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How Newegg Defeated The Shopping Cart Patent Troll And Saved Online Retail

Given the fact that we live in an era of expensive patent battles, it is no wonder that every once in a while a patent troll would come up with a seemingly critical patent to blackmail corporate giants into coughing out big money. Soverain Software followed the same strategy, except that a case against Newegg finally brought down doom on it.


shopping cart

Soverain Software had a simple, yet seemingly strong, case. The company claimed that it had the rights to three basic patents which encapsulated the technology used to implement ‘Shopping cart’ in e-retail solutions. Using this, the company went after a number of e-retail giants, including Amazon, bagging millions of dollars along the way.

But when Soverain decided to go after Newegg, little did it know that it may be in for a hard beating. In the first legal battle between the two, Soverain won, with the jury swaying in its favor. However, Newegg found sufficient grounds to appeal the verdict.

According to the legal officer of Newegg, Lee Chang, “We basically took a look at this situation and said, this is bullshit. 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.”

NewEgg basically cited CompuServe Mall, an alternate technology that pretty much accomplished the same function as ‘Shopping cart’ and applies to nearly all cases that Soverain had brought up. In other words, CompuServe served as the final nail in Soverain’s coffin. Soverain tried to argue that its patents are about the same technology as CompuServe but on the internet, yet the jury found that insufficient and ruled in favor of Newegg.

With this victory, the court basically sealed the decision against Soverain and its blackmailing tactics. The patent troll has already settled with a dozen or so e-retail giants, minting millions of dollars from each of them as well as ongoing royalties. But the ruling in the Newegg case trashed the earlier decisions, citing that all shopping cart patent claims were rendered invalid in the light of the CompuServe Mall.

Courtesy: Arstechnica

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