As patent reform moved into the political spotlight during the last Congress, one patent that kept coming up was the "online shopping cart." It seemed to resonate as a technology that clearly shouldn't have been patented.

By the time it started being brought up in Congressional hearings, though, the shopping cart patent was dead. Its owner, Soverain Software, was beaten when computer retailer Newegg won an appellate ruling invalidating its patents and throwing out the $2.5 million jury verdict against it.

That ruling also wiped out Soverain's biggest win: a 2011 verdict against Avon and Victoria's Secret, in which the companies were ordered to pay almost $18 million and a "running royalty" of about 1 percent, for infringing the same patents.

The apparel companies should have been able to coast on the same legal trail created by Newegg's win. But instead of admitting defeat, Soverain actually hired more law firms and contested the appeal by Victoria's Secret and Avon.

Yesterday, a panel of judges on the US Court of Appeals for the Federal Circuit overturned Soverain's trial win [PDF] and re-affirmed its decision that the "shopping cart" patent, and a related e-commerce patent, were invalid.

Full and Fair

Normally, when a patent-holder loses, outstanding appeals wouldn't proceed—that's because longstanding legal rules prevent parties from re-litigating the same issues in multiple courts. But Soverain argued that those rules should not apply "because Soverain has not had a full and fair opportunity to litigate the issue of obviousness."

It's true that the East Texas jury that found in Soverain's favor didn't address the issue of whether its patents were obvious. In fact, Soverain itself stopped the jury from considering the issue. The patent-holding company filed a motion arguing that its patents were non-obvious as a matter of law, and the district court judge sided with it. Obviousness was off the table as a courtroom defense for Newegg.

But Newegg brought the issue up again on appeal, and—apparently to Soverain's great surprise—won. In the Avon/Victoria's Secret appeal, Soverain complained that "it did not have the incentive to fully litigate the issue of nonobviousness on appeal."

Essentially, Soverain is saying: we won so big on obviousness at trial, how could we have possibly known that might be the important issue on appeal? It just isn't fair.

But it actually is fair, the appeals panel explained:

Soverain does not dispute that it was represented by distinguished counsel in that appeal and that the amount in controversy was significant.... Specifically, Soverain contends that it would have raised different or additional arguments on appeal if it had known that this court might reverse the district court on invalidity rather than only granting a new trial. But Soverain does not cite any case to support the notion that a full and fair opportunity to litigate is lacking where a party might have argued differently on appeal... Soverain has not identified any significant new arguments that were not in fact raised in the earlier appeal.

Soverain argued that its patented shopping cart was special, because it used "product identifiers." The concept of "product identifiers" wasn't present in the CompuServe Mall, the "prior art" technology that knocked out Soverain's patent.

But the appeals court noted Soverain did in fact talk about "product identifiers" in the Newegg case—it just didn't win the day.

Victoria's Secret didn't immediately respond to a request for comment. Avon declined to comment.

A Soverain spokesperson told Ars, “We respectively disagree with the court’s opinion and do not feel that justice was served.”

"I hope Soverain continues their appeal, using the most expensive possible appellate counsel, and pushes their meritless litigation activities against other defendants," said Newegg's top lawyer, Lee Cheng. "After this decision, if they haven't already crossed the line into sanctionable behavior, they will if they keep pursuing people based on the stupid shopping cart patents."