Court Opinion

ID: 815699
Source: CourtListenerOpinion
Date Created: 2013-01-22 16:11:22+00
Date Added: 2024-06-11T15:22:51.832015
License: Public Domain

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.
                 ______________________

               Decided: January 22, 2013
                ______________________

     ROBERT B. WILSON, Quinn Emanuel Urquhart & Sul-
livan, LLP, of New York, New York, argued for the plain-
tiff-appellee. With him on the brief were DAVID NELSON
and NEIL G. CAVE. Of counsel was PAUL J. RIPP, Williams
Montgomery & John Ltd., of Chicago, Illinois.

    EDWARD R. REINES, Weil, Gotshal & Manges, LLP, of
Redwood Shores, California, argued for the defendant-
appellant. Of counsel on the brief were KENT E. BALDAUF,
JR., DAVID C. HANSON and DANIEL H. BREAN, The Webb
Law Firm, of Pittsburgh, Pennsylvania; and CLAUDIA W.
2                           SOVERAIN SOFTWARE   v. NEWEGG

FROST and KEVIN M. FONG, Pillsbury Winthrop Shaw
Pittman, LLP, of Houston, Texas.
                 ______________________

Before NEWMAN, PROST, AND REYNA, Circuit Judges.
NEWMAN, Circuit Judge.
       Soverain Software LLC brought this patent in-
fringement suit against Newegg Inc. for infringement of
specified claims of United States Patent No. 5,715,314
(“the ’314 patent”), its continuation Patent No. 5,909,492
(“the ’492 patent”), and Patent No. 7,272,639 (“the ’639
patent”). The patents relate to electronic commerce,
wherein a merchant’s products are offered and purchased
online, through computers interconnected by a network.
The patents arise from a software system called “Trans-
act” that was developed in 1996 by a company named
Open Market, Inc. The Abstract of the ’314 and ’492
patents describes the subject matter as follows
    A network-based sales system includes at least
    one buyer computer for operation by a user desir-
    ing to buy a product, at least one merchant com-
    puter, and at least one payment computer. The
    buyer computer, the merchant computer, and the
    payment computer are interconnected by a com-
    puter network.     The buyer computer is pro-
    grammed to receive a user request for purchasing
    a product, and to cause a payment message to be
    sent to the payment computer that comprises a
    product identifier identifying the product. The
    payment computer is programmed to receive the
    payment message, to cause an access message to
    be created that comprises the product identifier
    and an access message authenticator based on a
    cryptographic key, and to cause the access mes-
 SOVERAIN SOFTWARE   v. NEWEGG                            3

    sage to be sent to the merchant computer. The
    merchant computer is programmed to receive the
    access message, to verify the access message au-
    thenticator to ensure that the access message au-
    thenticator was created using the cryptographic
    key, and to cause the product to be sent to the us-
    er desiring to buy the product.
Figure 1 in the ’314 and ’492 patents is:

       In 2001 Open Market was sold, with the Transact
software and patents, to a company named Divine, Inc.
Former Divine employee and current Soverain President
Katharine Wolanyk testified that the Transact software
was “a very complex product” that required constant
support services and engineering development, that
Divine was unable to provide the necessary support and
development, and that Divine declared bankruptcy after
fifteen months. Soverain acquired the Transact software
and patents. Soverain then sued seven online retailers,
including Newegg, for patent infringement. The record
states that all of the defendants except Newegg took paid-
4                             SOVERAIN SOFTWARE   v. NEWEGG

up licenses to the patents. Trial Tr. 47 ll.7-25, ECF No.
392.
       Newegg declined to pay for a license, stating that
its system is materially different from that described and
claimed in the patents, and that the patents are invalid if
given the scope asserted by Soverain. Newegg pointed out
that similar electronic commerce systems were known
before the patented system, that the Transact software
was generally abandoned, and that Newegg’s system,
which is based on the different principle of using “cookies”
on the buyer’s computer to collect shopping data, is out-
side of the claims.
       Suit against Newegg proceeded in the United
States District Court for the Eastern District of Texas. 1
The jury found Newegg liable for infringement of the ’314
and ’492 patents, and awarded Soverain damages of $2.5
million. The jury found that Newegg did not infringe the
’639 patent, but the district court granted Soverain’s
motion for JMOL of infringement of the ’639 patent, and
ordered a new trial to assess damages for the ’639 patent,
to be tried after the completion of appeals. The district
court awarded Soverain post-verdict damages and an
ongoing royalty.
       After the close of evidence the district court re-
moved the question of obviousness from the jury, the
court stating: “I don’t think there’s sufficient testimony to
present an obviousness case to the jury. I think it would
be very confusing to them.” Trial Tr. 3 ll.9-12, ECF No.
395. The district court then held that the claims are not
invalid on the ground of obviousness. Op. at 478-79.
Newegg’s motions for JMOL or a new trial were denied.

