Shopify plans to contest $40 million Express Mobile patent infringement verdict

Express Mobile has also sued Google, Meta, and Amazon for infringing its patents.

A United States (US) federal jury has awarded California-based Express Mobile a lump sum of $40 million USD in damages after finding that Shopify’s website-building tools infringe some of the American company’s patents.

In a verdict filed earlier this week, a Delaware, US jury has decided that the Ottawa-based e-commerce giant’s tech infringes upon three patents held by Express Mobile related to software for providing content to mobile devices.

Shopify “intends to pursue the matter in the district court or, if necessary, on appeal.”

“While we are disappointed and surprised by the jury’s verdict, we are confident that Shopify does not infringe the asserted patents,” Shopify spokesperson Jackie Warren told BetaKit.

Warren noted that Shopify “intends to pursue the matter in the district court or, if necessary, on appeal.”

“Shopify remains dedicated to making commerce better for everyone, and it will continue to defend itself against patent infringement claims that seek to unfairly capitalize on Shopify’s platform and the success of our merchants,” said Warren.

Express Mobile attorney Jay Nuttall, partner at Washington-based law firm Steptoe & Johnson, told BetaKit that Express Mobile is “very pleased with the jury’s verdict in favor of our client finding that their patented technology was an important and valuable improvement that was being used by Shopify.”

Express Mobile has also sued dozens of other tech companies for infringing its patents, including Google, Meta, and Amazon, in cases that remain ongoing. The firm holds patents associated with internet and mobile tech developed by Express Mobile founder Steven Rempell, a former IBM engineer.

RELATED: Shopify, Ledger dodge class action as California court dismisses 2020 data breach lawsuit

Shopify was first contacted by Express Mobile’s lawyer in 2018 concerning the matter. Express Mobile sued Shopify in 2019, after Shopify asked the Delaware court for a declaration that it did not infringe upon Express Mobile’s patents.

Express Mobile argued that Shopify’s website-building tools infringed upon five of its patents. Ultimately, the Delaware jury ruled that Shopify infringed upon three of Express Mobile’s patents.

As Shopify has grown, the company has increasingly become the target of lawsuits, with a list of claims against Shopify that range from electronic payments patent infringement to textbook copyright and trademark infringement, in addition to responsibility for data breaches that impacted its platform.

The company has also seen its growth slow in recent months, as pandemic forces driving e-commerce demand have waned and people return to brick-and-mortar shopping.

RELATED: Shopify’s growth continues to slow amid changing e-commerce market conditions

These conditions and the recent market downturn has led Shopify to cut back. BetaKit reported in late June that Shopify employees were told hiring would slow. In late July, Shopify announced that it was laying off 10 percent of its staff, in cuts that impacted approximately 1,000 employees.

The Globe and Mail reported yesterday that Shopify had added to its recent layoffs by cutting another 70 employees—less than one percent of the company’s workforce—while boosting pay for remaining employees as part of measures separate from the changes to its employee compensation strategy.

However, Warren told BetaKit that “the number reported by The Globe and Mail on September 1 is grossly overestimated,” but did not disclose the exact amount of employees impacted by the layoffs, noting that “details around individual employee departures are confidential.”

Warren also said that any pay changes for Shopify employees came as part of a new compensation structure Shopify began rolling out in August. This new system enables Shopify employees to choose their split between salary and stock options. Shopify has been working to overhaul its approach to employee compensation since earlier this year. BetaKit was first to report that the initial rollout of this new employee compensation structure was delayed until the fall.

“The rollout of Shopify’s new market-competitive compensation system started in early August,” Warren added. “While many employees saw pay adjustments as part of this transition, reports that pay increases and bonuses were provided separate from this transition are false, with the exception of increases related to a promotion or significant role change.”

Feature image courtesy Shopify.

Josh Scott

Josh Scott

Josh Scott is a BetaKit reporter focused on telling in-depth Canadian tech stories and breaking news. His coverage is more complete than his moustache. He was also the winner of SABEW Canada’s 2023 Jeff Sanford Best Young Journalist award.

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