Case 1:19-cv-00859-RTH Document 44 Filed 03/11/21 Page 1 of 25
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`IN THE UNITED STATES COURT OF FEDERAL CLAIMS
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`E-NUMERATE SOLUTIONS, INC. and
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`E-NUMERATE, LLC,
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`C.A. No. 19-859-RTH
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`Plaintiffs,
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`v.
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`THE UNITED STATES OF AMERICA,
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`Defendant.
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`JOINT STATUS REPORT
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`Plaintiffs e-Numerate Solutions, Inc., and e-Numerate, LLC (collectively “e-Numerate”)
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`and Defendant the United States of America (the “Government”) respectfully submit this Joint
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`Status Report (“JSR”) in advance of the Status Conference to be held on March 15, 2021. The
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`parties respectfully request that the Court address several issues at the hearing. e-Numerate and
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`the Government have set forth the issues they wish to address below with each party setting forth
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`its respective positions separately.
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`e-Numerate respectfully requests that the Court address the following issues at the hearing:
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`(1) amendment of the Complaint to assert U.S. Patent 10,423,708 as corrected against the
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`Government and third-party vendors (such as Toppan Merrill) providing validation of XBRL data;
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`(2) amendment of the Complaint to assert the ‘748 patent, claim 1 (and its asserted dependent
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`claims) against the Government and the ‘842 patent, claim 29, against third party vendors
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`providing validation of XBRL data; (3) compelling
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`the Government
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`to
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`identify all
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`systems/programs in the Government that validate XBRL data pursuant to the XBRL standard; (4)
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`amendment of the Complaint to assert infringement of the ‘748, ‘842 and ‘708 patents against the
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`governmental agencies/departments identified in (3); (4) amendment of the Complaint to assert
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`1
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`Case 1:19-cv-00859-RTH Document 44 Filed 03/11/21 Page 2 of 25
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`the ‘355, ‘816 and ‘383 patents against the SEC; (5) compelling the Government to identify all
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`XBRL analysis systems/programs in the Government used to analyze XBRL data; (6) assertion of
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`the ‘355, ‘816 and ‘383 patents against the systems identified in (5); and (7) use of representative
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`third party products to prove infringement against the vendors that supply XBRL filings to the
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`SEC and other agencies.
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`The Government wishes to establish a procedure for e-Numerate to limit the number of
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`claims it is asserting in this matter.
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`The parties jointly wish to discuss setting a schedule for claim construction in this matter.
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`Subject to Court approval, the parties are in agreement on proposed schedule as set forth infra.
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`The parties met and conferred on the above-issues and were unable to reach agreement.
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`The parties discuss their respective positions below after a brief introduction from both parties.
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`(A) INTRODUCTION
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`The parties have set forth below their respective introductions for the issues to be raised at
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`the hearing.
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`Plaintiffs’ Introduction
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`Plaintiffs sued the United States for infringement of seven United States Patents:
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`7,650,355 (“the ‘355 patent); 8,185,816 (“the ‘816 patent”), 9,262,383 (“the ‘383 patent”);
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`9,262,384 (“the ‘384 patent); 9,268,748 (“the ‘748 patent”); 9,600,842 (“the ‘842 patent”);
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`and 10,223,337 (“the ‘337 patent”). Plaintiffs would like to amend the Complaint to assert
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`United States Patent 10,423,708 (“the ‘708 patent”) as corrected against both third party
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`vendors/filers and the United States. All of the patents-in-suit expired on May 18, 2020,
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`2
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`Case 1:19-cv-00859-RTH Document 44 Filed 03/11/21 Page 3 of 25
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`with the exception of the ‘816 patent (which expires on October 27, 2022 due to patent term
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`extension). The ‘708 patent is in force until January 23, 2022.
