UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`TD AMERITRADE HOLDING CORPORATION, TD AMERITRADE, INC.,
`AND TD AMERITRADE ONLINE HOLDINGS CORP.
`
`PETITIONERS
`
`V.
`
`TRADING TECHNOLOGIES INTERNATIONAL, INC.
`
`Patent Owner
`
`Patent NO. 7,676,411
`
`
`DECLARATION OF KENDYL A. ROMAN
`
`IN SUPPORT OF PETITION FOR
`
`COVERED BUSINESS METHOD REVIEW OF US. PATENT 7,676,411
`
`TDA 1019
`
`CBM 0fU.S. Pat. NO. 7,676.411
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`TD AMERITRADE HOLDING CORPORATION, TD AMERITRADE, INC.,
`AND TD AMERITRADE ONLINE HOLDINGS CORP.
`
`PETITIONERS
`
`V.
`
`TRADING TECHNOLOGIES INTERNATIONAL, INC.
`
`Patent Owner
`
`Patent NO. 7,676,411
`
`
`DECLARATION OF KENDYL A. ROMAN
`
`IN SUPPORT OF PETITION FOR
`
`COVERED BUSINESS METHOD REVIEW OF US. PATENT 7,676,411
`
`TDA 1019
`
`CBM 0fU.S. Pat. NO. 7,676.411
`
`
`
`I, Kendyl A. Roman, declare as follows:
`
`1.
`
`I have been engaged by Sterne, Kessler, Goldstein & Fox P.L.L.C. on
`
`behalf of Petitioners, TD Ameritrade Holding Corporation, TD Ameritrade, Inc.,
`
`and TD Ameritrade Online Holdings Corp. (“Petitioners”) for the above-captioned
`
`covered business method review proceeding.
`
`I understand that this proceeding
`
`involves United States Patent 7,676,411, entitled “Click based trading with
`
`intuitive grid display of market depth,” by Gary Allan Kemp, II, filed October 25,
`
`2006 and issued March 9, 2010, (the “’411 Patent”).
`
`I understand that the ’411
`
`Patent is currently assigned to Trading Technologies International, Inc. (“TTI”).
`
`2.
`
`I understand the ’411 Patent claims benefit from US. provisional
`
`application 60/186,322. For purposes of the covered business method review, I
`
`assume the earliest possible priority date of the ’411 Patent is the March 2, 2000
`
`filing date of US. provisional application 60/186,322.
`
`3.
`
`I have reviewed and am familiar with the specification of the ’411
`
`Patent.
`
`I understand that the ’411 Patent has been provided as Exhibit 1001.
`
`I will
`
`cite to the specification using the following format (’411 Patent, 1:1-10). This
`
`example citation points to the ’411 Patent specification at column 1, lines l-10.
`
`4.
`
`I have reviewed and am familiar with the file history of the ’411
`
`Patent.
`
`I understand that the file history has been provided as Exhibit 1002.
`
`-2-
`
`
`
`5.
`
`I have also reviewed and am familiar with the following prior art used
`
`in the Petition for Covered Business Method Review of the ’411 Patent:
`
`6 U.S. Patent No. 5,077,665 to Silverman et al. (“Silverman”).
`
`I
`
`understand that Silverman has been provided as Exhibit 1003.
`
`i U.S. Patent No. 5,297,031 to Gutterman et a1. (“Gutterman”).
`
`I
`
`understand that Gutterman has been provided as Exhibit 1004.
`
`i U.S. Patent No. 5,375,055 to Togher et
`
`a1.
`
`(“Togher”).
`
`I
`
`understand that Silverman has been provided as Exhibit 1005.
`
`a A certified translation of “System for Buying and Selling Futures
`
`and Options Transaction Terminal Operational Guidelines”
`
`(“TSE”). A understand that
`
`the original Japanese language
`
`document was provided as Exhibit 1006, the certified translation
`
`provided as Exhibit 1007, and the certification of translation
`
`provided as Exhibit 1008.
`
`6.
