Case 3:20-cv-05784-ZNQ-DEA Document 146 Filed 12/14/22 Page 1 of 7 PageID: 4871
`
`Cynthia S. Betz
`Associate
`T. 973-848-5377
`F. 973-297-6636
`cbetz@mccarter.com
`
`McCarter & English, LLP
`Four Gateway Center
`100 Mulberry Street
`Newark, NJ 07102-4056
`www.mccarter.com
`
`December 14, 2022
`
`VIA ECF
`
`Hon. Douglas E. Arpert, U.S.M.J.
`U.S. District Court for the District of New Jersey
`Clarkson S. Fisher Building & U.S. Courthouse
`402 East State Street
`Trenton, NJ 08608
`
`Re: OANDA Corporation v. GAIN Capital Holdings, Inc., et al.
`Civil Action No. 20-05784-ZNQ-DEA
`
`Dear Judge Arpert:
`
`We, along with our co-counsel from Koning Zollar LLP, represent Plaintiff OANDA
`Corporation (“OANDA”) in this matter, and write to respond to GAIN’s December 7, 2022 letter
`“motion” to preclude OANDA from amending its infringement contentions. GAIN’s letter,
`which was filed without prior notice to OANDA, much less any effort to meet and confer, seeks
`drastic (and possibly even case-dispositive) relief based on a gross distortion of the factual
`record. It must be denied for the following reasons.
`
`GAIN’s Drastic Request For Preemptive Relief Is Improper And Should Be Denied
`
`GAIN’s December 7, 2022 letter (Dkt. No. 145, “Letter”) seeks extraordinary relief—a
`preemptive order precluding OANDA from bringing a motion to amend its infringement
`contentions under Local Patent Rule 3.7. Putting aside the complete lack of underlying factual
`basis for this relief (as discussed further below), the request is procedurally improper in a variety
`of ways and should be denied on that basis alone.
`As an initial matter, GAIN does not cite a single case that has preemptively precluded a party
`from amending its infringement contentions under Local Patent Rule 3.7. Indeed, the only case
`relied upon in GAIN’s letter did not consider or grant such relief—it instead determined the
`propriety of specific amendments proffered by the patentee. See Eagle View Techs., Inc. v.
`Xactware Sols., Inc., No. CV 15-7025 (RBK/JS), 2017 WL 5886004, at *7 (D.N.J. Nov. 29,
`2017). The absence of any authority for the issuance of a preemptive order precluding future
`amendments of infringement contentions is hardly surprising. Courts typically decide disputes
`that are ripe and do not issue advisory rulings. In deciding whether to exercise discretion to
`permit an amendment, the Court must have before it an actual proposed amendment presented to
`the Court, along with a motion justifying the basis for leave to amend. By asking the Court
`instead to issue a blanket order preemptively cutting off any future right to amend before
`OANDA has even invoked that right, GAIN is circumventing that normal approach to judicial
`decision making and – because the relevant factual predicates going to the grant or denial of such
`a motion have not yet occurred – inviting an abuse of discretion.
`
`

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`Hon. Douglas E. Arpert, U.S.M.J.
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`The perils of the preemptive approach urged by GAIN are demonstrated by the ambiguity of the
`relief it seeks. Rather than deciding whether a specific proposed amendment will or will not be
`allowed, GAIN is asking the Court to issue a broad order with uncertain contours. GAIN seeks
`to preclude OANDA from “asserting any theories of infringement that have not been disclosed in
`OANDA’s [Infringement Contentions] that rely on source code or technical documents produced
`to date or any theories that could have been raised based on such discovery.” (Letter at 1.) This
`proposed relief could be read as permitting OANDA to assert any infringement theories fairly
`encompassed by its existing infringement contentions (even if those contentions are not currently
`as specific as GAIN would like), and only preventing OANDA from asserting brand new
`theories. While a preemptive order against amendment would be unjustifiable for all the reasons
`provided in this response, it appears that GAIN may be seeking much more expansive relief,
`given its stated position that OANDA has “no real [infringement] contentions to live by.” (Letter
`at 6.) If GAIN’s position is that OANDA has “no real contentions” and that OANDA should be
`precluded from amending or supplementing those contentions, then GAIN’s proposed preclusion
`order appears to be intended to operate effectively as an order granting summary judgment on
`infringement. Whether by accident or design, GAIN appears to have filed a request for
`potentially case-dispositive relief by way of a letter.1 This Court should avoid even considering
`such an unnecessary and far-reaching order when it can simply wait for an actual motion to
`amend pursuant to Rule 3.7, consider briefing and argument under the relevant standards, and
`make a narrower decision on a complete record. See, e.g., Cochlear Ltd. V. Oticon Med. AB, No.
