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Newegg Obtains Complete Defense Jury Verdict, and Rare Patent Invalidation, in Infringement Lawsuit Brought by Alcatel-Lucent

10/17/2011 Press Release


CITY OF INDUSTRY, Calif., October 17, 2011 -- Newegg Inc., the second-largest online-only retailer in the United States, is pleased to announce that it obtained a complete defense verdict, and a rare patent invalidation, after a jury trial in federal court in the Eastern District of Texas. Alcatel-Lucent USA, Inc., a global communications company, accused Newegg and Overstock.com, Inc. of infringing three patents covering basic e-commerce functionalities, including error corrections and product search capabilities, which are used by virtually every e-commerce site.

Among their defense arguments, Newegg and Overstock asserted that Alcatel’s `131 patent, relating to text boxes, drop down menus and similar functionalities, was invalid and should have never been issued by the U.S. Patent Office because it was not original due to prior inventions. The jury found this argument convincing and invalidated Alcatel’s `131 patent as anticipated and obvious. The verdict was handed down on Friday, October 14, 2011 after a four day jury trial before the Hon. Leonard Davis in Tyler, Texas in Civil Action No. 6:09-CV-0422-LED.

Newegg's General Counsel, Lee Cheng, issued the following statement:

"Newegg is extremely pleased with Friday's verdict. We believe that the jury’s finding of no infringement on any of the 3 patents asserted, and their invalidation of the Alcatel `131 patent, vindicates our decision to go to trial. It is our strong belief that the accusations set forth in the Alcatel lawsuit had no basis in law or fact.

"As an innovator in the online retail space, we have always respected the intellectual property rights of others. However, we will not hesitate to defend ourselves vigorously against frivolous claims and to do what we believe is necessary to prevent abuses of patent law and the legal system that stifle innovation and entrepreneurism.

“Special thanks and recognition are due to Kent Baldauf, Jr. and his team at the Webb Law Firm for their outstanding case preparation and presentation and to Ed Reines of the Weil Gotshal firm for his attentive guidance on trial and appellate issues. They were spectacular. We would also like to thank our friends at Overstock.com and their talented legal team at the Bracewell firm for our effective partnership.

"As always, Newegg remains committed to providing our valued customers with the best possible online shopping experience."

About Newegg Inc.
Newegg Inc. is the second-largest online-only retailer in the United States. It owns and operates Newegg.com (www.newegg.com) which was founded in 2001 and regularly earns industry-leading customer service ratings. The award-winning website has more than 16 million registered users and offers customers a comprehensive selection of the latest consumer electronics products, detailed product descriptions and images, as well as how-to information and customer reviews. Using the site's online tech community, customers have the opportunity to interact with other computer, gaming and consumer electronics enthusiasts. Newegg Inc. is headquartered in City of Industry, California.



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