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Federal Circuit Reverses & Vacates Judgment Against The Webb Law Firm's Client Newegg Inc.

Wednesday, January 23, 2013

PITTSBURGH, PA — The Webb Law Firm is pleased to announce that it has helped to obtain a very favorable ruling from the United States Court of Appeals for the Federal Circuit for its client, online retailer Newegg Inc. The decision, Soverain Software, LLC v. Newegg Inc., Appeal No. 2011-1009 (Fed. Cir. 2013), relates to a patent infringement lawsuit brought by Soverain Software, LLC involving U.S. Patent Nos. 5,715,314; 5,909,492; and 7,272,639. Soverain accused the shopping cart, order history, and session identification functionalities on Newegg’s website of infringement. On January 22, 2013, the Federal Circuit found that all of the patent claims asserted against Newegg were invalid, reversing a judgment to the contrary entered against Newegg in the United States District Court for the Eastern District of Texas. The Webb Law Firm acted as lead trial counsel and of counsel for the briefing on appeal. Kent Baldauf, Jr. headed the trial team and was supported by David Hanson, James Bosco, Jr., and Daniel Brean.

After a five-day trial in early 2010, a jury found that Newegg failed to prove that the asserted patent claims were invalid, that Newegg was liable for actively inducing infringement of the ’314 and ’492 patents, and that Newegg did not infringe the ’639 patent. The jury awarded $2.5 million in damages to Soverain, and Soverain was awarded an ongoing royalty from Newegg following the judgment. The district court overturned the jury’s verdict of noninfringement of the ’639 patent, and ordered a trial on damages pertaining to the ’639 patent to take place after all appeals were exhausted.

The Federal Circuit agreed with Newegg’s arguments on appeal that the asserted claims of Soverain’s patents were invalid for being merely obvious variants of technology that existed in the public domain before the patents were filed in the mid 1990s. Specifically, the Federal Circuit held that the “shopping cart” and “hypertext [order history] statement” claims were invalid for being obvious over functionality available in the prior art CompuServe Mall shopping system, as described by user manuals published before the patents-in-suit were filed. Likewise, the Federal Circuit held that the “session identifier” claim was obvious over the combined disclosures of two prior United States patents issued to Johnson (No. 5,650,008) and Gifford (No. 5,724,424).

Because the Federal Circuit held all of the asserted claims invalid as a matter of law, it reversed and vacated the judgment against Newegg in full, removing all of Newegg’s liability to Soverain. This decision is likely to impact other pending lawsuits subsequently brought by Soverain against a number of other online retailers and software companies, including Avon, Victoria’s Secret, Oracle, and Macy’s.

The Federal Circuit decision is available at http://www.cafc.uscourts.gov/images/stories/opinions-orders/2011- 1009.Opinion.1-17-2013.1.PDF.

The Webb Law Firm has been helping innovators safeguard their discoveries, advance their technologies and achieve historic milestones since 1845. The Firm’s patent attorneys hold dual degrees in law and the sciences and combine their legal expertise with an in-depth personal understanding of business and industry. The Webb Law Firm is located in One Gateway Center in downtown Pittsburgh.

Contact: Ann M. Cannoni
Phone: 412.471.8815
Email: acannoni@webblaw.com