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Patent troll likely to be turned to stone

by on26 November 2013

Newegg is like sunlight

Newegg appears to have found a leading patent troll’s sunlight which turns it to stone. Patent-licensing giant TQP Development has sued hundreds of companies, saying it has patented the common Web encryption scheme of combining SSL with the RC4 cipher. Almost 140 companies have paid TQP a total of more than $45 million to go away.

But online retailer Newegg took the case to a jury and bought with three well-known computer scientists who emphasized the importance of Newegg's "prior art." Ron Rivest testified, via videotaped deposition, about how he invented the RC4 cipher while at RSA Security in 1987, two years before the TQP patent application was filed. Former Microsoft CTO Ray Ozzie described demonstrating Lotus Notes to Bill Gates in 1988. Alan Eldridge, who worked on the Notes product, flew down to Marshall in person to describe how he put RC4 in the software. None of the expert witnesses were paid but came down out of a feeling of "civic responsibility," he said.

He didn't know who the defendants in this case were until he was told. "I hadn't even heard of New Age (sic) until Saturday," said Eldridge at one point. Newegg's star witness was cryptographer Whitfield Diffie, knocked out the Jones patent with "clear and convincing" evidence that he invented it long before the original patent. He said that TQP's patent, invented alongside Michael Jones' failed modem business, wasn't much of an invention at all according to Diffie. It was a pre-Internet patent, describing an old method of encoding data. Internet security needed "public key" cryptography.

Diffie told the court he invented public key encryption and solved the problem of key distribution. In 1976, he published "New Directions in Cryptography" with Martin Hellman. TQP lawyer Marc Fenster decided that the only way to discredit Newegg’s case was to claim that Diffie was lying about inventing encryption. Fenster pulled up the history website for the Institute of Electrical and Electronics Engineers and page showed James Ellis, not Diffie, as the inventor of public-key cryptography. Ellis made the breakthrough at the British GCHQ intelligence agency but kept it secret until 1997.

Diffie pointed out that Ellis' paper is in no sense enabling and so really, that was not an issue. The case will go on until Monday. Observers say that things look bleak for TQP.

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