Ecommerce technology company Shopify has come out ahead in a federal court case brought by DKR Consulting, which asserted Shopify had infringed on patents related to ecommerce Buy buttons and social media.

DKR filed the case, DKR Consulting LLC v. Shopify Inc., last August in the U.S. District Court for the Central District of California.

Lawsuit: Shopify contends tech features are free of patents

Shopify contended that its use of the technology features at issue involved general methods of ecommerce that were not patentable and requested a dismissal of the case in March. Judge Hernán D. Vera agreed and dismissed the case on Aug. 1.

“We’re pleased with this judgment invalidating DKR Consulting’s patents,” Anne Lloyd, Shopify’s vice president of litigation, said in an email reply to Digital Commerce 360. “We will continue to aggressively defend ourselves against patent trolls seeking nuisance settlements.” Shopify is a Canadian company based in Ottawa, Ontario.

Gregory H. Lantier, an attorney representing Shopify at the law firm Wilmer Cutler Pickering Hale and Dorr LLP, argued in court documents that the patents at issue referred to common online business practices and were not subject to patent law.

“The four patents asserted in this case (collectively, the “Buy Button Patents”) claim no more than the abstract idea of using conventional computer technology, such as servers and web widgets to combine advertisements with order forms,” Lantier said. “As the Federal Circuit has repeatedly recognized, this kind of computerization of a known business practice is not patentable.”

Attorneys for DKR Consulting also did not immediately return a request for comment.

The roots of DKR’s lawsuit grew out of its concerns that Shopify had worked from 2011 to 2015 with DIY Media Inc., which previously owned the asserted patents before DKR acquired them. (DIY Media is a nonparty in the DKR lawsuit.)

DKR asserts Shopify unfairly exploited social media trends

DKR claimed that Shopify benefitted from DIY Media’s methods for deploying ecommerce widgets in ways designed, in part, to “exploit social media marketing trends to engage in purchase transactions … over the rapidly growing number of mobile networks and associated mobile devices.”

But Judge Vera agreed with Shopify’s contention that such methods were outside of what can be considered patentable.

“The Court concludes that the claims at issue here are directed to an abstract idea — specifically, that of combining an order form with a product advertisement, through the use of conventional computer technology,” Judge Vera wrote in his Order Granting Defendant’s Motion to Dismiss. “While the Asserted Patents aver that they improve the effectiveness of web widgets to distribute content widely and enable merchants to utilize social media to engage customers, the idea of enhancing web widgets does not constitute an advance in computer functionality. To the contrary, the claims at issue here use conventional computer technology as a tool to facilitate ecommerce.”

Shopify’s extensive reach in ecommerce

In May, Shopify filed a lawsuit against Shopline Commerce Pte. Ltd and Shopline US Inc., alleging they developed a copycat version of Dawn, a Shopify application used to develop customizable ecommerce storefront templates. That case is still pending in the U.S. District Court for the Southern District of New York.

Shopify’s ecommerce technology, including its Shopify Plus platform, is widely used by both retail and B2B companies, such as industrial paint equipment distributor Pittsburgh Spray Equipment Co.

In North America, 117 of the Top 1000 online retailers use Shopify as their ecommerce platform. The Top 1000 is Digital Commerce 360’s database of the largest online retailers in the region by annual web sales. In 2023, those 117 online retailers combined for more than $9.72 billion in web sales.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. [email protected].

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