      1Soverain Software LLC v. Newegg, Inc., 836 F.
Supp. 2d 462 (E.D. Tex. 2011) (herein “Op.”).
 SOVERAIN SOFTWARE   v. NEWEGG                           5

                       OBVIOUSNESS
       Obviousness is a question of law based on underly-
ing facts, as set forth in Graham v. John Deere Co., 383
U.S. 1 (1966). The Graham factors are (1) the scope and
content of the prior art, (2) the difference between the
prior art and the claimed invention, (3) the level of ordi-
nary skill in the field of the invention, and (4) any rele-
vant objective considerations.         The Graham Court
explained that “the ultimate question of patent validity is
one of law.” Id. at 17. Thus on appellate review, the
question of obviousness is decided de novo. See Vulcan
Eng’g Co. v. Fata Aluminium, Inc., 278 F.3d 1366, 1372
(Fed. Cir. 2002) (district court’s application of the law of
obviousness to the found facts is reviewed for correctness);
C.R. Bard, Inc. v. M3 Sys., Inc., 157 F.3d 1340, 1351-52
(Fed. Cir. 1998) (“The ultimate determination of obvious-
ness vel non is a legal conclusion.”).
       Newegg argues that it was wrongfully deprived of a
jury determination of the question of obviousness, point-
ing to the extensive testimony on this issue at trial.
However, Federal Rule of Civil Procedure 50 “allows the
trial court to remove cases or issues from the jury’s con-
sideration ‘when the facts are sufficiently clear that the
law requires a particular result,’” Weisgram v. Marley Co.,
528 U.S. 440, 448 (2000) (quoting Wright & Miller, Feder-
al Practice and Procedure (2d ed. 1995)). The Court has
explained that the purpose of Rule 50 is “to speed litiga-
tion and avoid unnecessary retrials.” Neeley v. Martin K.
Eby Const. Co., 386 U.S. 317, 326 (1967).
       Although here both sides had presented witnesses
and evidence on the question of obviousness, the district
court’s removal of the legal question from the jury did not
violate the right to jury trial. See Markman v. Westview
Instruments, Inc., 517 U.S. 370, 389 (1996) (“[A]ny credi-
6                              SOVERAIN SOFTWARE    v. NEWEGG

bility determinations will be subsumed within the neces-
sarily sophisticated analysis of the whole document.”). In
KSR International Co., v. Teleflex, Inc., 550 U.S. 398, 427
(2007), the Court applied similar principles in its deter-
mination of the question of obviousness, stating that:
“Where, as here, the content of the prior art, the scope of
the patent claim, and the level of ordinary skill in the art
are not in material dispute, and the obviousness of the
claim is apparent in light of these factors, summary
judgment is appropriate” and remand unnecessary.
       However, questions of law must be correctly decid-
ed, and the district court’s determination of the question
of obviousness as a matter of law receives de novo deter-
mination on appeal.          See Western Union Co. v.
MoneyGram Payment Sys., Inc., 626 F.3d 1361, 1369 (Fed.
Cir. 2010) (reversing judgment of nonobviousness when
“[t]he parties’ disputes revolve around whether the prior
art taught three specific elements of the claimed inven-
tions, whether there was a motivation to combine these
elements with the prior art system, and whether second-
ary considerations support a finding of nonobviousness.”);
Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1327
(Fed. Cir. 2008) (reversing judgment of nonobviousness
when defendant “clearly and convincingly established a
prima facie case that [the] claims [were] obvious as a
matter of law.”); Inventio AG v. Otis Elevator Co., No.
2011-1615, 2012 WL 5907489, at *5 (Fed. Cir. Nov. 27,
2012) (non-precedential) (reversing judgment of nonobvi-
ousness when patent was “a clear example of a ‘combina-
tion of familiar elements according to known methods
[yielding] no more than . . . predictable results.’” (citations
omitted)).
      On these premises, we determine the question of
obviousness. Newegg relied primarily on a prior electron-
ic commerce system called “CompuServe Mall.” The
 SOVERAIN SOFTWARE   v. NEWEGG                             7

district court, sustaining validity of all claims in suit, did
not discuss the claims or the prior art; the court stated
that Newegg’s expert had not presented a prima facie case
of obviousness, and criticized Newegg for not presenting
“some articulated reasoning with some rational under-
pinning to support the legal conclusion of obviousness.”
Op. at 479.
      The parties divided the claims in suit into three
groups, and presented evidence and argument, including
expert and other witness testimony, for the claims as
grouped. We retain the parties’ groupings, as follows:
                              A
  The ’314 and ’492 patents – the “shopping cart” claims
       Soverain asserted claims 34 and 51 of the ’314 pa-
tent and claim 17 of the ’492 patent as a group called the
“shopping cart” claims. These claims are directed to the
overall system wherein products are offered online by a
merchant, a buyer designates products for purchase, and
payment for the designated products is initiated upon the
buyer’s request for checkout, all operating through a
computer network. The parties agreed that claim 34 of
the ’314 patent is representative of this group. Claim 34
follows (with bracketed numbers added):
    34. A network-based sales system, comprising:
        [1] at least one buyer computer for operation
    by a user desiring to buy products;
        [2] at least one shopping cart computer; and
       [3] a shopping cart database connected to said
    shopping cart computer;
        [4] said buyer computer and said shopping
    cart computer being interconnected by a computer
    network;
8                            SOVERAIN SOFTWARE   v. NEWEGG

