Case 3:20-cv-05784-BRM-DEA Document 67 Filed 06/11/21 Page 1 of 5 PageID: 2560
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`June 11, 2021
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`Arnold B. Calmann
`(973) 645-4828
`abc@saiber.com
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`BY CM/ECF
`The Honorable Douglas E. Arpert, U.S.M.J.
`United States District Court
`Clarkson S. Fisher Federal Building
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`402 East State Street
`Trenton, New Jersey 08608
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`Re: Oanda Corporation v. Gain Capital Holdings, Inc., et al.
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`Civil Action No. 20-05784-BRM-DEA
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`Dear Magistrate Judge Arpert:
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`We along with our co-counsel Wilson Sonsini Goodrich & Rosati P.C., represent
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`Defendants GAIN Capital Holdings, Inc. and GAIN Capital Group, LLC (collectively, “GAIN”) in
`the above matter.
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`In accordance with Your Honor’s Chambers Rules, we write to respectfully request Your
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`Honor’s permission to file a motion for judgment on the pleadings, pursuant to Fed. R. Civ. P.
`12(c), of all Counts in Plaintiff OANDA Corporation’s (“OANDA”) First Amended Complaint
`(“FAC”) (ECF No. 59).1
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`This issue is ripe for this Court and is a preliminary matter that Defendants respectfully
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`submit should be decided before the parties launch into full-blown and expensive discovery on all
`aspects of this case, and the Court expends significant efforts in overseeing the case and the
`discovery disputes that inevitably will arise.
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`I. Plaintiff’s Patent Claims Are Invalid for Lack of Patent Eligibility Under 35 U.S.C. § 101
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`Section 101 of Title 35 requires that the alleged invention must be patent eligible (not on an
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`abstract idea or natural phenomenon). See Alice Corp. Pty. v. CLS Bank Int’l, 573 U.S. 208, 216
`134 S. Ct. 2347, 2354, 82 L. Ed. 2d 296, 189 L. Ed. 2d 296 (2014). As Defendants’ proposed
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`1 As the Court is aware, the parties are to meet with Your Honor at the Scheduling Conference on
`June 15. This letter is submitted in accordance with Your Honor’s Chambers Rules, but in an
`abundance of caution, the Joint Discovery Plan submitted by the parties highlights GAIN’s
`intention to file the proposed motion, subject to Your Honor’s approval.
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`Case 3:20-cv-05784-BRM-DEA Document 67 Filed 06/11/21 Page 2 of 5 PageID: 2561
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`Honorable Douglas E. Arpert, U.S.M.J.
`June11, 2021
`Page 2
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`motion will show, each claim of the patents-in-suit is invalid for being drawn to patent-ineligible
`subject matter. Whether patent claims are invalid for being drawn to patent-ineligible subject
`matter “frequently has been, resolved on a Rule 12(b)(6) or (c) motion where the undisputed facts,
`considered under the standards required by that Rule, require a holding of ineligibility under the
`substantive standards of law.” SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1166 (Fed. Cir.
`2018); see also Sensormatic Elecs., LLC v. Wyze Labs, Inc., 484 F. Supp. 3d 161 (D. Del. 2020)
`(granting Rule 12(c) motion patent invalidity under § 101); Baggage Airline Guest Servs., Inc. v.
`Roadie, Inc., 351 F. Supp. 3d 753 (D. Del. 2019) (same); Citrix Sys., Inc. v. Avi Networks, Inc., 363
`F. Supp. 3d 511 (D. Del. 2019) (same).
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`Here, the claims arguably improve upon “traditional on-line currency market[s].” However,
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`such alleged improvements themselves are abstract ideas accomplished through the use of general,
`non-specialized computer components. For example, the ’311 patent contains only method claims
`whereby an online currency trade is executed if a first or second current exchange rate price is better
`than or equal to a user’s requested trade price and refusing a trade if it is not. This simple logical
`decision tree is an abstract idea and not a technical solution. The system claims of the ’336 patent
`suffer from similar deficiencies: they too are drawn to abstract ideas that are implemented through
`general, non-specialized computer components.
