Case 3:20-cv-05784-ZNQ-DEA Document 79 Filed 07/19/21 Page 1 of 36 PageID: 3024
`
`John E. Flaherty
`jflaherty@mccarter.com
`Cynthia S. Betz
`cbetz@mccarter.com
`McCarter & English, LLP
`100 Mulberry Street
`4 Gateway Center
`Newark, NJ 07102
`T: 973-622-4444
`
`Erik Dykema
`erik@kzllp.com
`Koning Zollar LLP
`4 Manheim Road
`Essex Fells, New Jersey 07021
`T: 858.252.3234
`F: 858.252.3238
`
`ATTORNEYS FOR PLAINTIFF
`OANDA Corporation
`
`Drew Koning (pro-hac vice)
`drew@kzllp.com
`Blake Zollar (pro-hac vice)
`blake@kzllp.com
`Koning Zollar LLP
`169 Saxony Road, STE 115
`Encinitas, CA 92024
`T: 858.252.3234
`F: 858.252.3238
`
`Shaun Paisley (pro-hac vice)
`shaun@kzllp.com
`Koning Zollar LLP
`470 James Street, Suite 007
`New Haven, CT 06513
`T: 203.951.1213
`F: 858.252.3238
`
`UNITED STATES DISTRICT COURT
`DISTRICT OF NEW JERSEY
`
`OANDA Corporation,
`
`Plaintiff,
`
`v.
`
`GAIN Capital Holdings, Inc.;
`GAIN Capital Group, LLC.
`
`Defendants.
`
`Civil Action No. 3:20-cv-5784
`Judge: Hon. Zahid N. Quraishi
`
`OANDA’S BRIEF IN OPPOSITION TO DEFENDANTS’
`MOTION FOR JUDGMENT ON THE PLEADINGS (DKT. 69)
`
`

`

`Case 3:20-cv-05784-ZNQ-DEA Document 79 Filed 07/19/21 Page 2 of 36 PageID: 3025
`
`TABLE OF CONTENTS
`INTRODUCTION ............................................................................................................... 1
`
`I.
`
`II. BACKGROUND .................................................................................................................. 3
`
`A. OANDA’S ALLEGATIONS ABOUT THE PATENTS AT ISSUE. ............................................... 3
`1.
`The ’311 Patent ............................................................................................................ 4
`2.
`The ʼ336 Patent. ........................................................................................................... 7
`B. THE PTAB’S DECISION DENYING INSTITUTION OF CBM REVIEW. .................................... 9
`III. ARGUMENT ..................................................................................................................... 10
`
`A. GAIN’S FAILURE TO MEANINGFULLY ADDRESS OANDA’S INVENTIVENESS
`ALLEGATIONS IS FATAL TO ITS MOTION. .................................................................................. 11
`B. GAIN’S INVALIDITY ARGUMENTS ARE MERITLESS EVEN UNDER THE INCORRECT
`STANDARDS ADVANCED IN ITS MOTION. .................................................................................. 16
`1. Alice Step One: Neither Patent is Directed to an Abstract Idea................................ 16
`2. Alice Step Two: Both Patents Recite Inventive Concepts ........................................ 24
`C. EVEN IF THE COURT WERE TO GRANT THE MOTION, OANDA WOULD BE ENTITLED TO
`LEAVE TO AMEND. .................................................................................................................... 29
`IV. CONCLUSION .................................................................................................................. 30
`
`