        [5] 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 plu-
    rality of respective shopping cart messages to said
    shopping cart computer each of which comprises a
    product identifier identifying one of said plurality
    of products;
        [6] said shopping cart computer being pro-
    grammed to receive said plurality of shopping cart
    messages, to modify said shopping cart in said
    shopping cart database to reflect said plurality of
    requests to add said plurality of products to said
    shopping cart, and to cause a payment message
    associated with said shopping cart to be created;
    and
        [7] said buyer computer being programmed to
    receive a request from said user to purchase said
    plurality of products added to said shopping cart
    and to cause said payment message to be activat-
    ed to initiate a payment transaction for said plu-
    rality of products added to said shopping cart;
        [8] said shopping cart database being a data-
    base of stored representations of collections of
    products, and said shopping cart computer being a
    computer that modifies said stored representa-
    tions of collections of products in said database.
      At the trial the CompuServe Mall system was the
primary reference against the shopping cart claims,
including two books describing the system: Bowen &
Peyton, How to Get the Most Out of CompuServe (4th ed.
1989) and Ellsworth & Ellsworth, Using CompuServe
(1994). Newegg presented testimony of CompuServe’s
 SOVERAIN SOFTWARE   v. NEWEGG                           9

former Chief Technology Officer Alexander Trevor,
Newegg’s expert witness Mr. Edward Tittel, and Newegg’s
Chief Technology Officer James Wu, who designed the
Newegg system.
       Mr. Tittel compared claim 34 with the prior art sys-
tem, element by element. Trial Tr. 55-81, ECF No.394.
Mr. Tittel testified that the CompuServe Mall was a
“network-based sales system” (claim preamble) in which
the buyer computer (clause [1]) interacted with a Com-
puServe server computer (clause [2]) that stored buyers’
product selections in “shopping carts” called personal
holding files (clause [3]), all via a computer network
(clause [4]). Id. 57-60. Mr. Tittel explained that products
were added to the personal holding files when the buyer
computer sent an order command “O” to the CompuServe
server, at which time the server would “update” the
personal holding file for each such selection (clauses [5],
[6] and [8]). Id. 61-63. When the buyer was ready for
checkout, the buyer typed “checkout” and was presented
with a screen to review the designated items, and with a
request to initiate payment (clause [7]). Id. 64-65. Mr.
Tittel concluded that all of the elements and limitations of
Soverain’s shopping cart claims were “shown or apparent”
in the prior art CompuServe Mall. Id. 67 l.25.
       Mr. Trevor testified as to the CompuServe Mall
system, for which he had been the Chief Technology
Officer. According to Mr. Trevor, the CompuServe Mall
provided the buyer with access to over a hundred online
stores. Trial Tr. 32 ll.21-23, ECF No. 396. Within each
store, products were presented in menus. When a buyer
found a product of interest, the buyer selected the product
from the store menu and a detailed description would be
displayed, in some cases with a photograph. Id. 33 ll.9-13.
If the buyer wanted to purchase the product, the buyer
would type the order command “O” and CompuServe
10                            SOVERAIN SOFTWARE   v. NEWEGG

would store the product in the buyer’s personal holding
file on the server. Id. 33 ll.14-17. The buyer could desig-
nate up to forty items for placement in the personal
holding file. Id. 34 ll.8-11. By typing “checkout,” the
buyer could review selections and modify or delete items
in the personal holding file, or proceed to purchase. Id. 43
ll.8-17.
        Soverain’s expert witness Dr. Michael Shamos
stated that the Newegg witnesses’ description of the
CompuServe Mall was “consistent with my understand-
ing,” but presented the argument that the CompuServe
Mall lacked two elements of the shopping cart claims:
first, that the CompuServe system lacked the “shopping
cart message [that] comprises a product identifier” of
claim clause [5]; and second, that CompuServe lacked the
“shopping cart database” of clause [3]. Trial Tr. 154-69,
ECF No. 397. Dr. Shamos did not dispute that the other
elements of claim 34 were embodied in the CompuServe
Mall. We have given particular attention to the two
aspects on which the witnesses stated divergent views.
       1. the product identifier message, clause [5]
       Dr. Shamos did not disagree with Mr. Tittel that
the CompuServe Mall’s “order command” was a “shopping
cart message” as in clause [5], and agreed that when a
CompuServe Mall buyer entered the order command, the
CompuServe server computer would identify the product
and place it in a personal holding file for that buyer. Trial
Tr. 155 ll.24-25, ECF No. 397; id. 165 ll.5-9. However, Dr.
Shamos argued that the CompuServe Mall was different
because the “product identifier” in the CompuServe Mall
was not “in the message.” Id. 154 ll.9-17. Dr. Shamos
stated that the CompuServe Mall system of product
identification was based not on the order command itself,
but on what the server “knew” based on “previously sent”
 SOVERAIN SOFTWARE   v. NEWEGG                           11

