Federal Circuit Invalidates Soverain eCommerce Patents

Federal Circuit Invalidates Soverain eCommerce Patents

^{January 24, 2013 | Intellectual Property News}

In a decision this week, the Federal Circuit Court of Appeals invalidated a group of patents held by Soverain Software LLC and asserted against many companies for practicing electronic commerce, including use of a shopping cart model for sales transactions.

Soverain Software sued many online retailers for infringement of several patents that include claims for use of an online shopping cart sales system and related electronic commerce methods. Most of the defendants settled the litigation by purchasing a license under the patents, but Newegg declined and elected to defend itself in court instead. A key part of Newegg’s defense was that the patents were invalid in view of earlier electronic buying systems such as the CompuServe Mall.

At trial, the district court decided that Newegg had not presented enough evidence to show that the patents were invalid. In fact, the district court concluded that Newegg’s case was so lacking that it did not allow the jury to even consider the question.

On appeal, the Federal Circuit disagreed. After a thorough review of the evidence, the Court of Appeals ruled that the Soverain patents were invalid because they were obvious in view of the prior art, including the CompuServe Mall references. In most cases, when a court of appeals reverses a district court decision it will remand the case to the trial court to reconsider the matter in view of the errors found on appeal. In this case, however, the court noted that because the district court ruled on obviousness as a question of law, the court of appeals could also reach its own ruling as a matter of law, without remanding it to the district court for further review. The decision is available at Soverain