`
`A complete listing of additional materials considered and relied upon
`
`in preparation of my declaration is provided as Exhibit 1020.
`
`I have relied on
`
`these materials to varying degrees. Citations to these materials that appear below
`
`are meant to be exemplary but not exhaustive.
`
`
`
`7.
`
`The ’411 Patent describes click based trading with intuitive grid
`
`display of market depth.
`
`(’411 Patent, Title.) I am familiar with the technology
`
`described in the ’4ll Patent as of the earliest possible priority date of the ’411
`
`Patent (March 2, 2000).
`
`8.
`
`I have been asked to provide my technical review, analysis, insights
`
`and opinions regarding the ’411 Patent and the above-noted references that form
`
`the basis for the grounds of unpatentability set forth in the petition for Covered
`
`Business Method Review of the ’411 Patent.
`
`I.
`
`QUALIFICATIONS
`
`9.
`
`See my Curriculum Vitae provided as Exhibit 1020 for a listing of my
`
`qualifications. This includes a list of publications for the past 10 years or more.
`
`10. My expertise qualifies me to do the type of analysis required in this
`
`case. Of particular relevance, I have been involved in the design, implementation,
`
`testing, and analysis of computer software, firmware, and hardware for over thirty
`
`years, including software architecture, graphical user interfaces, trading systems,
`
`and other networked, data-driven, client-server systems. My work has included
`
`analysis of trading systems including source code and user interfaces. In addition, I
`
`have practical experience in the design and programming of a variety of computer
`
`
`
`systems ranging from handheld devices, to laptops and desktop computers, to large
`
`multi-layer networked database systems.
`
`11.
`
`As a freshman at Brigham Young University (“BY ”) in 1976, I
`
`started writing programs for IBM computers.
`
`12.
`
`In 1980, I worked with Apple II computers and wrote computer
`
`programs having graphic user interfaces.
`
`13.
`
`In the late 1960’s and 1970’s the University of Utah was known for its
`
`pioneering work in computer graphics (and the Internet‘). At BYU, I got involved
`
`with computer graphics and wrote graphics programs. Many of my BYU
`
`professors had been at the University of Utah during its computer science
`
`pioneering years. One of my BYU professors, Alan Ashton, and a fellow
`
`computer science student, Bruce Bastian, worked together on word processing
`
`software with graphical display. Later, Professor Ashton and Bruce Bastian
`
`founded WordPerfect.
`
`14.
`
`I graduated with High Honors from Brigham Young University where
`
`I received a Bachelor of Science degree in Computer Science. My formal studies
`
`
`1 In 1969, University of Utah was one of the first four nodes on the Internet.
`
`
`
`included computer architecture, computer programming, programming languages,
`
`algorithms, operating systems, database systems, and digital logic design.
`
`15.
`
`In 1981, I worked at International Business Machines (“IBM”) in San
`
`Jose, CA. At IBM, I had a graphics display on my desk and wrote programs that
`
`displayed custom graphics. During my employment at IBM, the IBM PC was
`
`released. The IBM PC also supported graphical user interfaces.
`
`16.
`
`In 1982, at Dialogic, I improved the performance of the Computer
`
`Aided Design (“CAD”) software.2 The CAD software drew polygons on the
`
`graphical display and placed them along value axes.
`
`17.
`
`In this timeframe, I had experience with Tandy computers, including
`
`the TRS—80, and with Commodore VIC 20 computers, which supported graphical
`
`user interfaces.
`
`18.
`
`In 1984, I startng writing programs for the Apple Lisa and
`
`Macintosh, which had a sophistical graphical user interface built into the firmware
`
`and operating system. Both Lisa and Macintosh used a one-button mouse as a
`
`2 The software, the Lucas Drawing System, had been developed by Lucas
`
`Films to aid in the production Star Wars.
`
`
`
`pointing device. The user controls various operations by clicking, double clicking,
`
`or dragging the mouse. Such operations are affected by release the mouse button.