messages. Id. “It was just an indication that the order
key had been—had been hit at that time.” Id. 156 ll.2-3.
Thus Dr. Shamos argued that the CompuServe order
command was not a “message . . . which comprises a
product identifier” as required by claim clause [5]. Id. 155
ll.2-7.
       The distinction proposed by Dr. Shamos and ad-
vanced by Soverain is not embodied in the claims and not
reflected in the claim construction. It was not disputed
that the CompuServe Mall order command designated a
specific product for placement in the buyer’s personal
holding file, or shopping cart, as recited in claim clause
[3]. See Trial Tr. 54, ECF No. 394; Trial Tr. 165 ll.5-9,
ECF No. 397. Nor was it disputed that, regardless of how
the order command was structured, it conveyed the requi-
site information to the CompuServe server computer. Id.
The message set forth in the claims is not distinguished
from the message in the CompuServe Mall. The term
“product identifier” was not given a special meaning in
the specification or through claim construction, and
contains no designated format requirements. “No princi-
ple of law . . . authorize[s] . . . read[ing] into a claim an
element which is not present, for the purpose of making
out a case of novelty . . . .” E.I. DuPont de Nemours & Co.
v. Phillips Petroleum Co., 849 F.2d 1430, 1433 (Fed. Cir.
1988) (quoting McCarty v. Lehigh Valley R. Co., 160 U.S.
110, 116 (1895)).
      Soverain also argues that its system is superior to
the CompuServe “order command” because the system of
the patents in suit is adapted to the Internet, whereas the
CompuServe Mall operated on a pre-Internet network.
Trial Tr. 159-162, ECF No. 397. In Muniauction this
court held that “conducting previously known methods
through an Internet web browser was obvious because it
amounted to no more than applying the use of the Inter-
12                            SOVERAIN SOFTWARE   v. NEWEGG

net to existing electronic processes at a time when doing
so was commonplace.” 532 F.3d at 1327. Precedent
agrees with Newegg that a person of ordinary skill 2 could
have adapted the CompuServe order command to known
browser capabilities when these capabilities became
commonplace, and that it was obvious to do so. The
product identifier message term does not distinguish the
shopping cart claims from the prior art CompuServe Mall.
          2. the shopping cart database, clause [3]
       Dr. Shamos also stated his opinion that the Com-
puServe Mall did not have a “shopping cart database” as
in the claims in suit. Dr. Shamos agreed with Newegg’s
expert Mr. Tittel that the CompuServe Mall system
included “personal holding files,” and Dr. Shamos agreed
that a shopping cart database “might have been a reason-
able design choice,” but he opined that such database
“wasn’t required” by the CompuServe Mall and that the
prior art did not “necessarily disclose a database.” Trial
Tr. 167 ll.12-16, ECF No. 397.
       The agreed claim construction for “shopping cart
database” was “a database of stored representations of
collections of products,” where “database means a collec-
tion of logically related data stored together by one or
more computerized files.” Claim Construction Order 3,

      2The parties agreed that the level of ordinary skill
in the field of this invention is “a Bachelor of Science
degree in computer engineering or computer science, or
equivalent education, with two to three years of practical
experience developing or operating software and systems
that relate to commerce on the Internet.” Plaintiff’s
Submission of Joint Proposed Charge of the Court 29-30,
ECF No. 289-3; Defendant’s Submission of Joint Proposed
Charge of the Court 35, ECF No. 289-4.
 SOVERAIN SOFTWARE   v. NEWEGG                          13