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`To put the issues below into context, Plaintiffs contend that the above-listed patents
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`cover the workflow that takes place at third party filers/vendors and at the Government when
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`a third party files an eXtensible Business Reporting Language (“XBRL”) compliant
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`document at a Government agency. e-Numerate respectfully directs the Court’s attention
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`to
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`the “Let’s Get Started Video”
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`for Toppan Merrill Bridge available at
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`https://toppanmerrill.com/bridge/. Broadly speaking, e-Numerate contends that it has three
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`patents relevant to each step of the workflow on both the filer/vendor side and on the
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`government agency side. These steps generally follow the following workflow: (1)
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`gathering numerical data and combining it into an XBRL instance document; (2) linking the
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`documents containing the numerical data to enable “change once, change everywhere”; (3)
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`validating the filing on the filer/vendor side via the filer/vendor system (note the above cited
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`Toppan Merrill Bridge video shows a “validator” on the ribbon at the top of the Bridge
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`product at the 43 second mark); (4) validating the filing on the Government side (done via
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`a Government system); and (5) running analytical programs (e.g., anti-fraud, compliance,
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`general analysis) on the Government side. Plaintiffs set forth below charts showing this
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`workflow and identifying the asserted patents and the subject matter to which each relates.
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`As presently pleaded (D.I. 31), e-Numerate submits that the instant litigation looks as
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`follows:
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`Accused Toppan Merrill Bridge/Third
`Party Vendor/Filer Functionality
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`Applicable Patents
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`3
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`Case 1:19-cv-00859-RTH Document 44 Filed 03/11/21 Page 4 of 25
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`Gathering numerical data from numerous
`source documents and
`combining/transforming the numerical data;
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`“Change Once, Change Everywhere”
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`‘816 patent; ‘383 patent; and/or ‘355 patent
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`‘384 patent; ‘748 patent, claims 11 and 19
`and asserted dependent claims; ‘337 patent
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`Validation of data
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`‘748 patent, claim 1
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`United States Securities Exchange
`Commission
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`Applicable Patents
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`Validation of data
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`‘842 patent, claim 29
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`e-Numerate would like to amend the Complaint to style the case as follows:
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`Accused Vendor/Third Party Filer
`Functionality
`Gathering numerical data from numerous source
`documents and combining/transforming the
`numerical data;
`“Change Once, Change Everywhere”
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`Validation of data
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`Applicable Patents
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`‘816 patent; ‘383 patent; and/or ‘355 patent
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`‘384 patent; ‘748 patent, claims 11 and 19 and
`asserted dependent claims; ‘337 patent
`‘748 patent, claim 1; ‘842 patent, claim 29;
`and‘708 patent.
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`All Government Agencies/Departments That
`Perform Validation/Analysis of XBRL Data
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`Applicable Patents
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`Validation of data
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`Combining/Transforming Numerical Data (i.e.,
`analytics of XBRL data)
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`‘748 patent, claim 1; ‘842 patent, claim 29; ‘708
`patent
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`‘816 patent; ‘383 patent; and/or ‘355 patent
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`To effectuate amendment of the Complaint to fully assert Plaintiffs’ patent rights against
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`the Government, Plaintiffs respectfully request that the Court Order the Government to: (1)
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`Case 1:19-cv-00859-RTH Document 44 Filed 03/11/21 Page 5 of 25
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`identify all systems/programs that validate XBRL data and identify the agency(ies) where those
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`systems/programs are located; and (2) identify all systems/programs that analyze XBRL data and
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`identify the agency(ies) where those systems/programs are located. Those issues are addressed in
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`more detail below.
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`Plaintiffs have not as yet sent the Government a proposed draft of the Amended Complaint
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`because of the fundamental disputes between the parties about what the Government should have
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`produced in conjunction with its production under CFC Local Patent Rule 7 as well as the non-
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`public nature of the systems/programs that perform XBRL validation and analysis of XBRL filings
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`at the FDIC/FFIEC, the SEC, the Department of Energy/FERC, and the Department of
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`Treasury/Office of Management and Budget. As set forth below, whether the Government should
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`be compelled to identify validation systems that exist at the federal agencies that submit XBRL
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`data to the Treasury Department pursuant to the DAIMS Act is a point of fundamental
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`disagreement between the parties.