`

`Case 3:20-cv-05784-ZNQ-DEA Document 79 Filed 07/19/21 Page 3 of 36 PageID: 3026
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`Aatrix Software, Inc. v. Green Shades Software, Inc.,
`882 F.3d 1121 (Fed. Cir. 2018)........................................................................................ passim
`
`Affinity Labs of Tex., LLC v. DirecTV, LLC,
`838 F.3d 1253 (Fed. Cir. 2016)................................................................................................11
`
`Alice Corp. v. CLS Bank Int’l,
`573 U.S. 208 (2014) ......................................................................................................... passim
`
`Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada (U.S.),
`687 F.3d 1266 (Fed. Cir. 2012)................................................................................................11
`
`Bascom Glob. Internet Servs., Inc. v. AT&T Mobility LLC,
`827 F.3d 1341 (Fed. Cir. 2016)........................................................................................ passim
`
`Berkeley*IEOR v. Teradata Operations, Inc.,
`448 F. Supp. 3d 864 (N.D. Ill. 2020) .......................................................................................25
`
`Berkheimer v. HP Inc.,
`881 F.3d 1360 (Fed. Cir. 2018)..........................................................................................11, 12
`
`Boom! Payments, Inc. v. Stripe, Inc.,
`839 F. App’x 528 (Fed. Cir. 2021) ..........................................................................................20
`
`Bozeman Fin. LLC v. Fed. Rsrv. Bank of Atlanta,
`955 F.3d 971 (Fed. Cir. 2020)............................................................................................12, 20
`
`buySAFE, Inc. v. Google, Inc.,
`765 F.3d 1350 (Fed. Cir. 2014)................................................................................................26
`
`Carter v. Fairbanks,
` No. 09–4032, 2009 WL 2843882 (D.N.J. Sept. 2, 2009) .......................................................29
`
`Cellspin Soft, Inc. v. Fitbit, Inc.,
`927 F.3d 1306 (Fed. Cir. 2019)..............................................................................12, 13, 15, 25
`
`Consumer 2.0, Inc. v. Tenant Turner, Inc.,
`No. 2:18cv355, 2019 WL 8895213 (E.D. Va. Apr. 4, 2019) ...................................................15
`
`DDR Holdings, LLC v. Hotels.com, L.P.,
`773 F.3d 1245 (Fed. Cir. 2014)................................................................................................20
`
`ii
`
`

`

`Case 3:20-cv-05784-ZNQ-DEA Document 79 Filed 07/19/21 Page 4 of 36 PageID: 3027
`
`Dropbox, Inc. v. Synchronoss Techs., Inc.,
`815 F. App’x 529 (Fed. Cir. 2020) ..........................................................................................24
`
`Enfish, LLC v. Microsoft Corp.,
`822 F. 3d 1327 (Fed. Cir. 2016).............................................................................17, 18, 23, 24
`
`Fast 101 Pty Ltd. v. CitiGroup Inc.,
`834 F. App’x 591 (Fed. Cir. 2020) ..........................................................................................22
`
`Ipa Techs, Inc. v. Amazon.com, Inc.,
`352 F. Supp. 3d 335 (D. Del. 2019) .........................................................................................15
`
`Koninklijke KPN N.V. v. Gemalto M2M GmbH,
`942 F.3d 1143 (Fed. Cir. 2019)................................................................................................19
`
`LendingTree, LLC v. Zillow, Inc.,
`656 F. App’x 991 (Fed. Cir. 2016) ..........................................................................................20
`
`McRO, Inc. v. Bandai Namco Games Am.,
`837 F.3d 1299 (Fed. Cir. 2016)..........................................................................................17, 20
`
`Nasdaq, Inc. v. IEX Grp., Inc.,
`No. 18-3014-BRM-DEA, 2019 WL 102408 (D.N.J. Jan. 4, 2019) ...................................12, 13
`
`Phillips v. Cnty. of Allegheny,
`
`515 F.3d 224 (3d Cir. 2008).....................................................................................................12
`
`Sapphire Crossing LLC v. Quotient Tech. Inc.,
`No. 18-1717-MN-CJB, 2020 WL 1550786 (D. Del. Apr. 1, 2020) ........................................30
`
`Strikeforce Techs., Inc. v. WhiteSky, Inc.,
`No. 13-1895 (SRC), 2013 WL 4876306 (D.N.J. Sept. 11, 2013) ............................................16
`
`Synopsys, Inc. v. Avatar Integrated Sys., Inc.,
`No. 20-cv-04151, 2020 WL 6684853 (N.D. Cal. Nov. 12, 2020) ...........................................15
`
`Tice v. Winslow Twp. Police,
`No. 13-6894 RBK/JS, 2014 WL 3446611 (D.N.J. July 11, 2014) ....................................29, 30
`
`Trading Techs. Int’l, Inc. v. CQG, INC.,
`675 F. App’x 1001 (Fed. Cir. 2017) ..................................................................................19, 21
`
`Trading Techs. Int’l, Inc. v. IBG LLC,
`921 F.3d 1084 (Fed. Cir. 2019)..........................................................................................12, 18
`
`Ubiquitous Connectivity, LP v. City of San Antonio,
`No. SA-18-CV-00718-XR, 2019 WL 4696421 (W.D. Tex. Sept. 26, 2019) ..........................30
`
`iii
`
`

