IP: Federal Circuit weakens Internet patent troll model

The recent decision in Soverain v. Newegg offers several tips for online retailers named as patent defendants

On Jan. 22, the Federal Circuit found that the claims of three patents Soverain Software asserted against Internet retailer Newegg were obvious. While procedurally surprising, because the question of obviousness never reached the jury in the trial court, the decision is consistent with earlier rulings that cumulatively undermine the business model of the infamous internet patent troll.

The story of the Soverain patents is a familiar one: A company (in this case Open Market) developed an Internet software product during the dot-com bubble and got patents on the technology. Unable to successfully sell its product, the company attempted to license its patents. The market responded with indifference and the patents were ultimately purchased out of bankruptcy.

Soverain also asserted a patent alleged to cover the use of hypertext and URLs to make customer transaction details, such as order status or details of a customer’s order, available online. The CompuServe Mall also allowed consumers to use their confirmation number to access all the information about that transaction that one might ever need, but on a pre-Internet network. Newegg’s expert testified that the use of hypertext and URLs are basic functionalities of the World Wide Web and that anyone who could get access to information from a customer’s transaction records would understand how to use HTML to present that information at various levels of detail. The court again agreed that this was “a routine incorporation of Internet technology into existing processes.” Similarly, the court found that prior art systems for network logins or transaction identifiers rendered obvious the session identifier claims.  

Expert opinions are not required on matters of law

Contributing Author

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Julianne Hartzell

Julianne M. Hartzell is a litigation partner at Marshall, Gerstein & Borun LLP. She has litigated patent, trademark, copyright, and trade secret matters in...

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