`18-6684 BRM DEA, 2019 WL 3429610, at *13 (D.N.J. July 29, 2019) (granting Plaintiff’s
`motion for leave to amend infringement contentions).
`In addition, GAIN’s filing defies the Local Rules. If this Letter, which GAIN concedes is a
`“motion,” (Letter at 6) is intended as a backdoor attempt at summary judgment, it should have
`been directed to Judge Quraishi under the specific rules he has adopted for such motions, and it
`could not have been filed without prior approval. See Judge Quraishi Judicial Preferences
`(requiring permission from the Court before filing case-dispositive motions).
`This Court should not countenance GAIN’s improper motion. GAIN’s request for relief should
`be denied in its entirety.
`GAIN’s Contention That OANDA Has Lacked Diligence In Seeking Discovery Into GAIN’s
`Products Is Baseless
`
`Even if this Court were to consider GAIN’s preemptive request to preclude amendments to
`OANDA’s infringement contentions, rather than simply ruling upon a motion to amend when
`one is filed, GAIN’s preclusion argument is baseless. The central premise of GAIN’s Letter is
`that it produced complete source code and technical information allowing OANDA to understand
`
`1 The ambiguity of GAIN’s requested relief is another reason why a meet and confer would have
`been productive before GAIN sought Court intervention.
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`Hon. Douglas E. Arpert, U.S.M.J.
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`its systems and products more than a year ago, that OANDA has just spent the last year sitting on
`its hands, and that OANDA therefore could never demonstrate diligence under Local Patent Rule
`3.7 for any proposed amendment. (Letter at 4-5.)
`But this version of events rewrites history. It is true that GAIN allowed OANDA to inspect
`some of its source code about a year ago. But inspecting raw source code by itself is not enough
`to gain a meaningful understanding of how GAIN’s backend systems operate, without also
`knowing which source code was in operation and when, and without having complete,
`contemporaneous technical documents about GAIN’s products. Accordingly, over the past year,
`through today, OANDA has been diligently working to obtain the information it needs to fully
`understand the operation of GAIN’s backend systems via meet and confer efforts, written
`discovery, and depositions. GAIN, meanwhile, has been obstructing those efforts every step of
`the way.
`For example, in December 2021, immediately following the initial inspection of source code,
`OANDA contacted GAIN with clarifying questions about the source code, including which
`source code was currently in use, and for any old source code that had been produced, when it
`stopped being used2—basic, but critical, information to help understand how GAIN’s systems
`function. This inquiry was met with stonewalling by GAIN. Over the course of several months,
`GAIN did not respond to emails at all or, when it did respond, repeatedly professed confusion
`over this straightforward request. Only after persistent meet-and-confer efforts by OANDA did
`GAIN provide the requested information—in April 2022, nearly four months after OANDA’s
`initial inquiry.
`Upon reviewing GAIN’s source code in light of the new information about which source code
`was in use, as well as GAIN’s production of documents in response to OANDA’s two sets of
`Requests for Production, it became clear to OANDA that GAIN’s production of documents
`related to infringement was incomplete in material ways. GAIN, for example, claims in its non-
`infringement contentions that its products do not infringe the ’336 Patent because “all clients of
`the accused system use direct socket connections.” But even though GAIN had agreed to
`produce all documents in support of its non-infringement theories, its document production
`contained no documents referring to “direct socket connections,” and the in-use source code did
`not appear to reflect use of direct socket connections either. Similarly, GAIN claims in its non-
`infringement contentions that its products do not infringe the ’336 Patent because “[t]he Rate
`Server Spreader, which is in communication with the Rates Manager, communicates directly
`with the client platform, rather than with any server frontend.” But again, GAIN had produced
`
`2 OANDA refers to numerous documents and communications between the parties in this letter,
`but we are mindful of the guidance of Appendix R to the local rules and have not attached them
`in an effort to avoid inundating the Court with unnecessary paper and party correspondence.
`OANDA will provide copies of the referenced documents and communications upon request.
`
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`Hon. Douglas E. Arpert, U.S.M.J.
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`no documents referencing a “Rate Server Spreader,” and in-use source code did not reflect the
`use of a Rate Server Spreader. The same thing was true with respect to many of GAIN’s non-
`infringement contentions. Accordingly, on June 9, 2022, OANDA propounded ten additional
`Requests for Production (RFP Nos. 44-53) targeted specifically at GAIN’s non-infringement
`contentions, so that it could understand GAIN’s position on how its accused products and their
`backend systems allegedly functioned. (See, e.g., OANDA Request for Production No. 44 (“All
`DOCUMENTS and COMMUNICATIONS CONCERNING the development, use, and/or
`operation, in connection with the ACCUSED PRODUCTS, of the “direct socket connections”
`referenced in YOUR non-infringement contentions.”)).
