TE
TechEcho
Home24h TopNewestBestAskShowJobs
GitHubTwitter
Home

TechEcho

A tech news platform built with Next.js, providing global tech news and discussions.

GitHubTwitter

Home

HomeNewestBestAskShowJobs

Resources

HackerNews APIOriginal HackerNewsNext.js

© 2025 TechEcho. All rights reserved.

How Newegg crushed the “shopping cart” patent and saved online retail

638 pointsby govind201over 12 years ago

39 comments

dankohn1over 12 years ago
I founded NetMarket [1], which actually did build the first shopping cart on the web in August 1994, 5 months before OpenMarket launched and filed their application. I was deposed in the 2004 Amazon case due to an email Amazon discovered from Open Market to NetMarket demonstrating that they were aware of our site. Unfortunately, I didn't have screen shots or source code definitively demonstrating our work, and Amazon decided to settle for $40 M.<p>My congratulations to Newegg for their courage and resolve in standing up to Soverain. At NetMarket, we were proud of ourselves for figuring out after a few days that we couldn't put the state of the shopping cart items in the URL, since you lost it with the back button, and so we needed to use a state ID in the URL as a key to the database. The idea that this was patentable was and is absurd.<p>[1] <a href="http://news.cnet.com/E-commerce-turns-10/2100-1023_3-5304683.html" rel="nofollow">http://news.cnet.com/E-commerce-turns-10/2100-1023_3-5304683...</a>
评论 #5127290 未加载
pgover 12 years ago
These were Open Market's patents? OM tried to get us to license one of them in about 1997. They didn't try very hard though. I told the OM guy who called me that I thought the patent was invalid, and he said "ok" and then asked if we were hiring.
评论 #5126229 未加载
评论 #5127090 未加载
评论 #5126834 未加载
NelsonMinarover 12 years ago
It seems unfair somehow that our whole industry benefits from Newegg individually taking on the risk and expense of bringing a patent to litigation and appeal. Maybe more patents would be challenged if there were more cooperative efforts to bust bad patents.
评论 #5126551 未加载
评论 #5126338 未加载
评论 #5126532 未加载
评论 #5126529 未加载
评论 #5126366 未加载
Whitespaceover 12 years ago
It seems that almost all patent troll cases are tried in the East District of Texas because that district had strongly favored plaintiffs. I'm then curious: if a US company refused to do business with Texas citizens -- citing an inhospitable litigation environment or some such -- could they still be brought to court in EDTX?<p>Continuing the thought experiment, what if companies continued to do business but added a surcharge to products shipped to troll-favorable districts? It seems that the jurors in those areas would be more intimately aware of patent trolls if they had to pay a 1% extra fee when they ordered Avon products.<p>I'm sure some companies do such a thing and just bundle it up with the cost of the product itself, but I'm curious if any companies took a more forceful stance.
评论 #5126658 未加载
评论 #5127131 未加载
评论 #5127918 未加载
robomartinover 12 years ago
From the article:<p>"The American justice system has issues, but it fundamentally works. The jury system is sound. Juries are people of good will and have common sense."<p>This system "fundamentally works" if you have the money to make it work for you. Most individuals, small and medium businesses simply cannot afford the cost of seeking justice. In my opinion this is true of civil, business an criminal law.<p>Example:<p>Back when I was younger and far dumber I client stiffed me for about $125K of work. Of course, off I went to a lawyer. By the time I spent about $8,000 in legal fees I realized that all I was doing was paying for my attorney and their attorney to write what I came to call "love letters" to each other. I called them "love letters" because every time they wrote one, regardless of content, they got paid handsomely by both parties. I decided to lick my wounds and move on. Good thing I did. The client ultimately filed for bankruptcy protection and stiffed a bunch of other businesses out of hundreds of thousands of dollars. They formed a new corp pretty much in parallel and have been operating ever since.<p>Would money have made a difference here? Maybe. Don't know. I had a similar situation with a large (multi-billion dollar global corp) that cause us huge damage. There was simply no way to go after them without putting-up at least $500K in the bank for legal fees. Not a fight I could have considered. And so, even though they were decidedly in the wrong, they, effectively, "wrote their own laws" or were able to ignore them because they could fight a fight I couldn't even begin to consider.<p>What I do know is that it sure felt like there was a huge asymmetry in justice. It's almost like one can exist in this parallel universe where the practical result was that laws simply were not applied in the same way to those with less money to "buy" justice.
