigant, Macrosolve, started this series of litigation in 2011 with a filing of more than 75 lawsuits in the Eastern District of Texas against companies from all different types of industries. They claimed that these companies were distributing electronic forms over the internet or to mobile devices and then collection reviews and the responses would be liable for patent infringement. And as Newegg’s Lee Cheng states, with such a broad definition, virtually no company is safe from such a ridiculous patent.
Because Macrosolve is a patent troll, their plan was to sue a dozen or two companies at a time and offer them to settle. These settlements netted Macrosolve more than $4 million in settlements, while Newegg and GEICO held out and fought back. This is primarily because most companies’ lawyer fees if they were to go to court would be greater than if they were able to agree to a settlement. This mentality and legal climate is what enables these patent trolls to continue to exist and extort companies of all sizes. However, many of these patent trolls go after companies that they believe will settle rather than take them to court.
Lee Cheng also 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.” He 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.”
So, even though the court dismissed all of Macrosolve’s claims against Newegg, Newegg still itends to seek all of its fees and costs against Macrosolve for abusive litigation tactics. However, because of the way of how these patent trolls are created and maintained, even if Newegg were to win these claims of fees and costs against the patent troll they would simply file for bankruptcy after paying out the $4m they’ve paid out to their principals and lawyers. The real truth is that nobody is being held accountable for these patent trolls litigation and that no individual is being held accountable for their actions. We need patent reform for a lot of reasons in America and this is clearly one of them. Hopefully this will ruin Macrosolve’s patent claims in future litigation so that others can simply point to Newegg’s dismissal and not waste legal resources and money on court.