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`Accordingly, Defendants’ motion should resolve this case; and even if certain claims
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`remain, which Defendants believe is unlikely, this Court would then be able to consider the nature
`of the remaining claims in tailoring the scope of discovery.
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`II. Defendants’ Prior Rule 12(b)(6) Motion Does Not Preclude
` a Rule 12(c) Motion for Lack of Patent Eligibility
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`Although Defendants previously filed a Rule 12(b)(6) motion, which the Court granted-in-
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`part and denied-in-part (ECF No. 52), Defendants are not prevented from filing a Rule 12(c)
`motion. The Federal Rules of Civil Procedure specifically provide that “[a] Rule 12(c) motion for
`judgment on the pleadings may be filed after the pleadings are closed.” Turbe v. Gov’t of the V.I.,
`938 F.2d 427, 428 (3d Cir. 1991). Here, the pleadings closed when Plaintiff filed its answer to
`Defendants’ counterclaims on May 27, 2021 (ECF No. 66). Thus, Defendants are well within the
`Rules and had no opportunity to file a Rule 12(c) motion before then.
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`Moreover, precluding Defendants’ proposed motion because they previously filed a Rule
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`12(b)(6) motion would render Rule 12(c) superfluous. Rule 12(c) motions exist because parties are
`permitted to move for judgment on the pleadings even when there has been a denial or partial grant
`of relief under a Rule 12(b)(6) motion. See Akshayray, Inc. v. Getty Petroleum Mktg., Inc., Civil A.
`No. 06-2002 (NLH) (AMD), 2009 WL 961442 (D.N.J. Apr. 08, 2009) (granting a 12(c) motion on
`remaining claim that survived defendants’ 12(b)(6) motion). In addition, Defendants’ prior Rule
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`Case 3:20-cv-05784-BRM-DEA Document 67 Filed 06/11/21 Page 3 of 5 PageID: 2562
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`Honorable Douglas E. Arpert, U.S.M.J.
`June11, 2021
`Page 3
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`12(b)(6) motion was not based on invalidity under 35 U.S.C. §101, so the issue raised in
`Defendants’ proposed Rule 12(c) motion has yet to be considered by the Court.
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`III. The PTAB’s Decisions Do Not Preclude a Motion to Dismiss
` for Lack of Patent Eligibility
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`Although the issue of whether the patents-in-suit claim patentable subject matter was the
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`subject of Defendants’ Covered Business Method Review petitions (“CBM”) before the Patent Trial
`and Appeals Board (“PTAB”), Defendants are not estopped by the PTAB’s decisions not to institute
`the CBMs. As stated by the Federal Circuit in Credit Acceptance Corp. v. Westlake Servs.,
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`[A] CBM review proceeds in stages: first, the Board decides whether to institute a
`review, and second, if review is instituted, the proceeding enters a trial stage and the
`Board later issues a ‘final written decision’ under 35 U.S.C. § 328(a). Once the Board
`issues a final written decision, the estoppel statute applies.
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`859 F.3d 1044, 1049 (Fed. Cir. 2017).2 As a corollary, estoppel does not apply to the PTAB’s
`institution decisions. Thus, Defendants are not precluded from asking this Court to decide the
`question of whether the patents are invalid under 35 U.S.C. §101.
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`Moreover, the PTAB’s institution decisions were based on preliminary issues and not on the
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`merits. As discussed above, a CBM is conducted in two stages: the institution stage and the trial
`stage. However, “CBMR proceedings on the merits” only begin after the CBM is instituted.
`Achates Reference Publ’g, Inc. v. Apple Inc., 803 F.3d 652, 654 (Fed. Cir. 2015), overruled on
`other grounds by Wi-Fi One, LLC v. Broadcom Corp., 878 F.3d 1364, 1367 (Fed. Cir. 2018). The
`basis of the PTAB’s denial was on a preliminary ground – the framing of the issue: the PTAB
`found that Defendants’ prior characterization of the alleged abstract idea of “currency trading” was
`framed too broadly; and because it was the petitioner’s “burden” to frame the abstract idea, the
`PTAB felt it was bound not to recast the description of the abstract idea, and thus denied institution.
