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Newegg Confirms Commitment to Challenging Patent Claims Covering Common E-Commerce Functionalities

9/22/2010 Press Release

CITY OF INDUSTRY, CA - On September 10, 2010, Newegg Inc., the operator of Internet retail website Newegg.com, filed a notice of appeal with the US Court of Appeals for the Federal Circuit to appeal certain elements of the final judgment, in Soverain Software LLC v. Newegg Inc., Civil Action No. 6:07-CV-00511-LED, a software patent infringement case. The final judgment was entered on August 11, 2010, by a federal court in the US District Court of the Eastern District of Texas, Tyler Division. Soverain claims to hold patents covering common e-commerce functionalities, like the online shopping cart, which are used by virtually every e-commerce site.

Newegg's General Counsel, Lee Cheng, issued the following statement:

"Newegg did not consider the District Court Order entering judgment a surprise. Very significantly, in that Order, the Court denied Soverain's request to enjoin Newegg from using any of the supposedly infringed-upon functionalities, and the damages awarded continues to be only 7% of the amount Soverain requested from the jury. No Newegg customer or business partner will be inconvenienced or affected by this decision.

"Since Newegg was founded in 2001, we have always focused on providing our customers with the best online shopping experience possible. As an innovator in the online retail space and a retailer of tens of thousands of technology products, we very much respect the intellectual property rights of others.

"We have spent a considerable amount of time and resources to defend ourselves against Soverain because we believe that ultimately, their claims do not have either a strong legal or factual basis. While it may be true that other defendants have paid Soverain royalties for a number of reasons, including to avoid the cost and risks of trial, we choose not to follow that course. At Newegg, we believe that it is critical to take a principled stand against lawsuits that we consider abuses of patent law and the legal system. We want to ensure that our customers do not have to bear the cost of undue private taxes to parties asserting what we consider highly questionable claims made in connection with unreasonable royalty demands. We have built our business by doing what we believe is right, rather than what is expedient. Our actions in the Soverain case reflect this core business philosophy.

"Newegg has filed a Notice of Appeal to appeal a number of aspects of the District Court's judgment to the US Court of Appeals for the Federal Circuit. We intend, if necessary, to take this case to the US Supreme Court. We believe that our decision to fight Soverain's claims of infringement will be fully vindicated after the appellate process is completed, and that we will help to clarify and create law in a way that genuinely promotes innovation and protects the rights of customers and entrepreneurs."


About Newegg.com
Newegg Inc. is the second-largest online-only 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 13 million registered users and offers customers a comprehensive selection of the latest high-tech 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.

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