`More than six months later, and despite OANDA’s diligent efforts, GAIN has not produced a
`single document in response to these Requests. At first, GAIN served improper blanket
`objections, claiming that the requests were irrelevant, duplicative, and imposed an undue burden
`on GAIN, and refused to search for or produce any documents. During subsequent meet-and-
`confer efforts that were promptly initiated by OANDA, GAIN took the position that it would not
`produce any documents in response to these ten Requests for Production unless and until
`OANDA agreed to amend the ESI order governing the entire case. While that ESI order had
`been extensively negotiated, agreed to by the parties, and entered by the Court less than one year
`prior, and while the concept of placing hard limits on custodians and search terms had been
`considered and rejected, GAIN held firm to its position. After meet-and-confer efforts reached
`an impasse, OANDA promptly brought this issue to the attention of the Court on September 21,
`2022.
`On October 17, 2022, the Court ordered the parties to meet and confer over search terms and
`custodians, which they did extensively over the course of several weeks, and on November 15,
`2022, the parties reached an agreement. On November 23, 2022, pursuant to that agreed
`protocol, OANDA requested that GAIN initially propose search terms responsive to the
`outstanding Requests for Production by December 9, 2022. GAIN did not respond until
`December 8, 2022, whereupon it requested additional time, including because of illness among
`GAIN’s team of lawyers. GAIN has indicated that it will propose search terms by no later than
`December 16, 2022. Accordingly, as of the date of this letter, GAIN has not searched for,
`much less produced, any documents responsive to RFPs propounded by OANDA more than
`six months ago to obtain information necessary to OANDA’s understanding of GAIN’s
`backend systems.
`In addition, in February 2022, to understand the operation of GAIN’s accused products, OANDA
`noticed the deposition of David Leach, a Senior Software Engineer at GAIN. For various
`scheduling reasons, including Mr. Leach’s health issue that rendered him unavailable for more
`than two months, that deposition did not take place until September 21, 2022. At the deposition,
`when presented with the architectural diagrams that GAIN has produced to date, Mr. Leach
`testified that none of them accurately represented GAIN’s accused product as it currently
`operates. Indeed, with respect to one diagram he was shown, Mr. Leach indicated that he had
`
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`Hon. Douglas E. Arpert, U.S.M.J.
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`likely revised this diagram dozens of times since 2014, and that he would have “deleted” such
`revised versions. Mr. Leach further testified that he had received no instructions from GAIN to
`preserve documents relevant to this litigation. Mr. Leach also identified other sources of
`technical documents concerning GAIN’s backend systems that had not been produced by GAIN
`in the lawsuit.
`On October 4, 2022, OANDA sent a meet-and-confer letter in light of Mr. Leach’s deposition
`testimony, demanding that GAIN produce missing technical documents, including architectural
`diagrams from the relevant period, and seeking assurances about GAIN’s preservation of
`documents given Mr. Leach’s testimony suggesting spoliation. GAIN responded two weeks
`later, but only to state that Mr. Leach—contrary to his sworn testimony—did receive a litigation
`hold notice, and to represent to OANDA that it would respond substantively sometime after
`November 1, 2022. After multiple follow-ups by OANDA, it took until December 2, 2022—two
`months after the original letter was sent—for GAIN to actually provide that promised response.
`GAIN’s belated response still addressed none of the issues adequately. For example, GAIN
`asserted that it had produced “the current or latest version of relevant and responsive architecture
`diagrams,” without providing any further detail or any explanation about how that could be
`reconciled with Mr. Leach’s testimony. With respect to additional technical documents
`requested by OANDA, GAIN indicated that it was “still investigating whether it is possible to
`search and retrieve information.” OANDA responded with a letter of its own on December 8,
`2022, seeking additional clarification of GAIN’s position and requesting transparency as to what
`technical documents GAIN is withholding. GAIN has yet to respond, and while OANDA takes
`seriously its obligation to exhaust meet-and-confer efforts before seeking Court intervention, it
`appears likely that this matter may be brought before the Court shortly.
`In sum, contrary to GAIN’s claim that OANDA has had complete information for a year and has
`lacked diligence in acting on it, the record shows that GAIN’s production is still incomplete, and
`that GAIN has consistently resisted OANDA’s efforts to obtain critical technical documents.