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`Relatedly, Plaintiffs respectfully submit that any resolution of this matter via settlement
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`will involve the grant of a portfolio license under the e-Numerate patent portfolio to the
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`Government that covers all government agencies/entities. In order for e-Numerate to contemplate
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`any potential settlements, it is necessary for the Government to identify the full extent of its
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`conduct potentially subject to e-Numerate’s patents.
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`Defendants’ Further Position
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`After receiving Plaintiffs’ preliminary infringement contentions of December 15, 2020 and
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`follow on correspondence of January 5, 2021 seeking to broaden this action to agencies beyond
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`the previously named Securities and Exchange Commission (“S.E.C.”), Defendant sent a detailed
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`Case 1:19-cv-00859-RTH Document 44 Filed 03/11/21 Page 6 of 25
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`twelve page letter identifying numerous deficiencies with the infringement contentions and
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`requested that e-Numerate amend its complaint to cover all agencies e-Numerate contended
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`infringed its patents. (Ex. D.). In order to determine if Defendant would oppose a motion to amend
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`e-Numerate’s Amended Complaint, Defendant requested a copy of this proposed complaint by
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`February 19 and e-Numerate indicated it was targeting February 26 as the date it would provide
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`its amended complaint. To date, e-Numerate has not provided its proposed amended complaint.
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`Additionally, on February 26, 2021, Plaintiffs served its updated preliminary infringement
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`contentions. The Government is reviewing those contentions to determine if they address the
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`deficiencies the Government identified with respect to Plaintiffs’ original infringement contentions
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`and is currently determining whether it will require Court intervention with respect to those
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`updated contentions.
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`(B) AMENDMENT TO ASSERT THE ‘708 PATENT
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`e-Numerate proposes to add the ‘708 patent via an amended Complaint. The
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`Government has raised the issue of purported delay in raising this proposed amendment. e-
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`Numerate disputes that there has been any delay and whether any delay has prejudiced the
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`Government.
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`Plaintiffs’ Further Position
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`Addition of the ‘708 patent is necessary for e-Numerate to obtain complete relief for
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`the Government’s patent infringement in this litigation. Otherwise, e-Numerate would have to
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`file a separate litigation to recover for the Government’s infringement of the ‘708 patent. Such
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`a suit would be a waste of judicial and party resources. Potential infringement of the ‘708
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`patent creates approximately 20 months of additional exposure to the Government. Total
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`6
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`Case 1:19-cv-00859-RTH Document 44 Filed 03/11/21 Page 7 of 25
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`exposure to the Government to the three validation patents (‘748, ‘842, and ‘708) is
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`approximately 6 years from issuance of the ‘748 to the expiration of the ‘708.
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`It is hornbook law that “[m]ere delay, without some showing of prejudice, bad faith, or
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`futility is insufficient to deny a motion to amend a complaint.” Alaska v. United States, 15 Cl.
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`Ct. 276, 280 (1988) (finding that delay of thirteen months in seeking to amend complaint, by
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`itself, did not constitute undue delay requiring denial of motion for leave to amend); see also
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`Hanover Ins. Co. v. United States, 134 Fed. Cl. 51, 61 (2017) (finding that, absent a showing
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`of prejudice, a delay of approximately seven months after production of documents giving rise
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`to alleged fraud against government did not warrant denying government's motion for leave to
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`file an amended answer asserting a Special Plea in Fraud defense and fraud counterclaims under
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`Contract Dispute Act's anti-fraud provision and FCA).
