Soverain Software LLC v. Newegg Inc. ( 2013 )

United States Court of Appeals
for the Federal Circuit
______________________
SOVERAIN SOFTWARE LLC,
Plaintiff-Appellee,
v.
NEWEGG INC.,
Defendant-Appellant.
______________________
2011-1009
______________________
Appeal from the United States District Court for the
Eastern District of Texas in case no. 07-CV-0511, Judge
Leonard Davis.
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Decided: September 4, 2013
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SETH P. WAXMAN, Wilmer Cutler Pickering Hale and
Dorr LLP, of Washington, DC, filed a combined petition
for panel rehearing and rehearing en banc and a supple-
mental brief for plaintiff-appellee. With him on the
petition and supplemental brief were THOMAS SAUNDERS
and MEGAN BARBERO; DAVID NELSON and ROBERT B.
WILSON, Quinn Emanuel Urquhart & Sullivan, LLP, of
New York, New York; DANIEL H. BROMBERG, of Redwood
Shores, California; ROBERT GREENE STERNE, JON E.
WRIGHT, and SALVADOR M. BEZOS, Sterne, Kessler,
Goldstein & Fox, of Washington, DC.
2 SOVERAIN SOFTWARE v. NEWEGG
EDWARD R. REINES, Weil Gotshal & Manges LLP, of
Redwood Shores, California, filed a response to the com-
bined petition for rehearing and a supplemental brief for
defendant-appellant. With him on the response and
supplemental brief were KEVIN M. FONG, Pillsbury Win-
throp Shaw Pittman, LLP, of San Francisco, California;
KENT E. BALDAUF, JR. and DAVID C. HANSON, The Webb
Law Firm, of Pittsburgh, Pennsylvania.
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ON PETITION FOR REHEARING
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Before NEWMAN, PROST, and REYNA, Circuit Judges.
PER CURIAM.
Rehearing is granted for the purpose of clarification of
the court’s rulings with respect to claims 34 and 35 of
Patent No. 5,715,314. At Soverain Software LLC v.
Newegg, Inc., 705 F.3d 1333, 1337 (Fed. Cir. 2013), the
court held that claim 34 was representative of the “shop-
ping cart” claims in litigation. The parties requested
rehearing, pointing out that although claim 34 was the
subject of litigation of the shopping cart claims, the dis-
trict court’s judgment referred to claim 35, not claim 34.
This court granted rehearing, to assure that the claims at
issue in this litigation were adequately and fairly as-
sessed at trial and on appeal. Since claim 35 had not
been briefed or argued on the appeal, we requested sup-
plemental briefing on the following two aspects:
1. The treatment at trial of the additional limita-
tion in claim 35.
2. Whether claim 34 was treated as, or is properly
deemed “representative” of the shopping cart
claims including claim 35.
SOVERAIN SOFTWARE v. NEWEGG 3
Soverain Software LLC v. Newegg Inc., 2011-1009, 2013
WL 2631445 (Fed. Cir. June 13, 2013). The court received
briefs from each of Soverain and Newegg on June 24,
2013, and responses on July 9, 2013. We have considered
the issues with respect to claim 35, based on the parties’
initial briefing and arguments and in light of the supple-
mental briefing.
DISCUSSION
The claims at issue are as follows:
34. A network-based sales system, comprising:
at least one buyer computer for operation by a us-
er desiring to buy products;
at least one shopping cart computer; and
a shopping cart database connected to said shop-
ping cart computer;
said buyer computer and said shopping cart com-
puter being interconnected by a computer
network;
said buyer computer being programmed to receive
a plurality of requests from a user to add a
plurality of respective products to a shopping
cart in said shopping cart database, and, in
response to said requests to add said products,
to send a plurality of respective shopping cart
messages to said shopping cart computer each
of which comprises a product identifier identi-
fying one of said plurality of products;
said shopping cart computer being programmed to
receive said plurality of shopping cart mes-
sages, to modify said shopping cart in said
shopping cart database to reflect said plurali-
ty of requests to add said plurality of products
to said shopping cart, and to cause a payment
4 SOVERAIN SOFTWARE v. NEWEGG
message associated with said shopping cart to
be created; and
said buyer computer being programmed to receive
a request from said user to purchase said plu-
rality of products added to said shopping cart
and to cause said payment message to be acti-
vated to initiate a payment transaction for
said plurality of products added to said shop-
ping cart;
said shopping cart database being a database of
stored representations of collections of prod-
ucts, and said shopping cart computer being a
computer that modifies said stored represen-
tations of collections of products in said data-
base.
35. A network-based sales system in accordance
with claim 34, wherein said shopping cart
computer is programmed to cause said pay-
ment message to be created before said buyer
computer causes said payment message to be
activated.
The district court, criticizing Newegg’s evidence on
the issue of obviousness, removed that issue from the jury
and decided it as a matter of law. The district court
directed its substantive analysis to limitations in claim
34; e.g., Soverain Software LLC v. Newegg Inc., 836 F.
