As patent reform moved into the political spotlight during the last Congress, one patent that kept coming up was the “online shopping cart.” It seemed to resonate as a technology that clearly shouldn’t have been patented.
By the time it started being brought up in Congressional hearings, though, the shopping cart patent was dead. Its owner, Soverain Software, was beaten when computer retailer Newegg won an appellate ruling invalidating its patents and throwing out the $2.5 million jury verdict against it.
That ruling also wiped out Soverain’s biggest win: a 2011 verdict against Avon and Victoria’s Secret, in which the companies were ordered to pay almost $18 million and a “running royalty” of about 1 percent, for infringing the same patents.
The apparel companies should have been able to coast on the same legal trail created by Newegg’s win. But instead of admitting defeat, Soverain actually hired more law firms and contested the appeal by Victoria’s Secret and Avon.
Yesterday, a panel of judges on the US Court of Appeals for the Federal Circuit overturned Soverain’s trial win [PDF] and re-affirmed its decision that the “shopping cart” patent, and a related e-commerce patent, were invalid.
Full and Fair
Normally, when a patent-holder loses, outstanding appeals wouldn’t proceed—that’s because longstanding legal rules prevent parties from re-litigating the same issues in multiple courts. But Soverain argued that those rules should not apply “because Soverain has not had a full and fair opportunity to litigate the issue of obviousness.”
It’s true that the East Texas jury that found in Soverain’s favor didn’t address the issue of whether its patents were obvious. In fact, Soverain itself stopped the jury from considering the issue. The patent-holding company filed a motion arguing that its patents were non-obvious as a matter of law, and the district court judge sided with it. Obviousness was off the table as a courtroom defense for Newegg.
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