On January 13, 2014, the Supreme Court refused to hear a case brought against Newegg by a Patent Troll that involved a “shopping cart patent.” This decision left in place a ruling from last year involving the same patent and Troll (Soverain Software) to stand in the Court of Appeals for the Federal Circuit (CAFC).
Until now, Soverain has been hugely successful in suing e-commerce businesses on the basis of patent infringement on a digital shopping cart. Gap, Nordstrom’s, Macy’s, Home Depot, RadioShack, Kohl’s, Best Buy, Walgreen’s, Drugstore.com, Avon and Victoria’s Secret were all sued and most settled with the Troll for multiple millions of dollars. Amazon forked over $40 million to avoid going to court. Rather than feed the troll, like the others, Newegg decided to fight.
Soverain was claiming that we infringed on three separate patents relating to the concept of a digital shopping cart and were demanding $34 million from Newegg. This is a bold claim from a software company who, according to court records, hasn’t even made one sale in its entire existence. They have, however, filed plenty of patent lawsuits.
Newegg’s Chief Legal Officer, Lee Cheng, had no plans to settle with the Troll.
“We basically took a look at this situation and said, ‘This is bull$#!% We saw that if we paid off this patent holder, we’d have to pay off every patent holder this same amount. This is the first case we took all the way to trial. And now, nobody has to pay Soverain jack squat for these patents.”
Cheng and his team battled hard against lawyers from Jones Day (the largest law firm in the United States) and Quinn Emanuel (Google and Samsung’s favorite lawyers) for close to four years. The fight was worth it because Newegg won and now doesn’t have to pay the Patent Troll a single cent.
Thanks to Newegg, all these lawsuits filed against other e-commerce companies are now considered bogus. The deciding factor for the jury was a 1984 CompuServe ad presented by Newegg that rendered the shopping cart patent claims by Soverain obsolete.
But the fight isn’t over for Newegg. We know there are plenty of more Patent Trolls out there just waiting to get their grubby little hands on some free money. If you’re like us and don’t believe in feeding these Trolls, show your support by wearing our official “Don’t Settle” t-shirt and show the world what you think of Trolls.