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`Here, this case is in its infancy with the Court having stayed fact discovery vis-à-vis the
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`parties until after claim construction. In addition, the Court has not construed the claims, and
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`the Government has yet to serve a single invalidity contention. Indeed, the Government asked
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`to, and Plaintiffs agreed to, extend the time by which the Government’s invalidity contentions
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`are due. The Government’s request for up to an additional eight weeks extension on its face is
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`contrary to any argument that the Government would be prejudiced by any de minimis delay
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`brought about by an amended Complaint. There is simply no prejudice (undue or otherwise)
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`in allowing this amendment. Allowing this amendment puts the instant litigation into a proper
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`procedural posture before key events take place.
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`Defendant’s Further Position
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`The Government requests a copy of the proposed amended complaint with the allegations
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`before it can determine whether it consents to such an amendment. Plaintiffs only identified the
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`Case 1:19-cv-00859-RTH Document 44 Filed 03/11/21 Page 8 of 25
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`‘708 Patent on February 24, 2021 and to date have not provided their proposed amended complaint
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`and declined to identify the claims it intends to assert. Accordingly, relevant considerations include
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`whether this new complaint relates back to the original complaint, e-Numerate’s reasons for not
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`previously amending the complaint, and the added complexity of asserting an additional patent in
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`an action where e-Numerate already asserts seven patents and the naming of additional
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`Government agencies.
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`(C) AMENDMENT TO ASSERT THE ‘748 PATENT AGAINST THE
`GOVERNMENT AND THE ‘842 PATENT AGAINST THIRD PARTY
`FILERS/VENDORS
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`e-Numerate proposes to amend the Complaint to assert the ‘748 patent against the
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`Government and the ‘842 patent against third party filers. As with the proposed amendment to
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`add the ‘708 patent, the Government has again raised the issue of purported delay in raising
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`this proposed amendment including that e-Numerate first requested this amendment on March
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`4 and has still not provided a draft of the proposed amended complaint.
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`Plaintiffs’ Further Position
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`The proposed amendment is designed to assert the three validation patents (‘748, ‘842
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`and ‘708) against both the third parties and the Government. XBRL validation is done
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`following a standard. See https://specifications.xbrl.org/validation.html. (“The core XBRL
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`specifications (see XBRL Essentials) define validation constraints which XBRL processors
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`must impose on all XBRL reports. These enforce not only basic syntactical checks, but also
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`ensure that the reports comply with the definitions in the taxonomy)(emphasis added) The
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`required validation checks include validation of: (1) datatypes; (2) units; and (3) calculations.
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`The ‘748 patent claim 1 and the ‘842 patent claim 29 explicitly recite validation rules for
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`Case 1:19-cv-00859-RTH Document 44 Filed 03/11/21 Page 9 of 25
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`datatypes, units, and calculations. The ‘708 patent more generically refers to validation “rules.”
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`e-Numerate’s position is that all systems/programs that validate XBRL documents pursuant to
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`this standard infringe the ‘748, ‘842 and ‘708 patents.
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`e-Numerate submits it has not delayed whatsoever in raising this claim with the
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`Government (and, in any event, delay is not sufficient to deny an amendment absent undue
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`prejudice). The instant litigation is complex and e-Numerate has diligently been investigating
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`the infringement of both the Government and third-party vendors/filers. It was only upon a
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`review of the initial Complaint, the First Amended Complaint and the validation patents in the
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`portfolio that e-Numerate realized that the ‘748 patent applied to the Government’s
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`infringement and the ‘842 patent applied to third party filer/vendor infringement. The
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`Government cannot claim that it has been in any way prejudiced by this type of housekeeping
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`amendment to the Complaint given the procedural posture of the case. Both the ‘748 and the
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`‘842 patents are already in the case and the subject of very similar (if not identical) infringement
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`claims.
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` Defendants’ Further Position
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`e-Numerate first raised this request in its correspondence of March 4, 2021. (Ex. G.)
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`The Government requests a copy of the proposed amended complaint with the allegations
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`before it can determine whether it consents to such an amendment. Relevant considerations
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`include e-Numerate’s reasons for not previously amending the complaint as its changes are
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`based on publicly available information.