Supp. 2d 463, 478–79 (E.D. Tex. 2010) (discussing expert
testimony on limitations of claim 34); and discussed the
issue of infringement with respect to limitations in claim
34, e.g., id. at 468 (“Newegg first argues that there was no
legally sufficient evidence from which a reasonable jury
could conclude that the accused Newegg system meets all
the limitations of independent claim 34 of the ’314 patent
. . . .”). The district court did not mention any limitation
of claim 35 in its discussion of either validity or infringe-
ment.
SOVERAIN SOFTWARE v. NEWEGG 5
On the appeal, the parties again focused their presen-
tations and argument solely on claim 34. Newegg’s brief
stated that Soverain “asserted” claim 34, and also that
claim 34 is “representative of the shopping cart claims.”
Newegg Br. 6. Soverain neither objected to nor corrected
this recitation. The parties cited the evidentiary record,
discussed the prior art (primarily the CompuServe Mall
system) and argued the district court’s decision to remove
the question of obviousness from the jury. Claim 35 was
not briefed on this appeal, and was not mentioned in the
argument of the appeal. Soverain’s brief stated that claim
35 was in suit, but did not discuss the specific limitation
in that claim, while extensively discussing the limitations
of claim 34. At oral argument the parties argued claim
34, and did not mention claim 35. This court treated
claim 34 as “representative” of the shopping cart claims in
suit, and held claim 34 invalid on the ground of obvious-
ness.
Both sides requested rehearing to resolve any confu-
sion as to the status of these claims. We invited the
parties to provide information beyond that which they
had previously presented. In their supplemental briefs
the parties discuss the testimony of Newegg’s expert
witness Mr. Tittel on the CompuServe Mall prior art with
respect to the “payment” limitation of claim 35:
Q. Was this screen [summarizing the customer’s
payment selections] created by the server before it
was displayed?
A. Of course it was.
Q. After it was displayed, could it be accepted or
activated?
A. Yes.
Trial Tr. 66 ll.7–12, ECF No. 394 (brackets in Soverain’s
Br.).
6 SOVERAIN SOFTWARE v. NEWEGG
Soverain states that this evidence is inadequate to
impart invalidity to claim 35. Newegg responds that
there was no cross-examination on this aspect, and points
out that in its supplemental briefing Soverain does not
provide additional relevant citations or argument.
Newegg states that no issue distinguishing the obvious-
ness of claim 35 from that of claim 34 was presented at
the district court or on this appeal, citing SIBIA Neurosci-
ences, Inc. v. Cadus Pharm. Corp., 225 F.3d 1349, 1359
(Fed. Cir. 2000) (issues not raised with respect to depend-
ent claims are deemed waived).
On the question of whether the payment step of claim
35 was embodied in the prior art CompuServe Mall, no
contrary argument is here proffered. Soverain devotes
most of its supplemental briefing to reargument of issues
resolved in the court’s prior opinion, especially relating to
the terms “product identifier” and “shopping cart data-
base.” We discern no basis for departing from the court’s
analysis in its prior opinion. See, e.g., 705 F.3d at 1339
(“The distinction proposed by Dr. Shamos and advanced
by Soverain is not embodied in the claims and not reflect-
ed in the claim construction.”).
In its supplemental briefing Soverain does not direct
attention to any evidence in contradiction to the testimo-
ny of Newegg’s expert as to the content of claim 35. There
was no genuine factual dispute that the payment element,
set forth in claim 35, is present in the prior art Com-
puServe Mall. See Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986) (factual dispute only “genuine” if the
evidence is such that a reasonable jury could return a
verdict for the nonmoving party).
Claim 35 was not separately argued to the district
court. When a dependent claim and the independent
claim it incorporates are not separately argued, precedent
guides that absent some effort at distinction, the claims
rise or fall together. See, Gardner v. TEC Sys., Inc., 725
F.2d 1338, 1350 (Fed. Cir. 1984) (en banc) (“Gardner has
SOVERAIN SOFTWARE v. NEWEGG 7
not argued the validity of the remaining claims in suit,
claims 3, 4, and 8, apart from the validity of claim 1, from
which they depend. We cannot discern for ourselves any
independent basis for their validity. We therefore affirm
the holding of invalidity of these claims as well.”); see also
SIBIA Neurosciences, 225 F.3d at 1359 (“in this appeal,
SIBIA has failed to argue the validity of the dependent
claims separately from the validity of claim 1. Thus,
these claims do not stand on their own, and given our
determination that claim 1 is invalid, the remaining
dependent claims must fall as well.”).
On this rehearing, Soverain has not provided any new
information concerning the specific limitation of claim 35.
The inclusion of an additional known element from a
similar system, as set forth in claim 35, is subject to
review on established principles, as summarized in KSR
International Co. v. Teleflex Inc., 550 U.S. 398, 417 (2007)
(an unobvious combination must be “more than the pre-
dictable use of prior art elements according to their estab-
lished functions”). The supplemental briefing reinforces
the absence of dispute that that the element in claim 35 is
in the CompuServe Mall prior art.
On consideration of the additional briefing and argu-
ments, we confirm that claim 34 is representative of the
“shopping cart” claims, including claim 35, and conclude
that dependent claim 35 is invalid on the ground of obvi-
ousness. The court’s judgment is amended accordingly.
REHEARING GRANTED; JUDGMENT AMENDED