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The Courts Encryption Patents

Newegg Beats Patent Troll Over SSL and RC4 Encryption 93

New submitter codguy writes to note that a few days ago, and after a previous failed attempt to fight patent troll TQP Development in late 2013, Newegg has now beaten this troll in a rematch. From the linked post: "Newegg went against a company that claimed its patent covered SSL and RC4 encryption, a common encryption system used by many retailers and websites. This particular patent troll has gone against over 100 other companies, and brought in $45 million in settlements before going after Newegg." This follows on Intuit's recent success in defending itself against this claim.
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Newegg Beats Patent Troll Over SSL and RC4 Encryption

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  • Good (Score:5, Insightful)

    by msobkow ( 48369 ) on Tuesday July 28, 2015 @11:52AM (#50197513) Homepage Journal

    What would be fitting is for all those "settlements" to be automatically overturned and the troll forced to refund the money.

    But I know it doesn't work that way. If you wuss out and pay the toll, there is no getting your money back from the troll.

    • Re:Good (Score:5, Informative)

      by mspohr ( 589790 ) on Tuesday July 28, 2015 @12:03PM (#50197609)

      Usually the settlement documents specifically state that if the patent/etc. is declared invalid that they get to keep the money anyway.

      So... $45 million is not a bad run for this troll. It will probably encourage them to keep the extortion ring going with another worthless patent.

      • Re:Good (Score:5, Insightful)

        by Solandri ( 704621 ) on Tuesday July 28, 2015 @01:36PM (#50198235)
        This. This needs to be made illegal. Patent licensing fees should be returned (minus reasonable administrative fees) if the patent is overturned. Force the burden of proving the patent is indeed valid back upon the patent holder. Don't force the purported violator to prove the patent is invalid.

        If the USPTO could control the patents it gives out so the rate they're overturned upon challenge is low, then it makes sense to force violators to prove the patent is invalid. But because they're seemingly willing to give out patents for anything and the rate they're overturned, it makes more sense to shift the burden onto the patent applicant to take reasonable steps to make sure his patent is ironclad and will not be overturned. If the patent applicant's confidence in his own patent is so low he isn't sure it won't be overturned upon a detailed review, then that's a pretty good indication the idea isn't really worthy of a patent in the first place.

        This also has the effect of making pure IP companies a high-risk business. If all you do is license patents and one of your main patents gets overturned, it could bankrupt you. But if you're actually using the patent to make stuff, then you'll have an alternate revenue stream which will allow you to survive having to pay back the licensing fees.

        There is a drawback in that companies may be more willing to license specious patents, in hopes that someone else will go through the expense of fighting it. If someone else fights it and wins, you get your money back, so why should you fight it? On the patent's holder's side, this creates a multi-year potential liability in the accounting books even if you have a valid patent. A sunset period of a few years after which you can't recover licensing fees (or a graduated return period, so after say 3 years you have to pay back 50%, after 5 years 25%, after 7 years you can keep it all) would address both problems.
        • This also has the effect of making pure IP companies a high-risk business.

          It should be illegal.

          • I don't agree. A pure research/engineering company that produces ideas and sells them with no intent on actually putting them into production THEMSELVES isn't a bad thing. As long as they are actually, you know, producing rather than just buying unenforced patents and suing people.
        • Patent licensing fees should be returned (minus reasonable administrative fees) if the patent is overturned.

          This really needs to be a law. Maybe put a reasonable 5- or 10-year limit on it so that a company isn't suddenly bankrupted by refunds for losing a patent.

          Don't force the purported violator to prove the patent is invalid.

          This makes it very difficult to enforce patents, especially for smaller companies. Now instead of being bought out by Facebook, Microsoft, Apple, or whoever has their wallet open, it is possible for those firms to steal an invention while burying the upstarts in legal expenses. Try to get a second round of venture capital with that baggage.

          But because they're seemingly willing to give out patents for anything and the rate they're overturned

          The computer re

      • by dissy ( 172727 )

        Usually the settlement documents specifically state that if the patent/etc. is declared invalid that they get to keep the money anyway.

        So... $45 million is not a bad run for this troll. It will probably encourage them to keep the extortion ring going with another worthless patent.

        I see no mention in the newegg blog about the patent being declared invalid, only that newegg was declared not infringing upon it.

        While I'm sure this ruling will help anyone else in the future who is simply using SSL on their web server, it doesn't really help anyone else the troll sues who they feel is using SSL/RC4 differently.

