Newegg Opposes Soverain’s Petition for Certiorari

By Press Releases
December 12, 2013

CHICAGO, December 12, 2013 – Soverain Software LLC announces that, after requesting an extension, Newegg Inc. today filed its Brief in Opposition (BIO) to the Supreme Court of the United States, demonstrating the importance of Soverain’s petition for certiorari in the case Soverain v. Newegg.  This appeal has far-reaching ramifications on the issues of property rights, validity of patents, obviousness, and fundamental legal principles such as the Seventh Amendment right to a jury trial and the burden of proof.

Soverain’s President, Katharine Wolanyk, says, “Newegg now denies that the appeals court decided disputed factual issues, despite their attorney conceding at oral argument that there were genuine issues of fact in dispute that needed to be decided by a jury.  The reality is that this case is important enough for Newegg to file a response and we hope the Supreme Court will agree with our amicus briefs and grant certiorari.”  Wolanyk adds, “The Court of Appeals’ ruling in Soverain v. Newegg is an egregious violation of our Seventh Amendment right to a jury trial, and invalidating our patents in this manner is both wrong and a damaging precedent to set for all inventors and patent owners.”

Soverain v. Newegg is a patent infringement case involving three of Soverain’s patents which were filed in 1994 and 1995, in the earliest days of the World Wide Web before the launches of Amazon, eBay, or Internet Explorer.  The patented inventions revolutionized ecommerce by disclosing solutions to key technical challenges in the implementation of systems capable of concurrently processing online transactions for millions of users.  After a trial, Chief Judge Leonard Davis ruled Soverain’s valid ecommerce patents were infringed by computer retailing giant Newegg.  Judge Davis also found that Newegg’s obviousness challenge was so deficient in meeting the burden of proof of clear and convincing evidence that the issue of validity should not even go to the jury.

Newegg appealed and the Court of Appeals for the Federal Circuit (CAFC) overturned Judge Davis and improperly invalidated Soverain’s patents, despite Newegg only having sought a remand for a jury trial on validity.  This appeal could be a case study in legal irregularities, with errors in the opinion (which Newegg concedes), invalidation of an unasserted claim, a rare Rule 50 violation, a seventeen-month delay from oral argument to ruling, and a ruling of invalidity which is in violation of the Seventh Amendment and inconsistent with two rounds of reexamination and the verdict in another jury trial.

Seth Waxman, of Wilmer Cutler Pickering Hale and Dorr, a former Solicitor General and Soverain’s lead attorney, says, “Newegg is taking this case seriously and so should the Supreme Court.  Newegg’s attempt to reargue the facts only confirms that this case should have gone to the jury.”  Waxman says, “The judicial overreach that occurred in this case is not an isolated incident, but rather the acceleration of a trend in the Court of Appeals that presents a broader threat to all who rely on the stability and predictability of the patent system.”

Wolanyk says, “In addition to the original examination by the USPTO, these patents have been reexamined twice – once in 2007 and a second time in 2012 – and all of the reexamined claims were reaffirmed without amendment.  Soverain has gone through three Markman hearings with 78 claim terms favorably construed, had 77 representatives deposed, had over 300 prior art references asserted against its patents, and defended against over 30 law firms.  Our patents are valid and we are confident we will prevail.”

Information on the Soverain v. Newegg case, including a case summary, court documents, and amicus briefs is available at:

http://soverain.com/asp/news/news_case_summaries.asp.

 

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