`

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`
`Versata Dev. Grp. v. SAP Am., Inc.,
`793 F.3d 1306 (Fed. Cir. 2015)................................................................................................23
`
`Statutes
`
`35 U.S.C. § 101 ...................................................................................................................... passim
`
`Rules
`
`Fed. R. Civ. P. 8(a)(2) .....................................................................................................................3
`
`Fed. R. Civ. P. 12(b)(6).......................................................................................................... passim
`
`Fed. R. Civ. P. 12(c) .............................................................................................................. passim
`
`Fed. R. Civ. P. 15(a)(2) ..................................................................................................................30
`
`iv
`
`

`

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`
`I.
`
`INTRODUCTION
`
`OANDA Corporation’s First Amended Complaint (Dkt. 59 (“FAC”)) alleges that GAIN
`
`infringes two of its patents, U.S. Patents No. 7,146,336 (the ʼ336 Patent) and 8,392,311 (the ʼ311
`
`Patent). These patents claim systems and methods for online currency trading that improve upon
`
`prior art online currency trading. Though not required to do so, OANDA included numerous
`
`detailed factual allegations in the FAC to preempt a reflexive challenge to software-implemented
`
`patents under 35 U.S.C. § 101 (“Section 101”). Those extensive factual allegations detail why the
`
`claims are non-abstract, embody an inventive concept, and are thus patentable.
`
`Despite this, GAIN continues to wage a campaign to delay litigating OANDA’s claims by
`
`continually challenging OANDA’s patents without first engaging in discovery. After this action
`
`was filed, GAIN filed a petition for Covered Business Method (“CBM”) review before the Patent
`
`Trial and Appeals Board (“PTAB”), seeking to have the ’311 and ’336 patents (along with a third
`
`patent, not at issue in this lawsuit) invalidated under Section 101. The PTAB denied institution,
`
`determining that GAIN had mischaracterized the patents, having framed the claims too narrowly
`
`and in a way that bore little resemblance to the actual claim language. Despite that defeat, GAIN
`
`has proceeded to file a Rule 12(c) motion for judgment on the pleadings in this Court, contending
`
`yet again that the patents-at-issue are invalid under Section 101. This second invalidity challenge
`
`should meet the same fate.
`
`GAIN’s Rule 12(c) motion fails at the outset because it defies controlling Federal Circuit
`
`authority. The Federal Circuit has made clear in several recent decisions that a motion to dismiss
`
`on invalidity grounds cannot be granted when the complaint’s factual allegations raise a factual
`
`dispute about inventiveness. Remarkably, GAIN cites to none of that binding precedent, and
`
`proceeds to request dismissal of the FAC based on its contested view of the patents, while barely
`
`1
`
`

`

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`
`addressing OANDA’s factual allegations about patentability. GAIN’s entire motion thus exists in
`
`an alternative universe where trial courts are free to ignore factual allegations on a motion for
`
`judgment on the pleadings. Of course, that is not reality—courts must assume the truth of well-
`
`pled factual allegations at the pleading stage. Indeed, GAIN’s only engagement with the FAC’s
`
`factual allegations is to state in passing that they are conclusory, implausible, or untethered to the
`
`claim language. But that contention is itself conclusory, with GAIN providing no explanation of
`
`how the specific allegations in the FAC are insufficient to withstand dismissal. Because GAIN
`
`has provided this Court with no valid basis for refusing to accept OANDA’s validity allegations
`
`as true, the Court need go no further to deny the motion.
`
`Besides this fatal flaw, GAIN’s Section 101 argument also fails because, like the invalidity
`
`challenge before the PTAB, it relies on a mischaracterization of the patents’ claims. Applying the
`
`first step of the test under Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014) (“Alice”), GAIN
`
`describes OANDA’s patents as directed to abstract concepts such as “executing a financial trade
`
`based on user input,” or “making certain predefined calculations based on market and/or other
`
`inputs.” (Dkt. 69-1 (“Mot.”) at 15, 17.) But, as the FAC explains, the patents are instead directed
`
`to specific improvements to prior art online currency trading systems, such as disclosing methods
`
`for improving upon the traditional “three-way handshake” by teaching methods for executing
`
`trades at a defined time and price, and systems that provide for an interest rate manager that
`
`calculates interest on a tick-by-tick basis. (See, e.g., FAC ¶¶ 16-19, 32-34, 52.) While GAIN
`
`seemingly tries to shoehorn the claims here into case law that has granted Section 101 motions,
`
`their argument runs afoul of Federal Circuit holdings repeatedly warning against describing claims
`
`at too high a level of abstraction. As to step two of the Alice test, GAIN’s refusal to meaningfully
`
`engage with the allegations of the FAC means that it never actually addresses OANDA’s
`
`2
`
`