        They only really need a new worthless patent to go after the same targets they already sued or planned to sue for the same reason.
        They get to keep using this same worthless patent s

      • You've got to pay the troll toll To get into this boy's soul You've got to pay the troll toll To get in
    • Sadly, it's part of the risk... you either fight, or you pay up in a settlement.

      Now nothing is stopping those companies from litigating against the troll for their money back plus interest, legal fees, etc etc.

      That said, I'd love to see an instance where a defeated patent troll is forced to make the contested patent public domain if they are 1) not using the patent in a product they themselves sell, and 2) launch more than x number of lawsuits and/or get x number of settlements over it.

      It would up the risk

      • by PRMan ( 959735 )

        Isn't a contested patent that is found to be invalid "public domain" by definition?

        And if the lawsuit failed because the company in question solved the problem in a different fashion, then why would the patent go into the public domain? It may still be valid.

        • Re: (Score:3, Interesting)

          by KGIII ( 973947 )

          I do not think so? The judgment is usually that the party is not infringing as charged. There may be legitimate (in the legal sense) suits against other people. I did not read the article however.

      • by Anonymous Coward

        "Now nothing is stopping those companies from litigating against the troll for their money back plus interest, legal fees, etc etc."

        Except that the agreement they signed to licence those patents, which will have explicitely declared that even in the event of the patents being overturned in the future, the licensee disclaims all rights to sue for just that.

    • What money?

      Do you think the patent trolls are going to keep that money on hand where something like that might happen. The money will have been spent on something, like a big bonus for the CEO or paid out in fees for expert witness testimony to someone's friend. Perhaps they needed a new company car which just happens to be a Rolls-Royce or something similar.

      Anyone crooked and morally bankrupt enough to even run this type of enterprise isn't going to keep the money sitting around. Eventually the jig i
    • by sribe ( 304414 )

      But I know it doesn't work that way. If you wuss out and pay the toll, there is no getting your money back from the troll.

      The agreement will certainly have such a clause. But if you have enough money to spend on lawyers, you could certainly make the troll's life miserable for a few years, trying to have the agreement voided on the basis of fraudulent misrepresentation regarding the validity and applicability of the patents ;-)

    • by houghi ( 78078 )

      And for them it is just the cost of doing business. You win some, you losse some.

    • But I know it doesn't work that way. If you wuss out and pay the toll, there is no getting your money back from the troll.

      You gotta pay the troll toll to get into this boy's hole.

  • by jandrese ( 485 ) <kensama@vt.edu> on Tuesday July 28, 2015 @11:53AM (#50197517) Homepage Journal
    Sure is nice that we can freely use this form of encryption that should never be used anymore.
    • by Qzukk ( 229616 )

      That's OK, the troll has probably already filed for patents on using some other encryption algorithm they didn't invent with some other communications protocol they didn't invent, that was originally designed to be able to use the algorithm in the way they claim they invented.

      • by cdrudge ( 68377 )

        A good patent troll wouldn't explicitly state a particular algorithm. Rather they would word it so that ANY algorithm would apply.

        A method to send something from something via something after applying something so that someone can unapplying something to read the something on something.

        • by jandrese ( 485 )
          That patent would already exist, the patent troll would have to make theirs:

          A method to send something from something via something after applying something so that someone can unapplying something to read the something on something on a computer.

    • by cfalcon ( 779563 )

      It took them a decade to remove the patent some asshat snuck in on fucking XOR, no way the patent trolls are out of ammo. The system is literally made to provide them with an endless amount of it.

  • Justice? (Score:5, Insightful)

    by Stan92057 ( 737634 ) on Tuesday July 28, 2015 @11:54AM (#50197533)
    And liberty and justice for all...who can afford it.
  • This sounds like a good opportunity.

    I'm in the money...

    • I think you have to be a lawyer and have ownership of a patent first (it doesn't have to be worth anything, but you have to be the rightful owner of it...)

  • Sale (Score:5, Informative)

    by Coren22 ( 1625475 ) on Tuesday July 28, 2015 @11:58AM (#50197579) Journal

    They are also throwing a sale to celebrate.

    http://www.newegg.com/When-We-... [newegg.com]

    I was taken a little by surprise over this yesterday when I got the email about it, I wasn't even aware of the court fight going on. I am happy to hear that Newegg is standing up to the trolls, and their shirt about it is kind of cute.

    http://www.newegg.com/Product/... [newegg.com]

  • and it will be from Newegg. Thank you for standing up to the patent trolls.

  • by QuietLagoon ( 813062 ) on Tuesday July 28, 2015 @12:03PM (#50197607)
    It is great to see Newegg fighting the right battles and winning against patent trolls.

    .
    Kudos to Newegg.