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`(D) REQUIRING THE GOVERNMENT TO IDENTIFY ALL VALIDATION
`SYSTEMS AT ALL GOVERNMENT AGENCIES
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`Case 1:19-cv-00859-RTH Document 44 Filed 03/11/21 Page 10 of 25
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`e-Numerate respectfully requests that the Court order the Government to identify all
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`systems/programs that perform XBRL validation and to identify the agencies at which those
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`systems/programs are located. e-Numerate suggested to the Government that this identification
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`be done via verified interrogatory, but e-Numerate is open to whatever procedure the Court
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`suggests. e-Numerate requests identification of all systems/programs that are explicitly
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`designated validation systems. In addition, e-Numerate requests identification of all XBRL
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`analytical programs that contain validation functionality pursuant to the XBRL standard. The
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`Government objects to this request on undue burden grounds and as this request is not
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`proportional to the needs of the case as to Government agencies not identified in Plaintiffs’
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`Amended Complaint and based on the Court’s stay of discovery between the parties.
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`Plaintiffs’ Further Position
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`The Government’s refusal to identify systems/programs in its possession, custody and
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`control that perform validation of XBRL documents pursuant to the XBRL validation standard
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`is an attempt to play “hide the ball” with the extent of the Government’s taking of e-Numerate’s
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`patent rights. That is impermissible.
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`The law on Government takings is quite clear. In Decca Ltd v. United States, 640 F.2d
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`1156 (Ct. Cl. 1980), the Court of Claims described the nature of the Government’s takings vis-
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`a-vis new infringements as follows:
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`The Government takes a license to use or to manufacture a patented
`invention as of the instant the invention is first used or manufactured by the
`Government. The license taken at that instant covers only what the
`Government is using or has manufactured as of that instant. If, after this
`first taking, the Government expands the scope of its use of the invention
`or manufactures additional units of the invention, the Government engages
`thereby in incremental takings. Each incremental taking vests the patentee
`with a new cause of action.
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`Case 1:19-cv-00859-RTH Document 44 Filed 03/11/21 Page 11 of 25
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`Id. at 1166 (emphasis added). Thus each new system/software introduced at each Government
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`agency that is used, for example, to validate XBRL documents constitutes a new act of
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`infringement of the ‘748, ‘842 and ‘708 patents.
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`Furthermore, the Government’s testing of XBRL validation software/systems can infringe
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`the validation patents. In Unitrac, LLC v. United States, 113 Fed. Cl. 156 (Ct. Cl. 2013), the
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`Court of Claims noted that:
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`testing, in and of itself, can constitute infringement. See Paper Converting
`Machine Co. v. Magna–Graphics Corp., 745 F.2d 11, 19–20 (Fed. Cir.
`1984) (“testing the assemblies can be held to be in essence testing the patent
`combination and, hence infringement. That the machine was not operated
`in its optimum mode is inconsequential: imperfect practice of an invention
`does not avoid infringement.”); see also Bissell v. United States, No. 00–
`344C, 2001 WL 36400606, at *3–4 (Fed. Cl. Sept. 28, 2001) (the
`Government’s unauthorized testing constitutes “use” under § 1498);
`Hughes Aircraft Co. v. United States, 29 Fed. Cl. 197, 218 (1993)
`(characterizing Paper Converting as concluding that “neither complete
`assembly nor complete testing was necessary to find infringement”).
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`Id. at 162. In light of this decision, the testing of software/systems that validate XBRL data
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`constitutes infringement of the validation patents.
