Newegg Rides Troll-Fighting Stance to Internet Stardom

NewEgg_LeeChengInternet retailer Newegg’s reputation as a company that won’t settle with “patent trolls” appears to be reaping the company considerable benefits, including a strong marketing narrative that seems to be popular with patent system skeptics. 

Earlier this week, Newegg’s subsidiary Rosewill sued for a declaratory judgment of noninfringement against non-practicing entity Minero Digital, even though Minero had already dismissed Rosewill from its patent infringement case. 

According to one article, the dismissal came a day after Newegg’s outside counsel told the plaintiff to search for news stories outlining the company’s refusal to settle with “patent trolls,” the pejorative term for NPEs. The timing implies that Minero moved on once it realized that Newegg was not a soft target worth pursuing. 

Newegg’s aggressive track record against NPE suits also seems to be good for marketing – or at least the company thinks so. Newegg trumpets its “anti-troll” stance, selling “Don’t Settle” T-shirts and dubbing Chief Legal Officer Lee Cheng as “Chief Troll Hunter.” 

It also describes its unwillingness to settle as beneficial to Newegg customers. Indeed, last July, it held a 24-hour sale after a court victory to “express its thanks to the thousands of loyal customers who supported Newegg in its fight against patent trolls.” 

All this appears to have made Newegg popular among those who think the patent system is broken because it encourages frivolous lawsuits. Comments on tech sites about the company’s legal battles regularly praise it for its refusal to settle. Many such comments can be found on Cheng’s “Ask Me Anything” interview on Reddit from 2014, where much of the discussion focused on patent issues. 

Though it’s unclear how much Newegg’s “anti-troll” position has helped sales, it’s clearly boosted its image with the tech-savvy—the core of its customer base—if the popularity of Cheng’s AMA interview is any indication. Cheng’s interview received 2,004 upvotes, putting him in the same ballpark as rapper Snoop Dogg (2,006 upvotes), then Newark, N.J., Democratic mayor and now U.S. Sen. Cory Booker (1,997), and Joe Perry of Aerosmith (2,023). 

Cheng’s numbers don’t compare with those of President Obama, who has the most popular AMA of all time (14,762 upvotes). But consider for a moment that he’s an executive best-known for fighting patent trolls—and he STILL has upvotes in line with those of well-known singers and politicians. That, in and of itself, indicates that a whole lot of people are interested in what’s going on with patents.