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14 March 2014Patents

NPEs “walk away” from Overstock patent suits

Two non-practising entities (NPEs) have left empty-handed in separate cases filed against Overstock.com, the online retailer has claimed.

Execware LLC sued Overstock for infringing a patent in May 2012, while Eclipse IP LLC took action over three patents in April last year.

But the companies “just walked away”, said Overstock.com chief executive Patrick Byrne in a statement dated March 13.

“Patent trolls find us unappetising. While we have the highest respect for intellectual property rights, we don't settle abusive patent suits – we fight,” he said. “You can't fork over your lunch money today, and expect a bully to leave you alone tomorrow. Patent trolls understand a bloody nose, and in the long run it's the asymmetrical response that pays off. It is only right that we take this opportunity to make explicit this litigation strategy.”

Neither law firm representing the NPEs responded to a request for comment.

According to Overstock.com, both NPEs decided to dismiss their respective cases. General counsel Mark Griffin claimed his company rejected a proposal that Eclipse IP leave the case empty-handed but keep it confidential.

Execware’s case, filed at the US District Court for the District of Delaware, targeted US patent number 6,216,139. It protects an “integrated dialog box for rapidly altering presentation of parametric text data objects on a computer”.

In the second suit, filed by Eclipse IP, the US District Court for the Eastern District of Texas was the battleground. Three patents were at issue: “notification systems and methods enabling a response to cause connection between a notified PCD”; “response systems and methods for notification systems for modifying future notifications”; and “secure notification messaging systems and methods using authentication indicia”.

Griffin said Overstock.com refers to Execware and Eclipse IP as “patent trolls” because of the “extortionate” nature of the suits they filed.

Highlighting its determination to fight patent lawsuits, Overstock.com cited a case from 2011, brought by telecoms company Alcatel-Lucent, on which it spent $3 million defending itself. A US court rejected Alcatel’s claims that Overstock.com had infringed three patents.

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