glesicaover 12 years ago
I love the non-lawyerly language... "screw them, seriously, screw them". So refreshing to hear a corporate guy speak like a human being instead of a highly trained PR bot.
评论 #5125892 未加载
lukejduncanover 12 years ago
&#62; That was OpenMarket, a software company that originally created these patents before going out of business in 2001.<p>Whenever exec's talk about needing to file patents for "self defense" I always think of cases like this. I don't know anything about OpenMarket, but I'm guessing they had similar logic. Then they go belly-up and these toxic patents make their way into a trolls portfolio.<p>No matter the company, IMHO, it's generally best to abstain from any patent fishing expeditions.
评论 #5126134 未加载
评论 #5126167 未加载
评论 #5126273 未加载
bentonerover 12 years ago
<i>The company won't hire law firms that take on patent troll cases, and its top lawyer, Lee Cheng, is vocal about his view that others should take the same approach.</i><p>Is there a site somewhere listing which firms represent patent trolls?
评论 #5126807 未加载
评论 #5126781 未加载
评论 #5128154 未加载
arbugeover 12 years ago
Comparing patent trolls to bacteria would be an unforgivable and entirely unwarranted insult to bacteria everywhere. Even the plague bacterium deserves better.<p>We need to see alot more of this happening - hopefully this will show people there is another way to go, i.e. never ever settle with a patent troll, no matter how scary the alternative may seem to be. 3 patents invalidated but thousands to go. It is disgusting that these trolls managed to collect so much money before their garbage patents were ruled as such.
评论 #5126445 未加载
评论 #5125965 未加载
robomartinover 12 years ago
We need more of this. A lot more. We also need to stigmatize law-firms willing to take-on patent troll clients.<p>Looking at the companies who got sued by these trolls one can only wonder why it is that these companies don't unite to create a legal and financial firewall of sorts to go against trolls each and every time they stick their heads out of the slime they live in. All you really need is for trolls to be summarily destroyed for a few years to create the conditions for change.<p>I have not bought anything from Newegg in a long, long time. Sometimes I almost instinctively just buy through Amazon. Now it will be different. Because I admire, respect and appreciate what Newegg did here I will do my small part and move whatever business I can their way. It's my own little way of saying "thank you" to a company that didn't just stand-up for themselves but rather for all of us.<p>Maybe if enough of us chose to vote with our cash more companies might be convinced to fight trolls rather than cave in.
kissickasover 12 years ago
Great news. I was surprised to read that in a way similar to the Apple case against Samsung, the judge (in the Apple case, it was the foreman) told the jury to completely ignore the validity of the patents in District Court. It still makes absolutely no sense to me, so if someone could fill me in I would appreciate it.<p>I read that the judge said jurors would be confused... is this normal in any other type of case? Not a satisfying explanation.
评论 #5126060 未加载
评论 #5129818 未加载
评论 #5126011 未加载
Glaydenover 12 years ago
Kudos to Newegg, but this system is sooo very broken and badly in need of reform.<p>Large established and heavily profitable organizations like Newegg might be able to pull this off, but what about all the small startups that are forced into bankruptcy by settling when the trolls come knocking? They don't have the resources to put up a fight. If larger companies tend to fight the tedious and expensive legal battles or avoid getting harassed by other companies by building up their own stash of patents that they can use to retaliate, in the long term what it really does is incentivize companies to go after larger numbers of smaller fish that can't put up a fight.
c0nfusedover 12 years ago
To celebrate this I am going to go buy some expensive electronics from newegg.
评论 #5126192 未加载