ECF No. 214. The use of personal holding files in the
CompuServe Mall is easily within this definition. Mr.
Tittel testified that the personal holding file in Com-
puServe Mall was “a shopping cart in a shopping cart
database.” Trial Tr. 56 ll.9-10, ECF No. 394. He ex-
plained that “[t]he personal holding file itself is a shop-
ping cart. And because CompuServe supported multiple
individuals shopping in the same store at the same time,
a collection of such files would be maintained, and that
would meet the Court’s requirements for a shopping cart
database.” Id. 56 ll.11-16. In addition, Mr. Trevor testi-
fied that the personal holding files in the CompuServe
Mall system stored products “specific to each customer”
and constituted an “in-memory database.” Trial Tr. 39
ll.7-10, ECF No. 396.
       The Ellsworth & Ellsworth book describes the stor-
age of customer product selections in the CompuServe
personal holding files. Using CompuServe 376, ECF No.
247-10 (“When you find a product that you want to buy,
press O for order. Your order will be stored in a personal
holding file until you leave that merchant’s store.”). The
book further describes that items placed in the personal
holding file are not yet purchased, and are held until the
buyer types the “checkout” command. Id. (“When you are
finished shopping in that store, type checkout. An
electronic order form appears.”).
       When Dr. Shamos was asked how a person of skill
in the art would have implemented the CompuServe
online shopping system other than through a database, he
suggested that CompuServe could have used a “fulfill-
ment house,” which would “fill your order and send it to
you without ever recording it in a database.” Trial Tr.
168 ll.9-14, ECF No. 397. Whether that alternative was
feasible, it is not stated to be what CompuServe did. The
Ellsworth & Ellsworth book states that the buyer’s prod-
14                            SOVERAIN SOFTWARE    v. NEWEGG

uct selections are “stored”—not sent “without ever record-
ing it in a database.” The “fulfillment house” alternative
proposed by Dr. Shamos does not relate to a personal
holding file, and appears to have no relation to either the
prior art or the patents. Dr. Shamos conceded that a
database would have been a “reasonable design choice” for
the personal holding files, and his statements that the
prior art did not “necessarily disclose a database” are not
evidence of nonobviousness. “Because the patentee is
required to define precisely what his invention is . . . it is
unjust to the public, as well as an evasion of the law, to
construe it in a manner different from the plain import of
its terms.” Phillips v. AWH Corp., 415 F.3d 1303, 1312
(Fed. Cir. 2005) (en banc) (citations omitted).
       The district court’s conclusion that a prima facie
case of obviousness was not met is not explained by the
court or by Soverain, and does not accord with the record.
Dr. Shamos did not provide evidence to rebut Newegg’s
prima facie case that every claim element was embodied
in the prior art.
       Although the district court criticized Mr. Tittel’s
expert report on the question of obviousness, the trial
record contains extensive testimony of the experts for
both sides, discussing every claimed element of the pa-
tented subject matter and the prior art system. Their
testimony was subjected to examination and cross-
examination, before decision of the question of obvious-
ness was removed from the jury. Also, precedent does not
require “expert” opinions on matters of law. In Nutrition
21 v. United States, 930 F.2d 867, 871 n.2 (Fed. Cir. 1991)
this court observed that “[a]n expert’s opinion on the
ultimate legal conclusion is neither required nor indeed
‘evidence’ at all.” Avia Group Int’l v. L.A. Gear Cal., Inc.,
853 F.2d 1557, 1573 (Fed. Cir. 1988) (“an expert’s opinion
 SOVERAIN SOFTWARE   v. NEWEGG                            15

on the legal conclusion of obviousness is neither necessary
nor controlling”).
       We conclude that the prior art CompuServe Mall
system, by clear and convincing evidence, rendered obvi-
ous the “shopping cart” claims: claims 34 and 51 of the
’314 patent and claim 17 of the ’482 patent. These claims
are invalid; the district court’s contrary ruling is reversed.
                              B
   The ’492 patent – the “hypertext statement” claims
      The ’492 patent is a division of the ’314 patent,
with the same specification and drawings. Soverain
asserted infringement of claims 41 and 61 of the ’492
patent, called the “hypertext statement” claims. These
claims are directed to the aspect of the online shopping
system set forth in the patents, in which the client com-
puter receives transaction statements from the server
computer, in response to a request from the client com-
puter. The district court included these claims in its
ruling of nonobviousness, although the specific subject
matter and claims were not mentioned by the court. We
thus determine this question of law de novo.
      Claim 41 is shown below, with claim 15 from which
it depends, and bracketed numbers added to each claim
clause:
    15. A hypertext statement system, comprising:
     [1] a client computer for operation by a client
    user; and
        [2] one or more server computers for opera-
    tion by a server user;
        [3] the client computer and the server com-
    puters being interconnected by a public packet
    switched computer network;
16                            SOVERAIN SOFTWARE   v. NEWEGG