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`e-Numerate’s position on infringement of the ‘748, ‘842, and ‘708 patents is set forth
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`in Ex. A hereto. This document is an Appendix to the claim chart that e-Numerate submitted
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`to the Government for the ‘842 patent claim 29. It charts publicly available SEC source code
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`and shows where the validation takes place via graphics and arrows pointing to the relevant
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`portions. In addition, the graphics show where the result of the validation is displayed using
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`illustrations in the EDGARFiler Manual. Similarly, the graphics also show where the report
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`set forth in the claim is located again using pictures from the EDGARFiler Manual. e-
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`Numerate submits that all validation systems at the Government operate in the same or
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`Case 1:19-cv-00859-RTH Document 44 Filed 03/11/21 Page 12 of 25
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`substantially similar manner and are equally subject to an infringement charge under the ‘748,
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`‘842 and ‘708 patents.
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`Publicly available information indicates that, in addition to the SEC, the FDIC/FFIEC,
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`the Department of Energy, and the Department of Treasury/Office of Management and Budget
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`(“OMB”) all infringe the asserted validation patents as set forth in the following table.
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`GOVERNMENT
`AGENCY
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`DATE OF
`POTENTIALLY
`INFRINGING
`ACTIVITY
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`2009
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`2005
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`2019
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`SEC
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`FDIC/FFIEC
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`Department of
`Energy/Federal
`Energy Regulatory
`Commission
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`SOURCE OF SUPPORT
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`https://www.sec.gov/page/osdhistoryandrulemaking
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`https://xbrl.us/home/filers/fdic-reporting/
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`https://www.workiva.com/blog/what-ferc-xbrl-
`mandate-and-what-do-i-need-do
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`Treasury
`Department/OMB
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`2015
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`https://xbrl.us/news/us-treasury-omb-announces-
`plan-for-xbrl-in-data-act/.
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`e-Numerate made the Court aware of the potentially broad applicability of the validation
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`patents during the status conference held on November 23, 2020. e-Numerate served its
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`preliminary infringement contentions on December 15, 2020, and specifically identified the
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`FDIC/FFIEC as additional infringing agencies. Ex. B (non-pertinent pages omitted). e-Numerate
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`continued its investigation and made the Government aware of the additional takings at still other
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`agencies via letter dated January 5, 2021. Ex. C. e-Numerate followed-up with the Government
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`on January 29, 2021, via electronic mail about production of documents from all agencies that
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`validate XBRL data. The Government responded later that day with a letter that claimed e-
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`Case 1:19-cv-00859-RTH Document 44 Filed 03/11/21 Page 13 of 25
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`Numerate’s infringement contentions were purportedly deficient (sent six weeks after they were
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`served) and refused to produce any documents relating to any agency other than the SEC. Ex. D
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`(non-pertinent pages omitted). In addition, the Government demanded more time to serve
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`invalidity contentions.
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`During the meet and confer prior to this conference, the Government reiterated that it would
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`only produce documents relating to the SEC even though e-Numerate pointed out the above facts
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`and reminded the Government that the defendant is the United States and the Complaint (D.I. 1)
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`and Amended Complaint (D.I. 31) both asserted infringement by agencies of the United States
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`including but not limited to the SEC. D.I. 1 at par. 5; D.I. 31 at par. 5.
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`The impediment to e-Numerate adding all of the proper parties to this litigation is the
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`Treasury Department’s requirement that all federal agencies report their spending to the Treasury
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`Department in XBRL format. This reporting is done using the Treasury Department’s DATA Act
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`Broker
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`starting
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`as of April 1, 2017 pursuant
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`to
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`the DAIMS Act.
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` See
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`https://fiscal.treasury.gov/data-transparency/DAIMS-current.html (see history of DAIMS releases
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`at bottom of page). The architecture for the DAIMS reporting system is shown in Ex. E. e-
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`Numerate cannot tell whether the Agency side “Financial Systems” and “Awards Systems” have
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`validator functionality analogous to what a third-party public filers have (N.B. - the agencies sit in
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`the exact same position vis-à-vis the Treasury as Toppan Merrill Bridge does vis-à-vis the SEC).
