CAFC Defies SCOTUS and Violates Constitution in Soverain v. Newegg

CHICAGO, Dec. 20, 2013 /PRNewswire/ -- Soverain Software has filed its reply brief to the Supreme Court in its patent infringement case against computer retailing giant, Newegg.  Soverain's brief explains that the Court of Appeals for the Federal Circuit (CAFC) has violated the Supreme Court's longstanding precedent and the Seventh Amendment.

"The Federal Circuit's reckless ruling simultaneously attempts to overrule the Supreme Court's decisions in Graham and KSR and violates our Constitutional right to a jury trial," Soverain President Katharine Wolanyk says.  "This decision is clearly wrong and an egregious example of appellate ambush, improper process and misapplication of the law.  This case goes well beyond the patent system – it's about the law.  Soverain must prevail."

Seth Waxman, of Wilmer Cutler Pickering Hale and Dorr, a former Solicitor General and Soverain's lead attorney, says, "This case is the most extreme example of what former Chief Judge Mayer recently described in Highmark v. Allcare as the Federal Circuit's 'appellate overreach' through its 'increasing infatuation with de novo review of factual determinations.'"

Waxman says, "Soverain's patents are revolutionary.  They were filed in 1994 and 1995, at the dawn of the Internet.  That the patents disclosed now-familiar functionality is but a testament to their inventiveness and commercial success.  Claims cannot be invalidated simply because they involve inventive features that later become commonplace.  That would distort the obviousness analysis through hindsight in exactly the way this Court cautioned against in Graham and KSR."

Soverain v. Newegg involves patents which have been consistently found non-obvious—twice by the Patent and Trademark Office on reexamination, by a federal jury in another case, and by the trial court in this case.  Chief Judge Leonard Davis ruled Soverain's patents were infringed by computer retailing giant Newegg.  Judge Davis found that Newegg's invalidity evidence did not come close to meeting its burden of proof to go to the jury.  On appeal, the CAFC improperly reviewed conflicting evidence, disregarded Soverain's evidence and expert testimony, and overreached its authority in wrongly invalidating Soverain's patents -- despite Newegg only asking for a jury trial.

Wolanyk says, "If the Federal Circuit thinks that the burden of clear and convincing evidence was met in this case, then the proper legal process is to send the issue to the jury, not to invalidate Soverain's patents.  This is a drastic change in the law and must be reviewed by the Supreme Court before random invalidation of patents becomes the new reality."

If Newegg had actually asked for a judgment of invalidation — rather than the requested jury trial — Soverain would have briefed and argued that issue.  In its effort to defend the CAFC's unexpected decision, Newegg walks back its own concession that there was conflicting evidence at trial "of exactly the kind that the jury should consider."  Newegg also attempts to divert attention from its infringement and the CAFC's overreach by disparaging Soverain's patented technology and misstating the record.  Despite Newegg's claims to the contrary, this case involves technical and complicated issues of material fact, which are issues for a jury, not an appellate court.

Court documents and information on Soverain v. Newegg can be found on Soverain's website at http://soverain.com/asp/news/news_case_summaries.asp

ABOUT SOVERAIN SOFTWARE

Soverain Software LLC provides ecommerce software and services for enterprises, focusing on the publishing, news syndicate and digital content industries.  Soverain's enterprise software product Transact has been in continuous use for 18 years, used by over 1,000 companies in over 25 countries, including well-known companies such as Time-Warner, AT&T, Sony, Disney, BusinessWeek and Reuters.  Our patented Internet commerce technology benefits both merchants and consumers by enabling secure and flexible online transactions.

SOURCE Soverain Software LLC