Special to SEGAZINE
The online retailer Newegg has lost a patent case centering on web encryption, after a Texas jury rejected its argument that a claim from the company TQP Development was invalid. The jury ordered Newegg to pay $2.3 million less than half the damages TQP had sought.
The result is a resounding victory for TQP, widely seen as a “nonpracticing entity” whose sole source of income is settlements and legal fees related to its patents. Retailers and others often term such firms “patent trolls,” as NPR reported this summer.
The verdict could also put a chill into other companies who might consider fighting TQP’s claims, particularly because Newegg is seen as a consistent opponent of patent trolls. The patent in question relates to a common method of securing customers’ privacy in online banking and commerce.
TQP has previously wielded the patent, which it acquired in 2006, to extract more than $40 million in settlements from Microsoft, Amazon, and scores of other companies. Newegg says it will appeal the verdict, which followed several cryptography experts’ testimony on its behalf.