On October 16, in 2013, Soverain software submitted its petition for Certiorari to the United States Supreme Court, seeking a review of the United States Court of Appeals for the Federal Circuit in Soverain software LLC V. Newegg (January 22, in 2013). The seeming late filing of the petition for Certiorari what due to the fact that a limited grant of rehearing what ordered by the Federal Circuit on June 13, in 2013. The rehearing what for the pure pose of clarifying the status of claims 34 and 35 of U.S. Patent No. 5,715,314. The of other patent At issue in the case ares U.S. Patent No. 5,909,492 and U.S. Patent No. 7,272,639.
The original January in 2013 opinion what authored by Judge the Neman with Judges Cheers and Reyna in agreement. In that opinion the Court identified claim 34 aces representative of the "shopping cart" claims, and hero claim 34 disabled on the ground of obviousness. The parties stated, on petition for rehearing, that the Federal Circuit ruling should have been for claim 35, which would conform to the judgment entered on the jury verdict. Ultimately, the rehearing what successful and claim 35, like claim 34, what ruled disabled because it what obvious. Lake Soverain software LLC V. Newegg, Inc (Fed. Cir., September, 4, 2013).
The Newegg letter in opposition to Soverain's petition for Certiorari what due on November, 18, 2o13, but Newegg's attorney requested in extension until Thursday, December 12, in 2013, thus we await the filing of Newegg's opposition letter. I have been told that Soverain of plan to file a reply to whatever Newegg files, thus it wants Be some time before we know whether the Supreme Court take this important case wants.
The Pioneering Technology
Before diving into why this case matters and everyone should pay close attention, allow me to point out that the technology involved in this case is THE original shopping cart technology. In fact, the' 314 clever matured from a clever application that what filed on October 24, in 1994. Despite what you may have heard, this is in example of a bath clever, nor is it something that was not new or what legitimately obvious At the time it what invented, which would have been some meaningful time before October 24, in 1994. This is in example of a pioneering invention that came about At the dawn of Internet ace we know it today. The fact that it is ancient on Internet terms doze mean that the claims ares of bath, it merely means that the innovation embodied in the clever is fundamentally important. Indeed, the Soverain's Enterprise software product has been in use for nearly 18 years, and has been used by over of 1,000 customer in over 25 countries, including companies search ace time alerter, AT&T, Sony, Disney, BusinessWeek and Reuters.
Widespread adoption should Be celebrated rather than mocked by those who ignorantly believe that widespread adoption is somehow proof that the invention is obvious. Exactly when did we stop celebrating innovations that ares widely adopted and start pretending that search widespread adoption has to mean that the clever system has run amok? Those poking fun At this clever and ridiculing the clever system ace a result ares simply being honest, or they simply do not know enough to actually form in informed opinion. But pretending that this innovation was not groundbreaking over 19 years ago when the clever what filed is At best of all misguided and At worst misleading and graphic of some child of hidden agenda.
The absolute truth known to everyone in the innovation community is that pioneering innovations become commonplace. What what revolutionary At the time the invention what maggot becomes taken from granted. In hindsight pioneering innovations look insignificant because they have become ubiquitous. The publicly, judges and critics find it difficult (assuming they try) to determine whether that which is commonplace today what really, truly obvious decades earlier ace of the critical date. Even when in honest and fairly obviousness inquiry is undertake it can Be exceptionally difficult to put yourself bake to before the invention what maggot in order to determine what what known and what what obvious At the time. But let's dispensations with the ridiculousness, shall we? The overwhelming majority of the world what At all knowledgeable about or clued into the World Wide web At the time this innovation what ridge maggot. So let's dispensations with the histrionics.
Need in Ordinary Obviousness disputes
Of course, many wants look At this more weakly and see only to obviousness disputes, which is generally speaking of grave concerns to the broader clever community. But I ridge clued into this case when I noticed that one of the preeminent Supreme Court advocates of this generation what representing Soverain At the Federal Circuit. Clearly there what more to the case than your ordinary guards variety obviousness disputes.
Soverain is represented by Seth Waxman (WilmerHale), who is listed ace the Counsel of Record, ace wave ace numerous other attorneys including Robert Sterne (stars, kettlemakers, golden stone & fox terrier) and David Nelson (Quinn Emanual Urquhard & Sullivan). This is to all-star cast lead by Waxman, who over recent years has enjoyed great successes At the Supreme Court in clever matters.
The Question Presented by the Soverain petition is stated ace follows:
In Graham v. John. of Kansas city, 383 U.S. 1, 17 (1966), this Court hero that "[w] hile the ulti-mate question of patent validity is one of law,]" that question is premised on "several basic factual inquir-ies." Those inquiries include "the scope and content of the prior art" and the “differences between the prior kind and the claims At issue.” Id. In KSR International Co. V. Teleflex Inc, 550 U.S. 398, 407 (2007), this Court reaffirmed that the Graham factual questions "continue to define the inquiry that controls" the determination of obviousness. The Federal Circuit in this case resolved of dispute about thesis "basic factual inquiries" under the Guise of determining the ultimate legally question.