         [4] at least one of the server computers being
     programmed to record information pertaining to
     purchase transaction records in a database, and to
     transmit a statement document comprising the
     purchase transaction records to the client comput-
     er over the network;
         [5] the client computer being programmed to
     display the statement document to receive a re-
     quest from the client user to display transaction
     details corresponding to a portion of the statement
     document displayed by the client computer, and to
     cause a transaction detail hypertext link corre-
     sponding to the portion of the statement document
     to be activated;
         [6] at least one of the server computers being
     programmed to respond to activation of the trans-
     action detail hypertext link by transmitting the
     transaction details to the client computer over the
     network as a transaction detail document.
     41. A hypertext statement system in accordance
     with claim 15, wherein
      [7] the statement document is sent by at least
     one of the server computer to the client computer
     in response to a statement URL sent by the client
     computer to at least one of the server computers.
Newegg argued that claim 41 is rendered obvious by the
CompuServe Mall system, for the commonplace sending of
a statement of a transaction or receipt, in response to a
URL inquiry by the purchaser (claim clause [7]), does not
contribute nonobviousness to known systems of e-
commerce over the network, (clause [6]). Mr. Tittel’s
testimony included an element by element comparison of
these claims with the CompuServe Mall statement sys-
 SOVERAIN SOFTWARE   v. NEWEGG                          17

tem. Trial Tr. 71-76, ECF No. 394. Mr. Tittel testified
that in the CompuServe Mall, the client user operated a
client computer (clause [1]), and a server user operated a
server computer (clause [2]), and the computers were
interconnected by a public network (clause [3]). Id. 72.
The CompuServe server recorded and transmitted pur-
chase information, and provided a “confirmation number”
from which buyers could “get all the information about
that transaction that you might ever need,” (clause [4]).
Id. 73 ll.10-22. The client user could request transaction
information using the confirmation number (clause [5]),
and receive access to such information from the Com-
puServe system (clause [6]), though not using URLs or
hypertext (clause [7]). Id. 74 ll.4-5. Mr. Tittel explained
that the CompuServe Mall did not employ hypertext or
URLs because it pre-dated the Internet and did not use
the tools of the World Wide Web, but “[a]nyone who could
get access to the text in a transaction record would under-
stand how to use html to present that information at a
variety of levels of details.” Id. 75 ll.13-18.
       At the trial, both sides presented testimony con-
cerning the statement URL (clause [7]). Dr. Shamos
argued that the statement URL rendered these claims
nonobvious because there was no way of obtaining trans-
action details online in the CompuServe Mall system.
Trial Tr. 173 ll.3-20, ECF No. 397; Soverain Br. 46. Mr.
Tittel testified that hypertext and URLs are basic func-
tionalities of the World Wide Web, and that “[a]nyone who
wanted to move shopping on the web would know they
had to use URLs to tie things together to deliver infor-
mation.” Trial Tr. 71 ll.4-6, ECF No. 394.
       Also in suit was claim 61 of the ’492 patent, shown
with claims 1 and 60 from which claim 61 depends:
18                             SOVERAIN SOFTWARE   v. NEWEGG

     61. A hypertext statement system in accordance
     with claim 60, wherein the information on trans-
     actions by the user includes at least one of the fol-
     lowing types of information: a date of transaction,
     an identification of the product, a payment
     amount, and a merchant identifier.
     60. The method of claim 1, wherein at least one
     service request comprises a purchase request, the
     purchase request including an associated user
     identifier, the method further comprising:
            accessing, upon receipt of the purchase re-
     quest at the server system, user information asso-
     ciated with the user identifier sufficient to charge
     to an account associated with the user, the pur-
     chase price of the product identified by the pur-
     chase request;
           charging the user for the product identified
     by the purchase request according to the user in-
     formation; and
            fulfilling the purchase request based on the
     user information.
     1. A method of processing service requests from a
     client to a server system through a network, said
     method comprising the steps of
            forwarding a service request from the client
     to the server system, wherein communications be-
     tween the client and server system are according
     to hypertext transfer protocol;
            returning a session identifier from the ser-
     vicer system to the client, the client storing the
     session identifier for use in subsequent distinct
     requests to the server system; and
 SOVERAIN SOFTWARE   v. NEWEGG                          19

          appending the stored session identifier to
   each of the subsequent distinct requests from the
   client to the server system.
Newegg points out that the elements of a “statement
URL” (claim 41) and general purchase information (claim
61) are “routine modifications that are a part of adapting
[the Internet] to an existing system,” and do not render
the system nonobvious, citing Western Union, 626 F.3d at
1370, where the court held the claimed system of Inter-
net-based money transfer to be obvious, for the prior art
money transfers were simply implemented by a newer
electronic method that had become commonplace. Reply
Br. 4. See also Muniauction, 532 F.3d at 1326 (“modifica-
tion of [bid calculation software] to incorporate web
browser functionality represents a combination of two
well known prior art elements to a person of ordinary skill
in the art.”). Although Soverain argues that the Com-
puServe Mall did not disclose “most, if not all, of the
elements recited in the hypertext statement claims,” such
as a “statement document,” or a “transaction detail docu-
ment,” Soverain Br. 46, the record does not support that
argument, but rather supports Newegg’s argument that
these aspects were performed in the CompuServe Mall
system.
       Mr. Tittel explained that in the CompuServe Mall,
buyers could get all the information about a transaction
from the confirmation number. Tr. 73 ll.10-22, ECF No.
394. Soverain argues that in CompuServe Mall it might
be necessary to resort to the telephone or email to get the
transaction information, but Newegg states that whatever
distinction Soverain is drawing, it is not a limitation on
the claims other than a commonplace Internet capability
to facilitate on-line transactions. See Muniauction, 532
F.3d at 1327 (holding it obvious to “apply[ ] the use of the
20                            SOVERAIN SOFTWARE   v. NEWEGG

