A good egg

Supreme Court: Web ‘shopping cart’ patent still invalid

Elliot Bentley

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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