A patent-holding company called Minero Digital seeks to exact royalty payments on a wide range of USB hubs, suing more than two dozen retailers and manufacturers last year. But the "non-practicing entity" dropped its East Texas lawsuit against Newegg subsidiary Rosewill within days of getting a call from the company's lawyer. It's not going to be easy for Minero and its president, Texas lawyer Daniel Perez, to walk away, though. Yesterday, Newegg filed its own lawsuit (PDF) against Minero in Los Angeles federal court, asking a judge to rule that Rosewill products do not infringe Minero's patent.
Newegg Chief Legal Officer Lee Cheng says the move is necessary since Minero dismissed its Texas lawsuit without prejudice, meaning it can refile the case at a time of its choosing."We just don’t believe Rosewill’s products and customers infringed on valid patent claims," said Cheng. "Minero’s case does not have merit, and its patent is not only expired but would suck even if it wasn’t expired. Now that they have started the litigation, it would be irresponsible for Newegg to not finish it."
Cheng discussed the new lawsuit with Ars while traveling to East Texas for a court hearing in another case against a patent-holding entity. (See photo above.) Beyond the possibility of being sued again, Cheng noted that Minero continues to litigate against other retailers that sell Rosewill-branded products and that Newegg may have defense obligations to those other companies. Minero continues to press its case against more than 20 companies, with the defendants including Office Depot, Walmart, and Amazon—three big retailers that sell Rosewill products.
Newegg's lawsuit asks only for a judicial ruling of non-infringement, not money damages. Still, dealing with a separate litigation in Newegg's home district could be a time-consuming distraction for the patent-licensing entity, which is represented by solo Texas practitioner Ron Burns. Reached by telephone this morning, Burns declined to comment on the new lawsuit.
Minero Digital filed its wide-ranging lawsuit in September of last year, citing US Patent No. 5,675,811. The patent was acquired by Intellectual Ventures in 2003 and passed on to Minero in April 2015. It describes a system of "intelligent daisy-chainable serial" bus connections, originating at Apple spinoff General Magic.
Rosewill was created in 2004 as a private-label brand wholly owned by Newegg. The company specializes in computer peripherals like power supplies, cases, memory, and cables. Minero dropped its case against Rosewill shortly after a settlement discussion with Newegg's lawyer. It isn't clear exactly why the NPE dropped the case. Since Newegg was instrumental in organizing the defendants in that case, it could have been a strategic move to "divide and conquer."
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