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`contentions as to why its patents are valid; instead, GAIN merely sets up and then responds to a
`
`number of straw-man arguments.
`
`Finally, GAIN baldly declares that the FAC’s supposed defects are incurable and that the
`
`Court should therefore dismiss without leave to amend. Even if GAIN’s arguments for dismissal
`
`had merit—they do not—the Motion articulates no valid basis for dismissal with prejudice. While
`
`OANDA has included ample detail in the FAC explaining as to how the claims here are patentable,
`
`going far beyond the short and plain statement required by Rule 8(a)(2), it could, if required by
`
`the Court, provide yet more factual support for the validity of these patents, including expert
`
`evidence. Failing to provide an opportunity to amend if the Court decides to grant the motion
`
`would thus be an abuse of discretion. GAIN’s Motion should be denied in its entirety.
`
`II.
`
`BACKGROUND
`
`A.
`
`OANDA’s Allegations About the Patents at Issue.
`
`OANDA, a market leader in currency data and currency trading, was founded in 1996 by
`
`Dr. Michael Stumm and Dr. Richard Olsen. (FAC ¶ 12.) In 2000, Dr. Stumm and Dr. Olsen had
`
`the idea to create an online automated trading platform, through which they could offer individual
`
`investors the more favorable rates banks used to trade currency among themselves. (Id. ¶ 17.)
`
`Prior to that, while OANDA had made accurate exchange rates more available to the public, banks
`
`and currency dealers charged consumers large spreads when trading currency. (Id.)
`
`While some online trading platforms existed at that time, they suffered from a number of
`
`deficiencies. (FAC ¶ 17.) In the then-existing online currency market, for example, a trade went
`
`through three steps from initiation to execution: (1) the trader specified to a dealer the “currency
`
`pair” (a price quote of the exchange rate for two different currencies traded in forex markets) and
`
`the amount that the trader would want to trade (without specifying whether he or she would like
`
`3
`
`

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`to buy or sell); (2) the dealer specified to the trader both a bid and an ask price and gave the trader
`
`several seconds to respond, in order to protect against price fluctuations (the dealer not knowing
`
`whether the trader would buy, sell, or reject the offer); and (3) the trader either rejected the offer
`
`or specified whether the trader was buying or selling (with his or her response having to occur
`
`within a timeframe of a few seconds). (Id.) This “three-way handshake” created problems,
`
`including that potential internet delays might not allow the trader to respond within the few-
`
`seconds window, and that corporate firewalls restricted the flow of information outside the
`
`corporate network. (Id. ¶ 18.)
`
`Dr. Stumm and Dr. Olsen used their combined expertise to invent systems and methods for
`
`online currency trading that overcame these and other deficiencies of then-existing online currency
`
`trading. (Id. ¶ 19.) Their inventions, for example, allowed for execution of online currency
`
`transactions with only two communications, instead of three, eliminated the previous problems
`
`with timing lags, and built in automated protections against price fluctuations. (Id.) Dr. Stumm
`
`and Dr. Olsen were granted patent protection on these novel systems and methods, including the
`
`’311 and ’336 Patents that are at issue in this lawsuit. (Id.)
`
`1.
`
`The ’311 Patent
`
`The ʼ311 Patent has seven claims. Claims 1 and 7 are independent. Claims 2-6 depend on
`
`claim 1 and add additional limitations. As the FAC explains,
`
`[e]ach of the claims of the ʼ311 Patent is inventive over the prior art,
`including but not limited to independent claims 1 and 7 and dependent
`claims 2-6. Specifically, the claims are non-abstract and embody an
`inventive concept at least because their claimed elements, combinations
`of elements, and the interactions between those elements, was not well-
`understood, routine, and conventional at the time of the application.
`(FAC ¶ 49.)
`
`4
`
`