`GAIN is thus demanding that the Court preclude OANDA from amending its infringement
`contentions using source code and technical documents produced to date, while at the same time
`continuing a year-long effort to obstruct OANDA from obtaining the discovery critical to
`understanding that source code and technical data. That gamesmanship should not be rewarded.
`Once GAIN actually provides a complete set of technical documents that allows OANDA to
`understand the function of GAIN’s non-public backend systems, OANDA will be able to
`efficiently review GAIN’s source code and conduct a necessary 30(b)(6) deposition. Then, and
`only then, will OANDA be in a position to seek leave to amend its infringement contentions, if
`necessary. OANDA believes that there would plainly be good cause for such supplementation
`under Rule 3.7, including on the ground that it would amount to “recent discovery of nonpublic
`information about the Accused Instrumentality which was not discovered, despite diligent
`efforts, before the service of the Infringement Contention.” L. Pat. R. 3.7; Cochlear Ltd. v.
`Oticon Med. AB, No. CV 18-6684 BRM DEA, 2019 WL 3429610, at *13 (D.N.J. July 29, 2019)
`
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`Hon. Douglas E. Arpert, U.S.M.J.
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`(granting leave to amend contentions based on non-public information uncovered through
`discovery); TFH Publ’ns, Inc. v. Doskocil Mfg. Co., 705 F. Supp. 2d 361, 365–66 (D.N.J. 2010)
`(noting that contentions are designed to be “preliminary,” and do not operate as a “straitjacket”).
`This Court, however, need not decide that issue now. The only issue presented by GAIN’s letter
`is whether the Court should order blanket preclusion of any future amendment to OANDA’s
`infringement contentions. There is no basis on this record to issue such an order.
`GAIN Would Suffer No Prejudice From A Future Amendment To OANDA’s Infringement
`Contentions
`In considering whether to permit amendments to infringement contentions, the Court may also
`consider whether permitting the proposed amendments would prejudice the defendant. Cochlear
`Ltd., 2019 WL 3429610, at *13. While GAIN states that permitting any amendment by OANDA
`to its infringement contentions would be “prejudicial” (Letter at 4), GAIN does not explain what
`prejudice it would actually suffer, much less identify some prejudice that could possibly justify a
`blanket preclusion order.3 All upcoming deadlines in the current Scheduling Order are listed as
`“[TBD],” with dates to be set once the Court issues its claim construction order. (Dkt. No. 96.)
`Accordingly, once GAIN actually complies with its obligation to produce a complete set of
`technical documents, OANDA can seek leave to amend its contentions to further focus this
`dispute, and GAIN will have ample time and opportunity to conduct any remaining discovery
`related to, and otherwise respond to, those amended infringement contentions. As this Court has
`recognized, a defendant is not prejudiced by amendments under those circumstances. See
`Cochlear Ltd., 2019 WL 3429610, at *13 (“With no set end of discovery, Defendant will have
`ample opportunity to seek discovery to counter Plaintiff's proposed Amended Infringement
`Contentions and it is axiomatic that granting the Motion will not significantly delay resolution of
`litigation in which discovery has no end date.”); see also Eagle View Techs., Inc., 2017 WL
`5886004, at *7 (D.N.J. Nov. 29, 2017) (rejecting argument that the defendant was prejudiced by
`supplementation of infringement contentions where it would have several months before the
`close of discovery to respond).
`
`*****
`For all the foregoing reasons, the Court should deny the relief sought by GAIN in its Letter. In
`addition, since GAIN apparently wishes for OANDA to provide greater clarity in its
`infringement contentions, and OANDA needs GAIN to comply with its discovery obligations in
`order for that to happen, OANDA proposes that the Court order the parties to meet and confer to
`
`3 GAIN points to definitions contained within discovery requests to argue that OANDA has not
`sufficiently identified the accused products. (Letter at 5.) But there is no mystery to what
`products are accused of infringement. As OANDA’s complaint and contentions make clear,
`GAIN’s “foreign exchange trading technologies” are the products that are infringing OANDA’s
`patents. (Dkt. 59 at 20; Letter, Ex. D at 4.)
`
`

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`Hon. Douglas E. Arpert, U.S.M.J.
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`set a deadline by which GAIN must (1) substantially complete its production of documents in
`response to Requests for Production No. 44-53, and (2) provide a complete substantive response
`to the issues raised in OANDA’s October 4, 2022 letter concerning the David Leach deposition.
`
`Respectfully submitted,
`
`/s/ Cynthia S. Betz
`
`Cynthia S. Betz
`
`cc: All Counsel of Record (via ECF)
`
`