Newegg Files Opposition to Soverain Software's Plea for Supreme Court Review and Challenges Soverain's Misrepresentations to Congress
12/23/2013 Press Release
Newegg Opposes Patent Troll Soverain's Petition for Supreme Court Review, Sends Letter to Chair of Judiciary Committee
LOS ANGELES, CA -- Dec 23, 2013 -- Newegg.com announced today that it has filed an opposition to Soverain Software's petition for writ of certiorari to the U.S. Supreme Court and has also responded to a letter Soverain wrote to Chairman Robert Goodlatte of the House Judiciary Committee. In its Supreme Court petition, patent troll Soverain seeks Supreme Court review of a January 2013 ruling by the Court of Appeals for the Federal Circuit that completely invalidated as obvious Soverain patents purporting to cover basic online functionalities, such as the online shopping cart.
Soverain Software, which derives almost all of its revenue from litigation settlements, had filed dozens of cases in federal court in the Eastern District of Texas (EDTX), suing Newegg and dozens of other major retailers, claiming a right to receive royalties for its now invalidated patents. In the district court actions, Soverain had obtained settlements and won EDTX jury verdicts estimated at over $70 million. Before its patents were invalidated, hundreds of millions of dollars more in judgments and settlements were at stake because Soverain could have sued any company doing business online. On appeal, the Federal Circuit found all of Soverain's shopping cart patent claims invalid as being obvious, citing the fact that the concepts articulated in Soverain's patents were all present in the popular CompuServe Mall used in the dial-up internet era.
Newegg also sent a letter to Chairman Goodlatte, who championed H.R. 3309, the Innovation Act, to limit abusive patent assertions. The Innovation Act was passed with an overwhelming bipartisan majority: 325 to 91, on December 5, 2013. In Newegg's letter, Newegg Chief Legal Officer Lee Cheng corrected erroneous statements and misrepresentations made by Soverain Software's President, Katharine Wolanyk. In particular, Mr. Cheng observed that, contrary to Ms. Wolanyk's statements, the Federal Circuit opinion was consistent with evidence, law and common sense, and that under oath, Soverain had conceded repeatedly that it never actually sold a single unit of the Transact product in ten years of existence. Mr. Cheng stated that Soverain's records would, if honestly and fully disclosed, reveal that Soverain has no significant business other than litigation.
"We believe that the Federal Circuit correctly invalidated all of Soverain's patents and that there is absolutely nothing that should serve as the basis for Supreme Court review of this case. Soverain's Supreme Court petition is a desperate attempt to continue its lawsuit factory and extract even more money than it already has from every person who shops online," said Lee Cheng, Newegg's Chief Legal Officer. "Should the Supreme Court wish to send its own message to the abusive patent assertion community, we are confident that justice will prevail. Justice must prevail, if the American economy is to be free from the uniquely American burden of unjust patent litigation."
As an innovator in the field of online commerce, Newegg has great respect for inventors and for valid intellectual property rights. However, the abusive assertion of the now-invalidated Soverain patents do not represent innovation but rather, unfair attempts to impose a private tax on the hard work and innovation of others.
Mr. Cheng concluded, "We believe that fighting patent trolls is the right thing to do on many levels. When companies settle with patent trolls, their customers will share the burden in the form of higher prices and diminished service levels. When we fight and beat bad patents, our customers don't have to pay the Toll of The Troll."
Newegg's victories against abusive patent asserters in 2013 alone include wins against Soverain Software, Alcatel-Lucent USA, Inc., and Kelora Systems LLC at the Court of Appeals for the Federal Circuit, and with co-defendants, obtained a grant of summary judgment against Digitech Image Technologies, LLC in the Central District of California (presently on appeal). On December 19, 2013, Newegg and its co-defendants defeated TPL LLC in a proceeding before the U.S. International Trade Commission.
About Newegg Inc.
Newegg Inc. is the leading electronics-focused e-retailer in the United States. It owns and operates Newegg.com (www.newegg.com) which was founded in 2001 and regularly earns industry-leading customer service ratings. The award-winning website has more than 25 million registered users and offers customers a comprehensive selection of the latest consumer electronics products, detailed product descriptions and images, as well as how-to information and customer reviews. Using the site's online tech community, customers have the opportunity to interact with other computer, gaming and consumer electronics enthusiasts. Newegg Inc. is headquartered in City of Industry, California. The Newegg Hybrid Center is located at 18045 Rowland St., City of Industry, CA 91748.
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