The Federal Circuit issued a ruling last week vacating a Texas jury’s $2.5 million verdict against Newegg, Inc., and invalidating three “shopping cart” patents purportedly owned by Soverain Software, LLC.

Soverain filed claims against major online and brick-and-mortar retailers for infringement of patents it holds based an e-commerce software system called “Transact,” which allows online retailers to provide “shopping carts” for users.  Developed in 1996 by a company called Open Market, the Transact software and “shopping cart” patents were acquired by Soverain in 2002.  Soverain then sued seven online retailers who use the shopping cart system.  All but Newegg opted to pay Soverain for licenses rather than proceed with litigation.

After a jury trial in the District Court for the Eastern District of Texas, Newegg was found to have infringed two of Soverain’s three patents and Soverain was awarded $2.5 million in damages.  On January 17, the Federal Circuit invalidated the jury verdict and reversed the district court’s ruling , holding that all of the asserted claims are invalid based on obviousness.  In so holding, the court rejected Soverain’s argument that the licensing of the patents provided evidence of their nonobviousness, noting that “the software was abandoned by all of its initial licensees,” and “is not used by those who bought litigation peace.”

This holding strikes a blow against Soverain, a company which has aggressively sought patent verdicts against a number of major retailers.