Marshall, TX; Online computer retailer Newegg has lost Round 1 of its fight with patent troll TQP Development. The east Texas judge awarded a $2.3 million judgment to TQP Development after the jury decided that Newegg had infringed on a 1995 encryption patent that’s owned by TQP Development.
Microsoft, Amazon, and other companies have settled similar lawsuits brought against them by TQP Development. Microsoft coughed up $900,000. TQP Development priced each lawsuit so that it was cheaper for the defendant to settle than to fight the case. One by one, the defendants settled. Newegg fought.
Newegg mounted an impressive defense but lost. Its witnesses included public-key encryption inventor Whitfield Diffie and RSA encryption designer Ron Rivest, whose encryption products predate TQP’s. Sounds like a strong defense to me, but, amazingly, it didn’t convince the jury. (East Texas juries are famous for ruling in favor of “the little guy”.)
Newegg will appeal the decision, which will move venue outside of East Texas.
Techdirt documented the case in its Meet The Patent Troll Suing Hundreds Of Companies For Encrypting Web Traffic article last week.
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