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`The Government refuses to disclose this detail on supposed grounds of undue burden. It is
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`fundamentally unfair for the Government to hide takings of e-Numerate’s patented inventions vis-
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`à-vis the “black box” nature of Government agencies and the systems they run.
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`Case 1:19-cv-00859-RTH Document 44 Filed 03/11/21 Page 14 of 25
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`The law is clear that a blanket assertion of “undue burden” is insufficient to deny discovery.
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`AAB Joint Venture v. U.S., 75 Fed. Cl. 448, 457-458 (Ct. Cl. 2007)(Noting that “[s]ome court have
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`even required the objecting party to produce affidavits or offer other evidence to show the nature
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`of the burden.”); Lakeland Partners, L.L.C. v. U.S., 88 Fed. Cl. 124, 133 – 34 & fn. 6 (Ct. Cl.
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`2009). Equally important, this Court explicitly authorizes discovery into products that have not
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`been explicitly accused of infringement but that are “reasonably similar” to the accused product(s).
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`Cormack v. United States, 117 Fed. Cl. 392, 405 (Ct. Cl. 2014)(noting that the “scope of discovery
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`may include products that are ‘reasonably similar’ to those accused in a party’s preliminary
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`infringement chart.”)
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`A further complicating factor in this litigation is that the Government agencies routinely
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`run analytical programs against as-filed XBRL documents. See Ex. F. By way of example, e-
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`Numerate believes that the SEC runs numerous analysis programs on the XBRL filings it receives
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`to investigate potential fraud, check for compliance, and perform general economic analysis. e-
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`Numerate believes that these systems very likely have validator functionality built into them, but
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`the Government refuses to disclose the identity and structure of these systems. Instead, the
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`Government is unilaterally claiming that the systems do not infringe (in their opinion) and,
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`therefore, asserts it is not obligated to produce any documents regarding them. See Ex. D at pp. 3
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`- 4.
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`In light of the foregoing, e-Numerate respectfully requests that the Government be Ordered
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`to identify all systems in its possession, custody and control that validate XBRL data.
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`Defendant’s Further Position
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`The government objects to e-Numerate’s request to a government-wide interrogatory – which
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`Case 1:19-cv-00859-RTH Document 44 Filed 03/11/21 Page 15 of 25
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`it first notified the Government of on February 24, 2021 – as unduly burdensome and not
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`proportional to the needs of the case in contravention of RCFC 26. Additionally, at this stage of
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`the case, such an interrogatory is premature as the Court has curtailed party discovery until after
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`the Markman hearing. Further, it is evident that purpose of such an interrogatory is to shift the
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`burden of collecting information on behalf of e-Numerate to the Government such that e-Numerate
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`can support additional causes of action and further amend its complaint. In terms of an interrogatory
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`directed to the SEC, the Government reserves its objections until e-Numerate propounds the specific
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`interrogatory in accordance with this Court’s schedule for discovery but expects that it will respond in due
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`course.
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`(E) AMENDMENT OF THE COMPLAINT TO ASSERT INFRINGEMENT OF
`THE SYSTEMS IDENTIFIED IN (“D”) ABOVE
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`e-Numerate would further like an opportunity to amend the Complaint to assert
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`infringement of all entities identified by the Government in item “D” above. The Government
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`maintains that e-Numerate should first provide its proposed amended complaint based on publicly
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`available information.
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`Plaintiffs’ Further Position
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`The Government is creating a “heads-I-win, tails-you-lose” situation by refusing to identify
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`the validation systems. The Government is arguing that e-Numerate must identify secret validation
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`systems in its amended Complaint before the Government will provide discovery. At the same
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`time, the Government is denying e-Numerate necessary discovery by limiting its document
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`production under the CFC Patent Rules to only the SEC and, in effect, preventing e-Numerate
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`from identifying the additional takings. The Government cannot have it both ways, and the
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`Government’s position is contrary to the law of this Court as set forth in Cormack.