  • When will they reform patent law so trolls don't have a business case? They could radically limit the validity duration of a patent, so after like two years, there's no case any more. Also, they could limit the right to sue to either the original inventor(s) or a company that bought the patent and is actually using it in a product. Then patents work the way they were intended, not as an extortion scheme for patent trolls.

    • Start by making the patent non-transferable. The owner can sell a non-exclusive license (meaning that anyone who can pay the price gets to use the patent, prohibition not allowed) to anyone who wants to use it. And since the government issues patents, they have a right to control license pricing to avoid said extortion. But there are no rich lobbyists to advocate such changes and the voters don't give a shit, so let's not get our hopes up yet.

  • I'd just off the trolls and the lawyers. The next bunch would get the idea...

  • Drawn and quartered. Look up the definition. It is a long and drawn out process for execution. They have wasted a lot of people's time and money and deserve to be snuffed out for such blatant and deliberate thievery.
    • Drawn and quartered. Look up the definition. It is a long and drawn out process for execution.

      It's almost as if you don't actually know anything that particular punishment.

      Hint: There's a third element to it.

      • by Holi ( 250190 )
        a third, and usually a 4th. Drawn, hanged and quartered (with a tad bit of live disembowelment added for good measure)
      • Drawn and quartered. Look up the definition. It is a long and drawn out process for execution.

        It's almost as if you don't actually know anything that particular punishment.

        Hint: There's a third element to it.

        It is almost as if you cannot read at all and you are merely a variation of the Eliza program. The hint for you should have been where I stated "look up the definition" and where I said it is a long and drawn out process for execution.

        From memory, you are first hung until nearly dead, disembowelled while alive, castrated and them made to watch as they burn your testicles and entrails before you. Next, your body is cut into quarters and finally beheaded. Often they would place the four quarters of your bod

  • by l2718 ( 514756 ) on Tuesday July 28, 2015 @12:28PM (#50197759)

    It's worth noting that there are known [rhul.ac.uk] attacks [imperva.com] against RC4 (especially SSL using RC4). While these aren't quite practical yet, it is clear that RC4 is obsolete, and that current programmers should choose other stream cyphers (AES). Even supposing the patent was legitimate, the technology it covers has become obsolete well within its lifetime.

    This illustrates one of the key reasons software (that is, algorithms) shouldn't be patentable: the field moves so fast that 20-year patent protection isn't useful. Even supposing the authors of software need patent protection to recoup their "investment" in inventing the algorithm, 20-year protection is effectively an infinite term, since by the time the protection ends, the technology is obsolete.

    As an aside, note that patenting a protocol (such as RC4) automatically ends its usefulness. Protocols are only useful if the other party to the communication can participate, and interoperability is very important in software. Patents are ill-suited for this. Copyright, on the other hand, works well: the code you write is protected, but anyone else can write their own code to implement the protocol and communicate with you.


    • This illustrates one of the key reasons software (that is, algorithms) shouldn't be patentable: the field moves so fast that 20-year patent protection isn't useful.

      So what's your stance on RSA, one of the early software patents, which is still used everywhere?
      • by 0123456 ( 636235 )

        So what's your stance on RSA, one of the early software patents, which is still used everywhere?

        Cryptography is a special case, as governments did their best to prevent innovation there until the late 90s/early 2000s. And the RSA patent was another of the reasons for the slow spread of cryptography prior to the end of the last Crypto War, as no-one wanted to be tied to a patented algorithm; some even suggested it was patented for precisely that reason, though I doubt that was the case.

      • by l2718 ( 514756 )

        So what's your stance on RSA, one of the early software patents, which is still used everywhere?

        I didn't try to articulate every problem with software patents, merely those illustrated by the just-overturned patent covering SSL using RC4. Note that RC4 itself is about 30 years old, and was developed by RSA security.

        In any case, regarding the RSA cryptosystem itself, it was developed by several academics (independent of its previous, secret, invention GCHQ), and clearly it would have been developed and pu

  • AFAIK here's the Patent [google.com]

    • Sokath, his eyes uncovered!

      An algorithm is as patentable (and copyrightable) as a recipe for spicy shrimp pasta. It's a statement of -- occasionally ingenious -- fact.

      • This is where groklaw would be great. But Algorithms are patentable, without the requisite case ruling it's hard to ascertain why Newegg won this time around, it could be the SCOTUS [patentlyo.com] ruling dealing with it giving the judge more direct clarification in this area. Allowing for windage (lawyers jockeying, filing motions and court dockets) it's conceivable this may be why Newegg won this time around.

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