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`The ʼ311 Patent teaches specific improvements to computerized currency trading systems.
`
`The ʼ311 Patent’s benefits include, but are not limited to, that its claimed teachings lessened or
`
`eliminated the problems of the “three-way handshake.” (FAC ¶¶ 17-19, 52.) By cutting out
`
`humans from certain parts of the process and having a client-server computer system transmit
`
`constantly updated exchange rates and prices, and constantly receive orders, the system provided
`
`more accurate pricing data than in prior art systems. This approach also greatly reduced the refusal
`
`of orders on account of the price changing while the trader was waiting for a response from a
`
`human. (Id. ¶ 52.)
`
`The invention claims methods that enabled an improved trading order that, for the first
`
`time, allowed the trader to control both the timing and the price of a trade. This type of trade is
`
`defined directly within the claims, as well as being enabled by the specification. First, claim
`
`elements 1(i) and 1(ii) of the ʼ311 Patent identify the requirement for real-time pricing (“current
`
`exchange rates”). (Dkt. 1-2 (“’311 Patent”) at 17:54-67.) The trading system server teaches
`
`“dynamically maintaining” currency prices and transmitting that real-time pricing directly to the
`
`trader’s Trade Station (“trading client system”):
`
`(i) at the trading system server, determining and dynamically
`maintaining a plurality of current exchange rates, each current exchange
`rate relating to a pair of currencies and including a first price to buy a first
`currency of the pair with respect to a second currency of the pair and a
`second price to sell the first currency of the pair with respect to the second
`currency of the pair;
`
`(ii) transmitting data from the trading system server to a trading client
`system, the transmitted data representing at least one current exchange
`rate at the time of the transmission;
`
`(’311 Patent at 17:57-67 (Claim 1) (emphasis added).)
`
`Once real-time pricing has been established and is transmitted to the trader’s Trade Station,
`
`the trader can use that current pricing information to issue a trade request. Claim elements 1(iv)
`
`5
`
`

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`and (v) identify that the trader selects a currency pair and transmits a trade request to the server for
`
`immediate execution. The trader must specify a price (“requested trade price”) that is needed to
`
`effect the trade:
`
`(iv) at the trading client system, accepting input from the user identifying
`a pair of currencies the user desires to trade, an amount of at least one
`currency of the pair desired to be traded and a requested trade price at
`which it is desired to effect the trade;
`
`(v) transmitting the accepted input from the trading client system to the
`trading system server;
`
`(’311 Patent at 18:4-10 (Claim 1) (emphasis added).)
`
`The trading system server then compares the requested trading price with the current
`
`market price (“current exchange rate at the time”). If the requested price is equal to or better than
`
`the current market price that trade is immediately executed; otherwise, it is rejected:
`
`(vi) at the trading system server, comparing the requested trade price to
`the respective first price or second price of the corresponding current
`exchange rate at that time and, if the respective first price or second price
`of the corresponding current exchange rate at that time is equal to or better
`than the requested trade price, effecting the trade at the corresponding
`respective current exchange rate first price or second price and if the
`corresponding current exchange rate is worse than the requested trade
`price, refusing the trade;
`
`(’311 Patent at 18:11-20 (Claim 1) (emphasis added).)
`
`By providing for transmission of dynamically maintained current exchange rates (i.e., real-
`
`time pricing) and immediate trade execution, the invention disclosed by the ’311 Patent thus
`
`facilitated a new order type. Rather than the three-step process for trades in the then-existing
`
`online currency market, the ’311 Patent provided for a method to execute currency transactions
`
`over a computer network with only two steps, eliminating the previous problems with timing lags
`
`and building in automated protections against price fluctuations. (FAC ¶ 52.)
`
`6
`
`

