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U.S. Supreme Court refuses to hear Internet shopping patent case

Visitors to the Supreme Court are pictured in the rain in Washington, October 7, 2013. REUTERS/Jason Reed
Visitors to the Supreme Court are pictured in the rain in Washington, October 7, 2013. REUTERS/Jason Reed

By Diane Bartz

WASHINGTON (Reuters) - The U.S. Supreme Court said on Monday it would not take on an Internet technology patent case that pitted a company accused of aggressively enforcing weak patents against another with an equally tough reputation for fighting patent infringement claims.

The closely watched case involved the online shopping site Newegg Inc, which specializes in computer products, and software company Soverain Software LLC, which had accused Newegg of infringing three patents known as the "shopping cart patents," which describe a way to buy products online and pay for them.

Chicago-based Soverain had filed similar lawsuits against a long list of companies, including J. Crew Group, Macy's Inc and Williams-Sonoma.

Against Newegg, Soverain won in the U.S. District Court for the Eastern District of Texas but lost at the U.S. Court of Appeals for the Federal Circuit, which ruled that the three online shopping patents were invalid because they were obvious.

In its filing to the Supreme Court, Newegg argued that the Federal Circuit decision should be upheld. "Petitioner's notorious 'shopping cart' patent merely applies the common sense concept of a shopping cart to the Internet," Newegg said.

Newegg's chief legal officer, Lee Cheng, applauded the decision.

"The witch is dead, hurray," he said. "We are very, very pleased that the Supreme Court has recognized ... these patents should never have been granted in the first place. What we have showed in the Soverain case is the fighting back works."

Soverain President Katharine Wolanyk said, "We're obviously disappointed that the court denied our petition," said Wolanyk. "It's a really tough time to be a patent owner."

There are a variety of bills before Congress aimed at reining in what many tech companies complain is frivolous patent litigation.

Patrick Leahy, chairman of the Senate Judiciary Committee, has sponsored legislation aimed at targeting patent assertion entities (PAEs) - companies often known derisively as "patent trolls" - which buy or license patents and then extract licensing fees or file infringement lawsuits seen as frivolous.

The U.S. House of Representatives passed a bill in December that would encourage judges to award fees to the winner of an infringement lawsuit if the judge deems the lawsuit unfounded.

The White House urged Congress last June to take steps to curb abusive patent lawsuits that have sprung up in recent years, especially in the technology sector.

The case is Soverain Software LLC v. Newegg Inc., 13-477, U.S. Supreme Court.

(Reporting by Diane Bartz; Editing by Ros Krasny and Jonathan Oatis)

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