Patent Infringement Claims Against Futures Exchange Trading Systems Get Another Shot

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By Tony Dutra  


A prior claim construction ruling does not govern a written description analysis for claims issued in a subsequent continuation patent, the U.S. Court of Appeals for the Federal Circuit ruled Aug. 30 (Trading Techs. Int'l, Inc. v. Open E. Cry, LLC, Fed. Cir., No. 2012-1583, 8/30/13).

The court reversed a district court's judgments that depended almost exclusively on the Federal Circuit's 2010 opinion related to patents arising from the same patent specification. The appeals court further held that a prosecution disclaimer ruling in the first case no longer applied to claims in a continuation-in-part. In that specification, the patentee added language contradicting what the earlier case said was disclaimed.

Continuations Sought After Initial Case Falters

Trading Technologies International Inc. owns a number of patents, originating in an application filed in 2000, directed to displaying the bid and ask prices for a commodity traded on an electronic exchange. The prior art displays showed the best bid and best ask price for any given commodity, also known as the inside market. The invention solved a problem--“an accidental order at an unintended price”--when prices shifted on the screen while an order was being placed.

Trading Technologies sued eSpeed Inc., now owned by Nasdaq OMX Group Inc., for patent infringement by its Dual Dynamic, eSpeedometer and Futures View systems after two patents (U.S. Patent Nos. 6,766,304 and 6,772,132) were issued in 2004. Claim construction rulings in 2006 and 2007 in the U.S. District Court for the Northern District of Illinois limited the scope Trading Technologies had hoped for, however, particularly related to the word “static” in the patent claims. In brief, the court concluded that Trading Technologies' claimed system required a manual command to re-center a “static” price column.

Trading Technologies then went back to the Patent and Trademark Office for additional patent protection:

• Three continuation patents (7,676,411; 7,693,768; and 7,904,374) were granted featuring claims that removed the word “static” from references to the pricing column.

• One additional patent (7,685,055) is a continuation-in-part. Trading Technologies added 23 printed columns of text to the written description, including a redefinition of static--“static does not mean immovable, but rather means fixed in relation.”

Trading Technologies' intent in each case was to add claims that would cover automatic re-centering of the pricing column.

Meanwhile, the case against eSpeed proceeded, reaching the Federal Circuit in 2010. Relevant to the instant case, the court affirmed the claim construction and agreed that prosecution history estoppel barred a particular doctrine of equivalents argument proposed by Trading Technologies. Trading Techs. Int'l, Inc. v. eSpeed, Inc., 595 F.3d 1340, 93 U.S.P.Q.2d 1805 (Fed. Cir. 2010) (40 PTD, 3/3/10)

New Litigation on New Patents

After the four later patents issued, Trading Technologies filed 12 separate lawsuits against eSpeed and other parties responsible for different online trading system products, including Open E Cry LLC, whose parent company is Gain Capital Holdings Inc., Stellar Trading Systems Ltd., and TradeStation Securities Inc., a subsidiary of Japan's Monex Group.

Judge Virginia M. Kendall consolidated the cases and the defendants now challenged the new patents on the grounds of lack of written description support under 35 U.S.C. §112(a).

Relying on the Federal Circuit's eSpeed decision, Kendall granted summary judgment in favor of the defendants. Trading Technologies appealed.

Undue Reliance for Written Description Analysis

Judge Alan D. Lourie, writing for the court, faulted the district court for “undue reliance on eSpeed,” because “the claims of the patents now before us are different, as are the issues at play, and eSpeed's ruling on claim construction does not govern the written description inquiry in this case.”

The court's earlier claim construction decision intended to define a specific term, “guided by the specification,” the court said. “In contrast, the written description analysis considers the bounds of the specification itself.”

As to the continuation patents, the court said, the eSpeed decision was not about whether the specification supported a non-static display. “On the contrary, we merely determined the best construction for a single disputed claim term, a term that is absent from the claims of the '411, '768, and '374 patents now before us.”

The court reversed summary judgment as to those patents, leaving it to the district court to make the written description judgment in the first instance on remand.

The court had “additional problems” with the district court's ruling as to the '055 patent, which “differs fundamentally from those at issue in eSpeed, and its unique written description was never considered in that case.” Now with express definitions of “static” in the specification, the court said, “those new disclosures correspond directly to accompanying claim limitations recited in the '055 patent.”

The court not only reversed, it granted summary judgment to Trading Technologies of no invalidity of that patent with respect to the adequacy of the written description.

Prosecution History Estoppel vs. Disclaimer

The court then turned to the district court's decision that eSpeed's ruling on prosecution history estoppel should be applied to the '055 patent as well.

For clarification, the court first distinguished prosecution history estoppel--applying to an argument for infringement under the doctrine of equivalents--from prosecution disclaimer--applying to scope for claim construction purposes. The court said that eSpeed addressed both and that the parties and district court conflated the two here.

The prosecution history estoppel holding related to the scope of the term “do not move”--referring to price levels in the column--which is not a limitation in the '055 patent, the court noted.

The prosecution disclaimer holding related to the word “static,” which is still a limitation in the '055 patent claims, the court acknowledged, and it further said, “In general, the prosecution history regarding a particular limitation in one patent is presumed to inform the later use of that same limitation in related patents, 'unless otherwise compelled,'” quoting Omega Eng'g Inc. v. Raytek Corp., 334 F.3d 1314, 67 U.S.P.Q.2d 1321 (Fed. Cir. 2003).

There was such a compelling reason in this case, though, the court reasoned, because the '055 patent's redefinition of static and addition of “automatically repositioning” language “directly contradict the prosecution-based surrenders of claim scope discussed in eSpeed.” The court noted further that Trading Technologies made arguments supporting those terms to the same patent examiner who had handled the 2004-issued patents.

The disclosure differences render the prosecution disclaimer rulings in eSpeed inapplicable here, the court concluded. It thus reversed the district court's judgments related to prosecution history estoppel or disclaimer and remanded the case.

Judge S. Jay Plager and Judge Dee V. Benson of the U.S. District Court for the District of Utah, sitting by designation, joined the opinion.

Steven F. Borsand of Chicago-based Trading Technologies represented the firm. Anthony B. Ullman of Salans LLP, New York, argued for all the defendants-appellees. Scott J. Bornstein of Greenberg Traurig, LLP, New York, also represented Open E Cry, and Laura A. Lydigsen of Brinks Hofer Gilson & Lione, Chicago, also represented Stellar Trading Systems.


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