August 11, 2010, 5:32 PM

Newegg loses the latest round in its shopping cart infringement suit

A U.S. District Court awards Soverain Software judgments on several points.

Mark Brohan

Research Director

Lead Photo

A judge in the U.S. District Court for the Eastern District of Texas has ruled against online retailer Newegg Inc. in a patent infringement law suit over shopping cart software and other related e-commerce applications.

This afternoon judge Leonard Davis ruled against Newegg and in favor of Chicago-based Soverain Software LLC in a case filed three years ago. Soverain Software LLC, which sells transaction management technology, filed suit against Newegg Inc. and other big web merchants in November 2007. At the time Soverain Software accused Newegg, CDW Corp., Systemax Inc., Redcats USA and Zappos.com of infringing on three of its patents that cover the underlying technology that e-retailers use to handle purchases and payments, as well as for their online shopping carts.

Other retailers chose to settle with Soverain Software, but Newegg, No. 12 in the Internet Retailer Top 500 Guide, chose to fight the patent infringement in court. Today, the judge ruled that Newegg has infringed on several patents and ordered Newegg to pay $2.5 million in damages, the amount a jury awarded to Soverain Software when the first round of litigation ended in late April.

 The judge also:

  • Awarded Soverain Software a new trial on damages for Newegg’s infringement of other related patents.
  • Ordered Newegg to pay Soverain Software an ongoing royalty of 15 cents per infringing transaction for certain patents.
  • Awarded Soverain Software post-verdict damages of $2,900 per day from May 1 until the date of the final judgment.
  • Awarded Soverain prejudgment costs of court.

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