Soverain Software

Soverain Software LLC was a Chicago-based company which owned patents for its ecommerce technology products. The company held patents for digital shopping carts commonly used on e-commerce websites, such as Amazon.com and collected royalties on these patents, but ultimately their patents were invalidated. Soverain Software has been characterized as a patent troll.[1][2][3][4]

Soverain also claimed to own, sell, and maintain an enterprise software product called Transact, which, according to the company, had existed for nearly 18 years and had been used by over 1,000 customers in over 25 countries, including companies such as Time-Warner, AT&T, Sony, Disney, BusinessWeek and Reuters.[5] However, this is disputed,[6] and no evidence that the company ever developed or sold software products is known to exist.

History

In 2003, Soverain Software acquired some of the assets of bankrupt Divine, a Chicago software firm which itself had acquired Open Market, a Boston internet startup, in 2001. Among the assets acquired were the e-commerce software product Transact, and various patents, including patents on the "electronic shopping cart" – essentially, patents on the idea of having a "shopping cart" in which to save items to be purchased in a single transaction, rather than having to purchase each item as an individual transaction.

Soverain did not further develop or market Transact, but instead focusing its business model on enforcing their patents.

Patent infringement lawsuits

On January 12, 2004, Soverain sued Amazon.com and Gap Inc. in the U.S. District Court for the Eastern District of Texas. Gap settled with Soverain in February 2005 under undisclosed terms. In August that year, Amazon settled the case for $40 million.[7] One of the patents involved a shopping cart mechanism used for online shopping.

In 2010, Soverain Software filed a suit against several e-commerce companies, including Nordstrom, Macy's, Home Depot, Radioshack, Kohl's and Newegg alleging infringement of U.S. Patents No. 5,715,314 , No. 5,909,492 and No. 7,272,639 which relate to the concept of a digital shopping cart, similar to the 2004 case. When the case went to court in 2010, all defendants except Newegg had settled. Initially, Newegg was found to have infringed the patents in suit and Soverain was awarded a judgement of $2.5 million fine instead of the $34 million claimed by Soverain.[1]

On January 22, 2013, the U.S. Court of Appeals for the Federal Circuit reversed the district court and invalidated claims from all three asserted patents as being obvious in view of the prior art. The judgment against Newegg was vacated.[8][9][10][11][4] The ruling of invalidity put a stay on the remaining lawsuits in progress.[12]

On October 16, 2013, Soverain filed a petition for a writ of certiorari in Soverain v. Newegg to request a hearing with the Supreme Court of the United States.[13] Three amicus briefs were filed by i4i, Professor Eileen Herlihy and MDB Capital who supported Soverain's petition.[14] On January 13, 2014, The Supreme Court denied the petition.[15][16]

On February 13, 2015, a U.S. Court of appeals invalidated Soverain's previous victories over Avon and Victoria's Secret. [17] On March 30, 2015, US District Judge Leonard Davis declared invalid the last of Soverain's patents,[3] after which the company had no substantive assets.

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See also

References
  1. Kyle Wagner (January 28, 2013). "How the "Shopping Cart" Patent Almost Ruined Online Shopping—And How Newegg Beat It". Gizmodo. Retrieved January 29, 2013.
  2. Miller, Roger LeRoy (2014). Business Law Today, Comprehensive: Text and Cases: Diverse, Ethical, Online, and Global Environment (10th ed.). South-Western College/West. p. 150. ISBN 978-1285428932. Retrieved February 14, 2016.
  3. Joe Mullin (April 2, 2015). ""Shopping cart" patent troll shamelessly keeps litigating, and losing". Ars Technica. Retrieved February 14, 2016.
  4. Albanesius, Chloe (January 28, 2013). "Newegg Crushes Patent Troll in Online 'Shopping Cart' Suit". PC Magazine. Retrieved 29 January 2013.
  5. Gene Quinn (December 12, 2013). "Soverainv. Newegg: Not an Ordinary Obviousness Dispute". IP Watchdog. Retrieved December 12, 2013. Despite what you may have heard, this is not an example of a bad patent, nor is it something that wasn't new or was legitimately obvious at the time it was invented, which would have been some meaningful time before October 24, 1994. This is an example of a pioneering invention that came about at the dawn of Internet as we know it today.
  6. "Is Soverain Software a patent troll? Yes". Gizmodo. April 4, 2014. Retrieved September 19, 2015.
  7. "Amazon pays $40 million to settle patent dispute". ZDNet. Retrieved 28 January 2013.
  8. In Soverain Software LLC v. Newegg Inc., No. 11-1009 (Fed. Cir. January 22, 2013)
  9. "Patent Watch: Soverain Software LLC v. Newegg Inc". Retrieved 28 January 2013.
  10. "Soverain Patents Found Valid and Infringed". PR Newswire. Retrieved 28 January 2013.
  11. "Sovertain Software LLC v. Newegg Inc" (PDF). United States Court of Appeals for the Federal Circuit. January 22, 2013. Retrieved 29 January 2013.
  12. How Newegg crushed the “shopping cart” patent and saved online retail, by Joe Mullin - January 27, 2013, arstechnica.com
  13. "Soverain Petition for Cert". Retrieved 20 November 2013.
  14. "Soverain amicus briefs". Retrieved 20 November 2013.
  15. "Internet Patent Owner Loses High Court Bid to Revive Suit". Retrieved 13 January 2014.
  16. "Supreme Court Order" (PDF). Retrieved 13 January 2014.
  17. ""Shopping cart" patent beaten by Newegg comes back to court, loses again". Retrieved 13 February 2015.
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