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`2.
`
`The ʼ336 Patent.
`
`The ʼ336 Patent has 11 claims. Claims 1-5, 7, and 11 are independent. Claims 6 and 8-10
`
`are dependent and add additional limitations. As the FAC explains,
`
`[e]ach of the claims of the ʼ336 Patent is inventive over the prior art,
`including but not limited to independent claims 1-5, 7, and 11, and
`dependent claims 6 and 8-10. Specifically, the claims are non-abstract and
`embody an inventive concept at least because their claimed elements,
`combinations of elements, and the interactions between those elements
`was not well-understood, routine, and conventional at the time of the
`application.
`
`(FAC ¶ 29.)
`
`The ʼ336 Patent teaches specific improvements to computerized currency trading systems.
`
`The ʼ336 Patent’s benefits over the prior art include that its claimed teachings lessened or
`
`eliminated the problems of, among other things, paying and collecting interest, and executing
`
`stored orders, as discussed in the specification. (FAC ¶ 32.) The claimed inventions overcame
`
`these problems at least because, by having a computerized interest rate manager calculate, pay out,
`
`and collect interest on a tick-by-tick basis, or by having a trade manager check stored orders, more
`
`accurate and comprehensive trades and payments of interest (e.g., “rollover”) can be accomplished
`
`than is possible with human beings involved. (Id.) In this respect, the claimed systems make it
`
`both quantitatively and qualitatively different from what can be accomplished by humans, teams
`
`of humans, or the prior art systems. (Id.)
`
`For example, the computerized interest rate managers claimed by the ʼ336 Patent enable
`
`accurate payment and collection of interest, even on small positions, which would have been
`
`impossible and unprofitable to calculate using humans, and which was not possible with prior art
`
`systems. (Id. ¶ 33.) Similarly, the computerized trade manager claimed by the ʼ336 Patent makes
`
`tracking and execution of varied and complex stored orders (e.g., stop loss, take profit, and limit)
`
`7
`
`

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`possible, in real time, with an accuracy that would be impossible for humans to attain, and that
`
`was not achievable with prior art systems, because of the challenges of simultaneously monitoring
`
`the high frequency of price movements, receiving and inputting orders from traders, comparing
`
`the current prices against the stored orders, and reporting the execution back to the traders. (Id.)
`
`Claims 1-5 of the ’336 Patent include various inventions, enabled by the specification,
`
`which add commercially valuable features to a trading system server. These features include an
`
`“interest rate manager” (Cl. 1), a “stop-loss order daemon” (Cl. 2), a “take-profit daemon” (Cl. 3),
`
`a “limit-order daemon” (Cl. 4), and a “pricing engine in communication with [a] rate server” (Cl.
`
`5). In Claim 5, for example, by using a “pricing engine”, a trading system server can incorporate
`
`external rate sources as well as market directional movement and volatility. Other optional
`
`features of the pricing engine are described in the specification:
`
`Over time, the Trading System will accumulate an imbalance in its
`currency portfolio and, at times, it will need to neutralize its risk exposure
`to adverse currency fluctuations. The Trading System Pricing Engine can
`influence its exposure by setting its price quotes accordingly. Moreover,
`it can close out its positions periodically or take hedging positions by
`executing larger trades through its Partners.
`
`(’336 Patent at 5:35-41.)
`
`The ’336 Patent also teaches and claims a “hedging engine,” which provides useful features
`
`to the trading system operator for maintaining desired exposure and capital balances. As the
`
`specification and the claim provides,
`
`[t]his module continuously monitors current Trading System currency
`positions, the positions held in the trader accounts, recent trading activity,
`and the market direction and volatility to determine when to issue a trade
`with the backend Partner Bank.
`
`(’336 Patent at 9:20-23.)
`
`said hedging engine is operable to perform at least two of the following
`calculations: (a) calculate a total amount of home currency appearing in
`
`8
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`

