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Newegg Wins: Supreme Court Declares "Game Over" for Soverain Shopping Cart Patents

(January 13, 2014)

LOS ANGELES, CA -- (Marketwired) -- 01/13/14 -- Newegg.com is pleased to announce that the United States Supreme Court categorically denied notorious patent troll Soverain Software's petition for writ of certiorari to rehear a January 2013 decision of the Court of Appeals for the Federal Circuit that completely invalidated as obvious Soverain patents purporting to cover basic online functionalities, such as the online shopping cart. There is no further appeal to this decision.

"Patents held by organizations like Soverain are like vampires -- unproductive, undead, unholy and intent on sucking economic and entrepreneurial lifeblood out of society," said Lee Cheng, Newegg's Chief Legal Officer. "When these patents and the abusive patent assertion business model are exposed to the light of day, they turn to dust.

"We are extremely pleased the Supreme Court recognized Soverain's petition as nothing more than a desperate attempt to continue its lawsuit factory. Soverain likely spent several million dollars in legal fees and on PR agencies to try to revive its franchise," Cheng added. "They hired former US Solicitor General Seth Waxman of the famed Wilmer Hale firm, who has become the go-to counsel of last resort for patent trolls, and David Nelson of the Quinn Emanuel firm, who has represented plaintiffs and defendants against Soverain, to keep their franchise on life support. However, even famous, brilliant and expensive lawyers ultimately could not make the facts and truth, what they are not."

Newegg's determination to end frivolous intellectual property litigation is emblematic of growing industry-wide support to protect innovation by defeating patent trolls such as Soverain.


"Patent trolls have become an expensive tax on innovation in this country," said Julie Samuels, Senior Staff Attorney at the Electronic Frontier Foundation, where she holds the Mark Cuban Chair to Eliminate Stupid Patents. "Newegg should be commended for taking the fight back to the troll and making the world safer for innovation by eliminating one of the nastier patents out there."

As an innovator in the field of online commerce, Newegg has great respect for inventors and for valid intellectual property rights, and supports a strong and rational patent system. Newegg opposes patent law abuse, particularly unfair attempts to impose a private tax on the hard work and innovation of others.

Conversely, Soverain Software derived almost all of its revenue from litigation settlements. Soverain filed dozens of cases in federal court in the Eastern District of Texas (EDTX), suing Newegg and nearly every other major retailer, claiming a right to receive royalties for its now invalidated patents. Due to the high cost of defense, nearly every other defendant settled. In the district court actions, Soverain had obtained settlements and won EDTX jury verdicts estimated at over $70 million. Before its patents were invalidated, hundreds of millions of dollars more in judgments and settlements were at stake because Soverain could have sued any company doing business online.

About Newegg Inc.
Newegg Inc. is the leading electronics-focused e-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 25 million registered users and offers customers a comprehensive selection of the latest consumer electronics 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. The Newegg Hybrid Center is located at 18045 Rowland St., City of Industry, CA 91748.

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