Newegg Tells the FTC and DOJ How Patent Trolls Are Damaging Retailers ~pj

Newegg's Chief Legal Officer Lee C. Cheng tells the FTC and DOJ in its public comment [PDF] on Patent Assertion Entities that patent troll is a better phrase than politely calling them PAEs, because it describes exactly what they do:

While the FTC's and DOJ's investigation refers to this class of NPEs as "patent assertion entities," I believe that the term "patent troll" is more appropriate. A "troll," as in the under-a-bridge fairy tale figure that blocks one's way across a bridge without some payment (or worse, a fight), is the perfect term for this class of NPEs.

Bridge trolls have one thing to offer-a right of way. The trolls have the ability to stop passers by unless they fight their way across or pay the fee demanded by the troll. It matters not to the troll why one requires passage, nor does the troll care that one's passage causes no actual harm to the troll or the bridge. All that matters to the troll is that this is their bridge and you should pay to cross it or prepare for a fight that could cost you dearly. So it is with patent trolls. A patent is essentially no more than a right of way. As a mere patent owner, a patent troll has nothing to offer or license except the right not to be sued under the patent.

Newegg describes what it and other retailers are going through, being sued for using internet commerce software they merely license from other companies, like Microsoft, Oracle, and Citrix. Rather than sue those companies, trolls go after users of their software, like Newegg, claiming that some minor detail of the software is the reason for Newegg's success and seeking damages, even though the troll isn't in business and isn't hurt at all by Newegg using the software. This, Newegg concludes, promotes opportunism rather than innovation. And the impact on Newegg of the constant flood of lawsuits is that it can't create new jobs, despite its success because patent trolls are skimming of the top of retailers' already "razor-thin profit margins".