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