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`Case 1:19-cv-00859-RTH Document 44 Filed 03/11/21 Page 16 of 25
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`Defendants’ Further Position
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`The Government objects to this request which e-Numerate first made on March 4, 2021. (Ex.
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`G.) Until e-Numerate provides a draft of the proposed amended complaint, this request is
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`premature.
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`(F) AMENDMENT OF THE COMPLAINT TO ASSERT INFRINGEMENT OF
`THE ‘355, ‘816 AND ‘383 PATENTS AGAINST THE SEC.
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`e-Numerate would like to amend the Complaint to assert the ‘355, ‘816 and ‘383 patents
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`against the SEC. The Government will provide its position on this proposed amendment once e-
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`Numerate provides its proposed amended complaint. y.
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`Plaintiffs’ Further Position
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`The SEC is highly secretive about the various analytical programs it runs against XBRL
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`filings it receives. e-Numerate believes that these systems infringe the ‘355, ‘816 and ‘383 patents.
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`Mr. Michael Willis, the head of the SEC’s structured data group, was interviewed in an article
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`entitled “The SEC’s Increasingly Sophisticated Use of XBRL-Tagged Data.” Ex. F.
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`The following exchange took place with Mr. Willis:
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`Q: How is the SEC using XBRL data internally?
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`A: While the word on the street may be that the SEC is not using XBRL,
`that is simply not true.
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`One way the SEC uses XBRL data is for economic analysis. When an
`analysis is looking across all SEC companies – and I repeat that: all companies,
`from the largest to the smallest– that is when the XBRL data is very useful. Some
`data aggregators may focus on the largest filers. When we need an answer that
`covers all companies, XBRL data is the only game in town for assessing
`information from the entire set of corporate filers.
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`Text analytics and sentiment analysis also use XBRL structured disclosures.
`The reason is that textual-analytical engines are wildly more effective at analyzing
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`Case 1:19-cv-00859-RTH Document 44 Filed 03/11/21 Page 17 of 25
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`structured disclosures when they know what they are looking at versus attempting
`to consume and analyze an entire unstructured report.
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`In general, given the focus on data-driven regulation at the Commission, the
`use of structured data continues to grow. That is a useful backdrop as to why the
`Commission is looking to enhance analytical capabilities.
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`Id. at page 4 of the pdf. See also https://blog.toppanmerrill.com/blog/100-xbrl-coverage-has-
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`transformed-sec-review-and-enforcement
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`e-Numerate believes that the above analytics are performed using the inventions claimed
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`in the ‘816, ‘383, and/or ‘355 patents. For example, the largest SEC filers in a given industry will
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`have sales in billions of dollars. The smallest SEC filers in a given industry will have sales in
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`millions (or even hundreds of thousands of dollars). Those numbers are: (1) in different formats
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`for purposes of the ‘816 patent; and (2) in different units of measure for purposes of the ‘383
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`patent. Furthermore, e-Numerate believes that the fraud, compliance and analytic checks are
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`macro-based and infringe the ‘355 patent as well.
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`e-Numerate contends that it should be allowed to amend the Complaint to assert these
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`patents and that the Government be ordered to produce documents relating to them. To the extent
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`that the Government claims that these systems and related documents are highly sensitive, there is
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`a protective order in this matter that gives the Government protection for its confidential
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`information.
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`Defendant’s Further Position
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`The government objects to this request which e-Numerate first made on March 4, 2021. (Ex.
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`G.) Until e-Numerate provides a draft of the proposed amended complaint, this request is
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`premature.
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`Case 1:19-cv-00859-RTH Document 44 Filed 03/11/21 Page 18 of 25
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`(G) REQUIRING THE GOVERNMENT TO IDENTIFY ALL XBRL ANALYSIS
`SYSTEMS AT ALL GOVERNMENT AGENCIES
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`e-Numerate requested that the Government identify all analytical systems in its
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`possession, custody and control that are used to analyze XBRL filings. The Government
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`objects to this request on undue burden grounds and as this reques