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`all open positions; (b) calculate an out-of-equilibrium exposure; (c)
`calculate a new potential net exposure; (d) calculate an equilibrium
`position; (e) calculate boundaries of possible exposures; (f) calculate
`values for a pair of quoting functions; and (g) calculate an average price
`and an average spread.
`
`(’336 Patent at 20:1-13 (Claim 7).)
`
`In addition, the “margin control manager” of Claim 11 allows brokers to automatically
`
`catch traders or accounts who are operating outside their margin limits and automatically liquidate
`
`their holdings in real time. (FAC ¶ 34.) This protects the broker from the credit risk of positions
`
`held in accounts on margin that are overrunning their margin limits. (Id.)
`
`B.
`
`The PTAB’s Decision Denying Institution of CBM Review.
`
`This Rule 12(c) motion represents GAIN’s second attempt to invalidate the ’311 and ’336
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`patents under Section 101. GAIN previously filed a petition for CBM review, seeking to invalidate
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`both patents on the basis that they were directed to the abstract idea of currency trading, and
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`therefore were addressed to patent-ineligible subject matter. After GAIN repeatedly informed this
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`Court that it was very likely to prevail in this effort (see, e.g., Dkt. 34-1), the PTAB denied
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`institution. (Dkt. 48-1; 48-2.) The PTAB held that GAIN had construed the claims of the patents
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`too narrowly, and that the claims were not directed merely to “currency trading,” as GAIN had
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`argued. (Dkt. 48-1 at 24-27.) In addition to rejecting the mere breadth of GAIN’s alleged abstract
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`idea, the PTAB also determined that GAIN’s “arguments are deficient because they do not
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`adequately tie the alleged abstract idea to the language of the claim[s].” (Id. at 27.)
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`The PTAB’s ruling was a complete defeat for GAIN. Remarkably, GAIN now tries
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`throughout its Rule 12(c) motion to recast this loss as some kind of victory. Even though the
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`PTAB’s institution decision has no estoppel effect—which GAIN itself acknowledges and is the
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`reason it gets a second bite at the apple on its invalidity arguments in this Court—GAIN
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`nonetheless tries to portray one element of the PTAB’s ruling as “[i]mportant[]” here. (Mot. At
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`10.) GAIN contends that because the PTAB concluded that the ’311 and ’336 patents did not
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`disclose a “technological feature,” that should have some bearing on the invalidity determination
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`in this Rule 12(c) motion. (Id.) Far from being “important,” that portion of the PTAB ruling has
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`no discernible relevance here. Because patents that disclose a “technological invention” are
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`exempt from CBM review, the PTAB had to make that threshold determination prior to rejecting
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`GAIN’s arguments on the merits. (Dkt. 48-1 at 13-17; 48-2 at 10-15.) To hold that a patent claims
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`a “technological invention,” the PTAB must find that the claimed subject matter both “[(1)] recites
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`a technological feature that is novel and unobvious over the prior art; and [(2)] solves a technical
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`problem using a technical solution.” (Id.) Here, the PTAB concluded that a single claim of each
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`patent did not recite a “technological feature,” and having found that the first prong was not
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`satisfied, it ended the inquiry and concluded that the exception to CBM review did not apply. (Id.)
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`As such, the PTAB expressly declined to address whether the patents solved a technical problem
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`using a technical solution. (Id.) That is the sum total of the PTAB’s analysis, and GAIN provides
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`no coherent explanation as to why or how the PTAB decision should have a bearing on this Court’s
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`Rule 12(c) ruling.
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`III.
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`ARGUMENT
`GAIN’s Motion is flawed for multiple, independent reasons. First, ignoring the appropriate
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`standard for analyzing a Section 101 motion at the pleading stage, GAIN fails to explain how or
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`why OANDA’s inventiveness allegations are insufficient. Merely labeling allegations as
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`“conclusory” and “boilerplate” does not make them so—as explained in this Motion, OANDA
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`included detailed allegations sufficient to withstand a challenge at this stage. Second, GAIN’s
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`Alice analysis is flawed at both steps because it improperly asks the Court to accept its own
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`interpretation of the patents’ claims over the patents’ language and the FAC’s allegations. When
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`analyzed properly, the ’311 and ’336 Patents cannot be found to be directed to abstract ideas and
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`even if they could, they both disclose inventive concepts sufficient to satisfy the Alice test.
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`A.
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`GAIN’s Failure to Meaningfully Address OANDA’s Inventiveness
`Allegations is Fatal to Its Motion.
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`GAIN contends that all of the claims in both patents at issue are invalid under Section 101.1
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`(Mot. at 14-27.) According to GAIN, this Court “can and should” make the Section 101 eligibility
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`determination on a Rule 12(c) motion without the opportunity for fact or expert discovery. (Id. at
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`12.) What GAIN neglects to mention, however, is that recent caselaw has clarified critical
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`limitations on a court’s power to grant such motions. The Federal Circuit has stated that, although
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`patent eligibility is ultimately a question of law, there are “underlying factual questions” to the
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`Section 101 inquiry. Berkheimer v. HP Inc., 881 F.3d 1360, 1369 (Fed. Cir. 2018). For example,
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`in step two of the Alice inquiry, “[w]hether something is well-understood, routine, and
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`conventional to a skilled artisan at the time of the patent is a factual determination.” Id.
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`Accordingly, a Rule 12(b)(6) motion challenging patent eligibility under Section 101 may be
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`granted “only when there are no factual allegations that, taken as true, prevent resolving the