A good egg

Supreme Court: Web ‘shopping cart’ patent still invalid

Elliot Bentley
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Newegg’s landmark victory against alleged patent troll Soverain is upheld as high court refuses to hear case.

A
ruling by the US Supreme Court against an alleged patent troll is
being hailed as a major victory in the fight against patent trolls.
Newegg were one of many companies accused by Soverain of infringing
a patent for online shopping carts, but appears to have won its
long-running legal battle.

Despite initially being ordered
by a Texas judge to pay out $2.3m, Newegg
found victory
in a follow up case in the U.S. Court of Appeals
– raising hopes that similar patent trolls’ cases might fall in
court, too. Yesterday, the Supreme Court
denied Soverain an appeal
of the earlier decision.

The patent itself was registered by a 90s ecommerce startup
called Open Market. After Open Market’s parent company went
bankrupt in the wake of the dot-com bubble, its ‘Transact’ software
and associated patents were acquired by Soverain.

Soverain continues to market Transact, described as “Internet
commerce enterprise software”, as commercially available. However,
it has also gone on a litigation spree, targeting over ten
companies including Oracle, eBay, Best Buy, and Newegg for their
use of shopping carts online.

Many settled, but Newegg chose to go to trial, arguing that the
patents were “applying century-old shopping conventions to the
Internet” and that Open Market was not the first to implement
it.

In response, Soverain lawyers claimed that the
patents’ validity should have been decided by a jury. In addition,
they also said that invalidation of patents so long after their
approval would weaken confidence in the US patent system.

The Supreme Court’s decision may give new hope to
defendants in future patent lawsuits – especially those by
Soverain.

Newegg is not the only company taking a proactive
approach to patent trolling. Rackspace last year refused to settle
with Parallel Iron, which the company
described
as “the most notorious patent troll in America”, over
a patent involving the Hadoop Distributed File System. Twitter,
meanwhile, has created an
Innovator’s Patent Agreement
to safeguard its developers’
innovations from being used in aggressive lawsuits.

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