`Decision, GAIN Capital Holdings, Inc. v. OANDA Corporation, CBM2020-0021, Paper No. 10
`(P.T.A.B. March 18, 2021) (hereinafter, “’311 Decision”) at 31-32 (citing 35 U.S.C. § 324(a); SAS
`Inst., Inc. v. Iancu, 138 S.Ct. 1348, 1356-57 (2018)); Decision, GAIN Capital Holdings, Inc. v.
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`2 Section 325(e)(1) of Title 35 provides the estoppel provision for CBMs:
`The petitioner in a post-grant review of a claim in a patent under this chapter that
`results in a final written decision under section 328(a), or the real party in interest
`or privy of the petitioner, may not request or maintain a proceeding before the
`Office with respect to that claim on any ground that the petitioner raised or
`reasonably could have raised during that post-grant review.
`Credit Acceptance Corp. v. Westlake Servs., 859 F.3d 1044, 1049 (Fed. Cir. 2017) quoting 35
`U.S.C. § 325(e)(1).
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`Case 3:20-cv-05784-BRM-DEA Document 67 Filed 06/11/21 Page 4 of 5 PageID: 2563
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`Honorable Douglas E. Arpert, U.S.M.J.
`June11, 2021
`Page 4
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`OANDA Corporation, CBM2020-0022, Paper No. 10 (P.T.A.B. March 18, 2021) (hereinafter, “’336
`Decision”) at 27 (same). In doing so, the PTAB did not rule on the merits that the claims are not
`abstract. Thus, this question—the one that is the subject of Defendants’ proposed motion—is still
`open.
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`Notwithstanding the PTAB’s silence as to the ultimate question of whether the patents-in-
`suit are directed to patent-ineligible abstract ideas, the PTAB did reject OANDA’s arguments that
`certain claims of the patents-in-suit3 were not subject to CBM review because they were allegedly
`technological inventions. Applying the standard that a claim does not include a “technological
`feature” if its “elements are nothing more than general computer system components used to carry
`out the claimed process,” (’311 Decision at 13-14 (citing Blue Calypso, LLC v. Groupon, Inc., 815
`F.3d 1331, 1341 (Fed. Cir. 2016))), the PTAB found that both patents failed to recite a
`technological feature that was novel and unobvious because they claimed no more than general
`computer system components. ’311 Decision at 17; ’336 Decision at 14. This inquiry is relevant to
`the evaluation of subject matter eligibility under step two of Alice Corp. Pty. Ltd. v. CLS Bank Int’l,
`134 S. Ct. 2347, 82 L. Ed. 2d 296, 189 L. Ed. 2d 296 (2014), because when claims are “directed to
`an abstract idea” and “merely requir[e] generic computer implementation,” they “do[] not move into
`[§] 101 eligibility territory.” buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1354 (Fed. Cir. 2014)
`(internal quotation marks and citation omitted); see also BASCOM Glob. Internet Servs., Inc. v.
`AT&T Mobility LLC, 827 F.3d 1341, 1350 (Fed. Cir. 2016) (recognizing that claims directed to an
`abstract idea that add “the requirement to perform it on the Internet” do not state an inventive
`concept).
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`Accordingly, despite declining to institute Defendants’ CBMs, the PTAB provided
`important guidance regarding the patentability of the claims of the patents-in-suit when it found that
`they failed to recite a technological feature.
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`* * *
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`3 The PTAB’s institution decision reviewed whether claim 1 of the ’311 patent and claim 5 of the
`’336 patent were subjected to CBM review.
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`Case 3:20-cv-05784-BRM-DEA Document 67 Filed 06/11/21 Page 5 of 5 PageID: 2564
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`Honorable Douglas E. Arpert, U.S.M.J.
`June11, 2021
`Page 5
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`For the foregoing reasons, we respectfully request that Your Honor grant GAIN leave to file
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`its proposed Section 101 Motion, which is similar to other Alice-type motions granted by other
`courts.
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`We thank the Court for its consideration, and look forward to hearing from Your Honor at
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`the Court’s earliest convenience.
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` Arnold B. Calmann
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`Counsel of record (by CM/ECF)
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`cc:
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