评论 #5126056 未加载
creamyhorrorover 12 years ago
A victory for common sense, the tech industry, and right-thinking citizens everywhere. May the gods of the market continue to smile upon Newegg (a prosperous Lunar New Year to them!).<p>Points of interest to me:<p>Lee Cheng: <i>And we'll take a case through trial as a matter of principle because we want to accomplish the purpose of making good law. Like eBay did, like Quanta did when they challenged LG. It's part of our duty as a good corporate citizen to try to accelerate the rationalization of patent law.</i><p>This guy talks like a crusader for just law instead of an executive or business owner. You'd pretty never hear this from anyone in a public company, it just wouldn't be possible. More's the pity that most people can't really achieve big results like this; we have to retain ownership of our businesses in order to really live out our principles.<p>-<p>A commenter on Ars, on why no one else fought Soverain to the end:<p><i>I think the problem from most defendants' perspective is that they can just pass the costs along to their customers without facing any strategic disadvantage. Compared to its competitors, does Newegg winning this lawsuit give them any competitive advantage? After all, their competitors are no longer subject to paying for the invalidated settlements either.<p>By paying the settlements, the companies reinforce an awful system, but they also don't need to face the volatility and potential cost of a jury-trial in districts cherry-picked by the trolls. By going to trial, the defendant only stands to maintain patent troll cost parity with their competitors (if they win and invalidate their competitors' settlements)- or they lose and get hit with a judgment that could be extremely costly.<p>Further, in most organizations, management risks the ire of their shareholders should they elect to go to trial and lose. They're again put in a situation where their personal risks outweigh any benefits they stand to gain. Even for executives that consider themselves ethical, they can still rationalize that minimizing risk to the shareholders is the ethical decision.</i><p>-<p>This seems true enough - from a (rational) game-theoretic perspective, why should any victim really fight hard to overcome a troll, if in doing so they risk big losses, and don't gain any advantage over their competition <i>even if they win</i>? The main potential upside is that consumers and potential partners will view them more favorably and give them more business (as is happening now), but this is a very unreliable bet to make. The downsides of "doing the right thing" are very likely greater than the upsides.<p>The main motivator to fight the trolls has to be personal principle, and even then the principled person has to balance it against the real risks to his company and lifestyle. Newegg had the gumption and muscle to see the case to its end, but it was the lucky one, the one-in-a-hundred with the right attributes (principled owners, private ownership, deep pockets). We're not likely to see this kind of thing happen very often, with the odds stacked against what should be the right outcome.<p>And that's all the more reason to salute Lee Cheng, Fred Chang, and James Wu and their victory against profiteers in a flawed system. CEO Fred Chang probably deserves as many, if not more, accolades as Lee Cheng, for deciding as the major shareholder to take this battle to its end.
评论 #5127242 未加载
评论 #5127769 未加载
评论 #5127818 未加载
评论 #5127668 未加载
评论 #5129925 未加载
评论 #5127605 未加载
评论 #5131672 未加载
cfontesover 12 years ago
This phrase alone makes me want to buy stuff there...<p>"For Newegg's chief legal officer Lee Cheng, it's a huge validation of the strategy the company decided to pursue back in 2007: not to settle with patent trolls. Ever."
DanBCover 12 years ago
Surprising that so many companies paid so much money before NewEgg found and used the Compuserve prior art.<p>And it's a shame there isn't much cooperation between people attacked by patent trolls. It feels like there could be benefits of scale if you have 5 firms cooperating against a troll.
评论 #5126186 未加载
chris_wotover 12 years ago
After a troll loses, do they have repay all money they gained from others?
评论 #5125992 未加载
评论 #5126564 未加载
michaelwwwover 12 years ago
I'm in the market for a new PC and now I'm definitely buying from Newegg.
评论 #5126314 未加载
s0rceover 12 years ago
I'm pretty amazed that the lawyers/consultants somehow came up with the Compuserve Mall as evidence.
