High Court Rejects Review of 'Shopping Cart' Patents

, The Litigation Daily

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Soverain Software, the e-commerce company whose $2.5 million jury win for infringement of its "shopping cart" patents was reversed by the U.S. Court of Appeals for the Federal Circuit, failed to convince the U.S. Supreme Court to take its appeal.

Soverain had enlisted a team of top Supreme Court advocates to craft a petition for writ of certiorari, including former U.S. Solicitor General Seth Waxman (now a partner at Wilmer Cutler Pickering Hale and Dorr), Robert Sterne of Sterne, Kessler, Goldstein & Fox, as well as a team at Quinn Emanuel Urquhart & Sullivan. But the high court announced Friday it would not review the case.

Soverain's lawyers had argued that the Federal Circuit had overreached and violated the Seventh Amendment when it invalidated the company's patents and took away a $2.5 million jury win against Newegg Inc.

"The notorious shopping cart patent is finally dead," said Ed Reines, the Weil, Gotshal & Manges partner who represented Newegg before the Federal Circuit and wrote the brief opposing the granting of cert.

Waxman was not available for comment.

Soverain sued Newegg and others in Marshall, Texas, in 2007, accusing them of infringing its online shopping cart patents, which it had acquired from another company. At Newegg's trial, U.S. District Judge Leonard Davis of the Eastern District of Texas refused to let the jury consider the defense of obviousness. But Newegg appealed, and rather than remanding the case for a jury to decide the obviousness question, the Federal Circuit in January of last year found the patents invalid and vacated the judgment.

Soverain argued that a jury should have been allowed to decide the validity of its patents, and that the Federal Circuit's action makes it more likely that patents will be invalidated on appeal. "The decision presents a threat to all who rely on the stability and predictability of the patent system,” Soverain wrote in its petition.

Reines told the Litigation Daily that the appeals court was well within its right to decide the obviousness question. "The use of a shopping cart for e-commerce and the link to a receipt are obvious ideas," he said. “It is not a constitutional violation for judges to use common sense."

Soverain sued dozens of companies for infringing its patents, and many settled. But Newegg, whose chief legal officer Lee Cheng has made a name for himself fighting patent trolls, opted to go to trial.

Reines said the Supreme Court's decision to deny cert should eliminate verdicts against other companies it has sued. Some of those companies include Best Buy Co. Inc., EBay Inc., Oracle Corp. and Home Depot Inc.

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