David Yates Jul. 21, 2015, 2:41pm


A federal judge has vacated a Texas jury award of $2.3 million, levied against online tech retailer Newegg, a California company, following a patent infringement trial in 2013.

Since April 2009, the Record has reported on the numerous patent suits brought by TQP Development, a Marshall-based company that buys patent rights.

On May 6, 2011, TQP filed a suit against 10 companies, including Newegg, in the U.S. District Court for Eastern Texas, Marshall Division, alleging patent infringement.

Specifically, TQP alleged infringement of U.S. Patent No. 5,412,730, entitled, “Encrypted Data Transmission System Employing Means for Randomly Altering the Encryption Keys.”

Issued on May 2, 1995, the ‘730 patent relates to secure communications and the World Wide Web and concerns secure Hypertext Transfer Protocol (HTTP) communications, court records show.

At trial, a jury found Newegg had infringed upon four claims of the ‘730 patent, awarding TQP $2.3 million in damages, according to the verdict form, filed Nov. 25, 2013.

Following the trial, Newegg filed a motion for judgment as a matter of law and a motion for new trial, arguing TQP presented no evidence of even a single instance of direct infringement during the patent term and that the verdict of $2.3 million is unsupportable and must be remitted.

U.S. District Judge Rodney Gilstrap vacated the verdict on July 15, 20 months after the trial, writing in his order that “since the Court has found that there is no direct infringement, the Court finds that there can be no liability for induced infringement as a matter of law.”

Newegg is represented in part by the Tyler law firm Yarbrough Wilcox.

TQP was represented in part by the California law firm Russ August & Kabat.

Case No. 2:11-cv-00248-JRG

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