评论 #5126041 未加载
joshfraserover 12 years ago
Every internet retailer owes Newegg a really nice gift basket right now.
评论 #5126909 未加载
Claudusover 12 years ago
Really glad to see this, these costs to pay patent trolls would have been passed along to the consumer in some way.<p>Good job, Newegg!
likeclockworkover 12 years ago
I can't even believe there WAS a shopping cart patent.<p>I mean, what?<p>How else are you supposed to do it?<p>I mean.. seriously? They patented the concept of keeping track of things a customer intends to buy?<p>If no one had ever done this before, how many people would arrive a this solution tomorrow?<p>It's not hard to implement and absurdly obvious to even think of.
评论 #5127816 未加载
jessaustinover 12 years ago
<i>...the patent-holding company was still able to hire another top law firm: Quinn Emanuel. That same law firm has done loads of defense work for Google and has become the search giant's go-to patent-troll killer; it's the same firm that defended Samsung in its blockbuster showdown with Apple.</i><p>This reminds me of the classic pre-emptive divorce maneuver Tony Soprano pulled: <a href="http://en.wikipedia.org/wiki/Unidentified_Black_Males#Episode_recap" rel="nofollow">http://en.wikipedia.org/wiki/Unidentified_Black_Males#Episod...</a><p>If you don't want to get sued by patent trolls, get all patent troll attorneys on retainer.
dearover 12 years ago
Someone should create a website as a meeting point for those affected by patent trolls. Anyone affected can go on this website and look for their "peers" so they can pool their resources to fight off the evils.
lubujacksonover 12 years ago
So the patents were invalidated because CompuServe did it first. The problem doesn't seem to be in any way improved. If CompuServe held the patents, this would still be a valid lawsuit, no?
评论 #5127054 未加载
metaperlover 12 years ago
How does Newegg recoup the loss of time and money involved in raising this lawsuit?<p>Wouldnt it make sense for Hacker News to provide an affiliate URL to Newegg? After all, you wouldnt be shopping there if it werent for YC notifying you of their noble actions - YC is driving business to them and receiving no sales commissions.
silentmarsover 12 years ago
Anyone else read the article, see the picture of Lee Cheng and say to themselves, "damn I wish I was that guy"?
abcd_fover 12 years ago
Does this reverse the payments made by Amazon et al to date? Or will this troll lawyer lady keep sitting on the millions and looking for another way to do the same thing? Like going after smaller potatoes, but in much large numbers.
linuxhanslover 12 years ago
Assuming Soverain does to have pay back prior settlements it was probably still a very lucrative business in extortion.<p>Is there a legal way to make them pay for their prior litigation? Or to force them to pay Neweggs legal fees?
评论 #5129210 未加载
damian2000over 12 years ago
I wonder what percentage of lawyers are actually ethical and wouldn't represent these trolls? Is there any blowback for their lawyers for representing something that was obviously a sham from the very beginning?
Friedduckover 12 years ago
Why hasn't there been a boycott of businesses in the East Texas district where all these judgments originate? Or at least some social action against Texas to try to shame them into behaving responsibly?<p>Could it gain traction?
评论 #5129229 未加载
hakaaaaakover 12 years ago
The U.S. needs patent law/tort reform- something to stop this nonsense without reputable companies having to pay millions to patent trolls. I'll definitely make sure to buy from newegg next Christmas.
ck2over 12 years ago
They did more to save online retail with just fighting a patent - they have excellent customer service.<p>Not quite as good as Amazon but way up there.
d4vlxover 12 years ago
Does anyone know if invalidating patents affects previous settlements? Could the company that settled sue for their money back?
linuxhanslover 12 years ago
It's a shame that prior art was even necessary here. Isn't this plainly "obvious to anybody skilled in this field"?
nonamegivenover 12 years ago
Why is East Texas a troll haven? Are companies donating money to schools or paying bribes?
shmerlover 12 years ago
Kudos to Newegg for being steadfast and busting another greedy patent troll.
dangayleover 12 years ago
"Screw them. Seriously, screw them. You can quote me on that."<p>Best quote of the day
cragover 12 years ago
I'll be shopping at Newegg, now.