Newegg, a leading online retailer of electronic accessories, saw its persistence pay off last week as a patent dispute involving fundamental ecommerce technologies fell in its favor after a lengthy appeals process.
The patents at issue were held by Soverain Software, a company that has formerly pursued a variety of aggressive licensing strategies which produced lucrative agreements with Amazon, The Gap, Avon and several other prominent online retailers. According to Ars Technica, Newegg decided to stand and fight what it believed were questionable tactics - even as dozens of others quietly capitulated to undisclosed, out-of-court settlements. While Newegg was originally ordered to pay Soverain approximately $2.5 million in licensing fees in 2010, that decision has now been reversed on appeal with the patent invalidated on account of obviousness.
According to Ars Technica, Soverain had been been claiming rights to such fundamental ecommerce technologies as adding items to a digital shopping cart and proceeding through checkout. As Newegg was able to prove, the prior art cited by Soverain was dissimilar from the coding and functionality designed by Newegg in several significant ways.
As a result, Soverain's standing litigation with Home Depot, Best Buy, RadioShack and others will be dismissed as well. When reached for comment, Newegg's chief legal officer Lee Cheng classified the case as a decisive victory for honest online businesses whose innovations "truly benefit society."