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Latest Newegg Win Fends Off Frivolous Patent Litigation
April 2, 2014 – Los Angeles, CA – Newegg today announced that on March 12, 2014, Macrosolve Inc., a patent assertion entity (commonly known as patent troll), voluntarily dismissed all claims against Newegg Inc. Macrosolve is a publicly traded (Nasdaq OTC: MCVE) software company that generates revenue by asserting patent rights.
Beginning in 2011, Macrosolve filed separate lawsuits in the Eastern District of Texas against more than 75 companies in a wide range of industries, including Newegg. Macrosolve alleged that each of the companies was infringing U.S. Patent No. 7,822,816 (the “816 Patent”), claiming that anyone who distributes electronic forms over the Internet or to mobile devices and then collects and reviews the responses could be liable for patent infringement.
Macrosolve filed lawsuits against 10-20 companies at a time, with offers to settle made shortly after a lawsuit was filed. Macrosolve, like similar patent asserters, leveraged the extremely high cost of litigation to extract payments with no tie to the value of the patent. Unfortunately, Macrosolve was only too successful: it publicly disclosed having collected more than $4M in settlements. Only two defendants, Newegg and Geico Insurance Company, chose to fight back.
“We would like to thank and congratulate our co-defendant, Geico, for taking a principled stand and challenging the validity of Macrosolve’s patent,” said Lee Cheng, Newegg’s Chief Legal Officer. “Fighting back works. We killed the troll.”
One month prior to the Court’s consideration of Newegg’s motion for summary judgment, Macrosolve had to decide whether it would litigate its case through trial or dismiss its claims to avoid a potentially adverse ruling on the merits. On March 7, 2014, Geico obtained a final rejection of Macrosolve’s patent in an ex-parte reexamination action in front of the United States Patent and Trademark Office. The day after Newegg’s claims were dismissed, Macrosolve dismissed all of its pending lawsuits against nearly a dozen other defendants.
About Newegg Inc.
Newegg Inc. is the leading electronics-focused e-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 25 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. The Newegg Hybrid Center is located at 18045 Rowland St., City of Industry, CA 91748.