Friday, May 17, 2013

Alcatel-Lucent v. Newegg - Comment on Joe Mullin's Article Newegg nukes "corporate troll" Alcatel in third patent appeal win this year

In Newegg nukes "corporate troll" Alcatel in third patent appeal win this year Joe Mullin reports that Alcatel-Lucent had e-commerce on the ropes in 2011 given favorable settlements with Amazon, Intuit, Kmart, Lands End,, Sears, QVC, and Zappos for infringement of US Patent No. 5,649,131. However, things changed as a jury invalidated the '131 patent and the Federal Circuit affirmed the judgment.

Newegg's chief legal officer Lee Cheng appears to have earned Mr. Mullin's respect. Mr. Cheng now laments having insufficient patent troll lawsuits to generate favorable law. Most may not think reducing lawsuits is bad news, but would agree it is good news when a bogus patent is invalidated. But invalidating the '131 patent may not "nuke" Alcatel-Lucent given it owns 27,000 patents, many of which were acquired from Bell Labs.

I am uncertain why Alcatel-Lucent is a "corporate patent troll." Mr. Mullin notes: "Even though Alcatel-Lucent has billions in revenue from real businesses, when it comes to patent battles Cheng doesn't see them as being so different. Since Alcatel is asserting patents in markets it's nowhere near actually participating in he sees them as a kind of "corporate troll. 'It's an operating company that happens to hold a patent,' said Cheng. 'But it does nothing at all to bring the benefit of that patent to society.'" So one cannot license a patent and leave manufacturing to a licensee without being a troll?

I like to hear why you are right, not why the other party is bad. Mudslinging makes me suspect the merits of the case are lacking. It reminds me when a senior associate insisted I read his legal brief not so much for input but for my admiration: you know, young lawyer here's how we do it around here. I recall it didn't dwell on the merits but argued: (1) Your honor I appreciate your fine record; (2) the other party is a bad actor; (3) you hold a big stick your honor and I respect you for that; and (4) now without delay may it please you to stick the other party with the full measure of your judicial wrath! Yes, let me see you swing that big stick so the other party understands. Yes, all this in a civil case. It was embarrassing to read as I think he expected a compliment. But what could I say? Good job ... the other party will get the big stick for sure!

Also see Professor Michael Risch's article in Wired Don't Blame the Trolls for the Patent Problem.

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