Internet to existing electronic processes at a time when
doing so was commonplace.”).
       Open Market did not invent the Internet, or hyper-
text, or the URL. See Trial Tr. 196-97, ECF No. 397
(testimony of Soverain’s expert Dr. Shamos). Newegg is
correct that the use of hypertext to communicate a
“statement document” or “transaction detail document”
was a routine incorporation of Internet technology into
existing processes. See Western Union, 626 F.3d at 1370-
71; Muniauction, 532 F.3d at 1327.
       We conclude that Newegg presented clear and con-
vincing evidence of obviousness of claims 41 and 61 of the
’492 patent. The district court’s ruling of nonobviousness
is reversed.
                             C
      The ’639 patent – the “session identifier” claims
      The ’639 patent is directed to “methods of pro-
cessing service requests from a client to a server system
through a network.” ’639 patent, col.3 ll.6-7. The subject
matter is summarized in the ’639 Abstract as follows:
     This invention relates to methods for controlling
     and monitoring access to network servers. In par-
     ticular, the process described in the invention in-
     cludes client-server sessions over the Internet. In
     this environment, when the user attempts to ac-
     cess an access-controlled file, the server subjects
     the request to a secondary server which deter-
     mines whether the client has an authorization or
     valid account. Upon such verification, the user is
     provided with a session identification which al-
     lows the user to access to the requested file as
     well as any other files within the present protec-
     tion domain.
 SOVERAIN SOFTWARE   v. NEWEGG                             21

Claims 60 and 79 of the ’639 patent were in suit, called
the “session identifier” claims. The jury found that these
claims are not infringed by the Newegg system. On
Soverain’s motion for JMOL as to claim 79, the district
court reversed the verdict and ruled the claim infringed.
Claim 60 was not included in Soverain’s motion, and is
not included on this appeal. Claim 79 follows, shown with
claim 78 from which it depends:
   79. The method of claim 78, further comprising,
   in the server system:
           receiving an initial service request from
   the client;
           creating, responsive to the initial service
   request, the session identifier; and
            returning the session identifier to the cli-
   ent for storage by the client for use in subsequent
   requests to the server system.
   78. A method of processing, in a server system,
   service requests from a client to the server system
   through a network, said method comprising the
   steps of:
           receiving, from the client, a service re-
   quest to which a session identifier stored at the
   client has been appended by the client, wherein
   communications between the client and server
   system are according to hypertext transfer proto-
   col;
           validating the session identifier appended
   to the service request; and servicing the service
   request if the appended session identifier is valid.
     The parties stipulated that “session identifier”
means “a text string that identifies a session,” wherein a
22                             SOVERAIN SOFTWARE   v. NEWEGG

“session” is a “series of requests and responses to perform
a complete task or set of tasks between a client and a
server system.” Claim Construction Order 3, ECF No.
214. Newegg again argues that the district court erred in
its ruling of nonobviousness. The court did not discuss
the prior art or explain its reasoning, other than to in-
clude this patent in the general statement that Newegg
had not presented a prima facie case of nonobviousness,
and to criticize the expert witness for omitting to provide
his conclusions as to validity.
       Newegg relies on U.S. Patent No. 5,560,008 to
Johnson and U.S. Patent No. 5,724,424 to Gifford, stating
that either Johnson alone, or Johnson in view of Gifford,
renders obvious the claimed subject matter. Soverain
responds that neither Johnson nor Gifford discloses a
“session identifier.” Soverain states that the “credential
identifier” of Johnson cannot be a “session identifier”
because it identifies a “user rather than a session,” and
therefore “can cover a portion of a single session or . . .
multiple sessions.” Soverain Br. 47. Newegg states, and
Mr. Tittel explained at trial, that “the same mechanisms
that are used to set up a network login [as in Johnson]
apply to establishing a session [as in the ’639 patent].”
Newegg Br. 42-43; Trial Tr. 78 ll.17-18, ECF No. 394.
       The “credential identifier” is described by Johnson
as follows:
            A message, called a request for service, is
     sent from the user client machine to the server
     remote machine anytime that service is needed on
     the remote machine. . . . The server builds a set of
     credentials that represent all of the interesting
     security facts about the remote user. This infor-
     mation includes the user id, the group id that the
     user is in, the group set of other group ids that the
 SOVERAIN SOFTWARE   v. NEWEGG                             23