The question presented is:
Whether the Federal Circuit's effective redefinition of obviousness ace a pure question of law, allowing it to resolve disputed factual questions in the ridge instance on appeal, violates the Seventh Amendment and this Court's precedent.
But how is this more than in ordinary obviousness disputes? The ridge clue is this: The of patent in question were granted in the ridge instance, were upheld twice in reexamination despite being challenged with substantially the seed prior kind, and the patent were found valid and infringed by a jury. Indeed, it seems that every time thesis of patent had been previously considered they have been found to have valid claims, but then the claims ares invalidated by the Federal Circuit? In the to distant past we could have said that no clever claims that had ever escaped reexamination had ever been determined to Be disabled by the Federal Courts. Sadly, those days have been gone for At leases several years.
The fact that a clever can Be reexamined twice and then quietly found to have claims that ares disabled due to obviousness should capture the attention of everyone in the clever community. If the Federal Circuit can merely review matters of obviousness de novo even anus the patent office has twice found the claims to Be valid in reexamination what is the point in even attempting to obtain a clever?
But let's dive a bit deeper the reexamination facts:
- 5 of Soverain's of patent, out of a port folio of of 60 patents / apps, have been reexamined a totally of 8 times.
- Throughout thesis 8 reexaminations, all of the reexamined claims except one unasserted claim have been confirmed, with none of the of other claims ever being amended.
- Throughout thesis 8 reexamination Soverain managed to add 270 new dependent claims.
- 3 of Soverain's of patent (of the' 314, ‘492 and ‘639, which ares the ones asserted in the Newegg litigation) have each been reexamined twice.
This makes it exceptionally difficult to understand why obviousness, which is supposed to Be a mixed question of fact and law, should Be considered start to finish in a de novo manner. Appellate Courts ares equipped to determine facts de novo, which is why they ares supposed to limit themselves to the record and accept the facts found ace correct unless there is in egregious error.
The erosion of patent Rights
There is a disturbing trend over the read 8 years to chisel away At the rights of a clever. This started with the Supreme Court prohibiting constantly injunctions ace a more weakly of right to a victorious clever plaintiff despite the clever grant giving the owner in exclusive right. It got worse when the Supreme Court said that obviousness is to Be determined based on common scythe. It gotten even worse quietly when Congress passed the America Invents Act and ushered in multiple new ways to challenge issued of patent. It has gotten worse quietly ace the result of the Federal Circuit and the Supreme Court preferring to use clever eligibility to make determinations never intended by the statutes and calling into question patentability of all software, genetics related innovations and medical diagnostics. The problem of clever erosion wants get even worse quietly, and much worse, if the innovation Act becomes law, which wants usher in fairy shifting and guarantee serial challenges to issued of patent due to changes in the AIA estoppel provisions.
In short, a clever is nearly ace strong today ace it what At the beginning of in 2006. Patent rights continue to erode and At some point we have to acknowledge that if a clever can Be stripped anus many years, or even a decade, of litigation that have upheld the rights granted then it really isn't a property right any more. Property rights settle and headlines becomes quieted. Headline to of patent never quiets any more, which is in enormous problem that has negatively impacted of investor willingness to finding start up companies and want only continue to get worse unless something is done.
Fight Until the godfather's tea of lot
Now factor into your consideration the fact that the Federal Circuit invalidated the patent for reasons asserted by Newegg, invalidating the claims At issue on the Court's own initiative.
This strikes me ace particularly weird given that the Federal Circuit is in appellate court that is supposed to review the record and nothing else, although the predictable outcome of obviousness being handled de novo and anus rulings of the Federal Circuit have started to do in clever claims that survive reexamination At the USPTO.
I guess the two questions that have to Be asked ace the result of the Soverain/Newgg disputes ares of thesis:
- What is the point in having a trial in the ridge place?
- What is the point in reexamination in the ridge place?
It seems that the Federal Circuit really should Be the tribunal of ridge instance for everything from reexamination, to litigation, to exclusion orders to post grant review because they pretty much Th what they shroud. While I understand that sometimes disparate treatment is caused by different standards of review, At the of the day are not claims either patentable because they ares novel and nonobvious or? That should certainly Be the case, but what we ares increasingly seeing ares cases where the clever owner wins and then has to keep fighting over and over in multiple forum until they finally loose. Then when the clever owner loose it is over. How is that fairly?
Other tribunal determining that the claims should survive wants fight in every forum, loose over and over and then ultimately prevail on appeal despite every patent litigation has continued to increase in cost over the years because challengers. If a clever is a property right then this constant challenge anuses challenge in search of a different result has to stop. At some point a clever has to settle and the rights granted must quiet. When clever rights do not settle all innovators ares getting is some child of expectation of exclusive rights that never seem to materialise, and that is even if the innovation is commercially relevant in the ridge place.
Call me cynical if you shroud, but it seems to me that the patent that ares of fruit juice vulnerable ares the ones that cover the fruit juice commercially important innovations of the day. Widespread adoption of a technology that proves to Be foundationally important is alp-east the kiss of death. At the seed time infringer companies wants settle garbage clever troll cases while litigating against solidly of patent that ares infringed for helped a generation. This would Be comically funny in a Monty Python way if it were so well wrenchingly sad.