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When A Win Is Not A Win—A Pyrrhic Victory For Soverain Software

May 1, 2010

Casting his name into legend, King Pyrrhus of Epirus reportedly replied to well–wishers on his defeat of the Romans that another such victory would utterly undo him. As true for the sovereign of an ancient Greek kingdom as today’s ruling patent–holding entities, Soverain Software LLC may well be wondering if, despite the ostensibly favorable jury verdict handed down yesterday in its trial against online retailer, Inc, the casualties suffered make the price of victory too dear.

Following two–and–a–half years of litigation between the parties, a jury in Marshall, Texas handed down a verdict refusing to find direct infringement by Newegg of any of the seven claims asserted by Soverain, though finding induced infringement of several claims. As for damages, while Soverain had sought $34 million, the cash register rang in at less than 10% of that amount––the jury awarded $2.5 million. Although that still may seem like a princely sum, it should not be forgotten that, according to the docket sheet, Soverain was represented by no less than 14 lawyers from the firm of Jones Day—which bills partners at up to $950 an hour, according to published reports—and by three local attorneys. Given the over 300 docket entries in the case, and given available information on the cost of bringing a patent suit to trial, one can only assume that Soverain or its lawyers spent more than $2.5 million through the close of trial, a total that will only climb as Soverain faces the inevitable post–trial motions and subsequent appeal from Newegg.

In litigation as in war, it is not always clear who the true victor is after the battle is played out—particularly if victory is measured by an accounting of the spoils.

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