   user has access to, an account id, the set of privi-
   leges of the user that allow the user to bypass the
   normal security restrictions on the system, etc.
   The server establishes all of the credentials for
   the user, and stores this information in a data
   structure called the credentials structure, and re-
   turns a small value (e.g. 64 bits) to the client ma-
   chine where the user is running. This returned
   small value is referred to as the credentials identi-
   fier.
          After the credentials identifier is returned
   to the user, all the user has to do is to present the
   credentials identifier to the server in every re-
   quest requiring authentication that is made of
   that server. . . .
Johnson patent col.5 l.47-col.6 l.2. The credential identi-
fier in Johnson is “a flexible authentication and authori-
zation process,” col.6 ll.51-54, where the server decides
“the length of time that the credential structure will be
maintained,” col.6, ll.51-54.
       Mr. Tittel testified that the patents to Johnson and
Gifford show all of the elements of claims 78 and 79.
Trial Tr. 76-81, ECF No. 394. He testified that the “ser-
vice requests” of the ’639 claims appear in Johnson’s
“requests for service.” Id. 79 ll.5-6. The ’639 claims refer
to “appending” the session identifier to a service request,
and Johnson refers to “presenting” the credential identifi-
er in “every request.” Id. 81 ll.3-4.
       Dr. Shamos testified that the ’639 claims are dis-
tinguishable because the Johnson reference pre-dated the
World Wide Web. However, Mr. Tittel pointed out that
that the Gifford reference includes application of the Web
to the same effect. Id. 80 ll.8-11. Gifford describes a
“complete system for the purchasing of goods or infor-
24                            SOVERAIN SOFTWARE   v. NEWEGG

mation over a computer network,” that is “based upon the
hypertext conventions of the World Wide Web.” Gifford
patent, Abstract; col.4 ll.61-63. Gifford specifically teach-
es the use of hypertext strings in e-commerce transactions
for payment authorization and security, a “transaction
identifier” that is a hypertext string used to authenticate
a transaction. Id. col.11 ll.32-35. Soverain does not
dispute that Gifford teaches “additional Internet func-
tionality” not taught in Johnson. Soverain Br. 47.
      On the agreed claim construction and the teachings
of Johnson and Gifford, we discern no distinction between
the session identifier claims and Johnson alone, or John-
son with Gifford. In KSR the Court explained:
     When we apply the standards we have explained
     to the instant facts, claim 4 must be found obvi-
     ous. . . . we see little difference between the
     teachings of Asano and Smith and the adjustable
     electronic pedal disclosed in claim 4 of the Engel-
     gau patent. A person having ordinary skill in the
     art could have combined Asano with a pedal posi-
     tion sensor in a fashion encompassed by claim 4,
     and would have seen the benefits of doing so.
550 U.S. at 422. We conclude that claim 79 of ’639 patent
is invalid on the ground of obviousness.
                             D
                 Secondary Considerations
      Before reaching our conclusions regarding obvious-
ness referred to above, we have also considered the mat-
ter of secondary considerations. Soverain argues that
obviousness of all of the claims in suit is negated by the
favorable market response that was achieved by Open
Market’s Transact product, which Soverain states re-
ceived “widespread recognition in the general media,” “an
 SOVERAIN SOFTWARE   v. NEWEGG                          25

excellence award from the industry,” and was “widely
licensed.” Soverain Br. 50-51. Newegg responds with
evidence that the Transact system was abandoned by its
developers and almost all of its original users. Newegg
points out that licenses were taken to avoid the costs of
litigation, and not to use the flawed Transact system
embodied in its software. Newegg Br. 5-6.
        The record does not establish a nexus between use
of the Transact software and the patents. At trial, former
Open Market employee and inventor Alexander Treese
testified that Open Market had attempted to license its
patents apart from the software, but without success.
Trial Tr. 108 l.25-109 l.3, ECF No. 391 (testimony of
Alexander Treese stating that patent licensing program
went “Not very well.”). The record shows that the soft-
ware was abandoned by almost all of its initial licensees,
Trial Tr. 23 ll.12-25, ECF No. 392 (testimony of Soverain’s
President Katherine Wolanyk), and is not used by those
who bought litigation peace, compare id. 38 ll.12-15
(listing current licensees of Transact) with id. 47 ll.17-18
(listing companies that settled after being “contacted first
with a lawsuit”). The assertions of commercial success as
here presented do not support nonobviousness.
                         SUMMARY
       The claims in suit of the ’314 and ’492 patents are
invalid for obviousness over the CompuServe Mall sys-
tem. The claims of the ’639 patent are invalid for obvi-
ousness over Johnson in view of additional prior art, and
the other evidence presented. The judgments of validity
are reversed, and therefore the judgments of infringement
and damages are vacated.

     REVERSED IN PART, VACATED IN PART