`
`For example, a mouse click is defined by the release of a mouse button within a set
`
`number of pixels from where it was depressed. A double click is defined by the
`
`second release when clicking twice. Likewise, a click and drag is depressing the
`
`button to select the item, and releasing the mouse button to release it at the desired
`
`location or value.
`
`19.
`
`I developed a Macintosh program that drew graphical icons (or
`
`polygons) on the display.3 The icons changed size base on a numerical value. The
`
`user interface allowed for a window to be displayed that showed the numerical
`
`value as text.
`
`
`
`3 An article regarding the software was published in MacWorld Magazine
`
`around February 1987. A review was published in 1990 by the Boston Computer
`
`Society, which also showed various features of the user interface. See
`
`http ://www.wolfpup.org/miscflVIacB aby_Math_review.pdf.
`
`
`
`20. Next in 1986, I started consulting at Hewlett Packard (“HP”) where I
`
`became familiar with standard printer description languages and graphic command
`
`languages. During this time I used X-Windows.
`
`21.
`
`Later, in 1988 through 1990, at Tandem (now Compaq, now HP), I
`
`worked with CAD systems and hardware simulators, which used graphical user
`
`interfaces and included pop-up windows that provided textual representations of
`
`values related to graphical displays.
`
`22.
`
`In 1990, I authored portions of the Macintosh Programming
`
`Fundamentals: Self-paced Training course interactive CD-ROM and lab book.
`
`23.
`
`I returned to HP in 1991 where I worked with diagnostic tools,
`
`including exercises and verifiers. During this period, I was involved in testing
`
`various graphics adapters and display devices throughout the HP product line.
`
`I
`
`worked with a X-Windows based diagnostic tool that displayed an icon for every
`
`component of the system. The number, type, and locations of the icons were based
`
`on the components actually found in the system. The icons were dynamically
`
`changed to represent the status of the testing.
`
`24.
`
`In 1991 and 1992, at Slate and Apple, I worked with the pen based
`
`tablets and handheld computers including, the NCR tablet and Newton PDA.
`
`
`
`25.
`
`In 1993 and 1994, I taught classes for Mentor Graphics to hardware
`
`designers regarding hardware simulation and design verification software. Mentor
`
`Graphics’ CAD system had the features discussed above regarding CAD software.
`
`In addition, I taught users how to customize CAD software to perform complex
`
`custom operations based on a single action with a user input device.
`
`26.
`
`In 1993 and 1994, at Apple I worked with the Apple Media Tool team
`
`and the SK8 team, which included working with state of the art graphic display
`
`systems.
`
`27.
`
`In the early 1990s, before the World Wide Web became
`
`commercialized, multimedia technology was becoming state of the art. During this
`
`time, interactive CD—ROMs, early commercial Internet sites, high-resolution color
`
`animation, and digital video were state of the art technologies. While at The Carl
`
`Group, I formed the Multimedia Lab. Projects included porting a program to
`
`automate layout of ball grid assemblies (BGA), updating automatic test equipment
`
`software to use state of the art graphical user interfaces, developing graphic
`
`animations, developing multimedia authoring tools and various interactive CD—
`
`ROM titles. My work with multimedia authoring tools included developing low—
`
`level graphics software for both the Macintosh and IBM PC platforms.
`
`
`
`28. We sold our multimedia authoring tools to the public and I developed
`
`an interactive user interface, which allowed users to enter and confirm information
`
`including prices and quantities, which resulted in an order being sent to our server.
`
`29. Also in the mid-1990s, we developed a database driven, on-demand
`
`catalog publish system for Sun, which allowed users to configure and order
`
`products on via a graphical user interface. At Sun, I used workstations using Open
`
`Look, which was a graphical user interface based on pioneering work at Xerox
`
`PARC, and which was competitive with X Windows which was being used by
`
`Hewlett Packard.
`
`30.
`
`In the mid-1990s, I developed a medical communications device that
`
`could transmit medical quality video images over the Internet in real time. This
`
`work included developing various graphical user interfaces.
`
`I have patents on
`
`some of this technology as discussed below.
`
`31. During this time, I was familiar with the graphical user interfaces in
`
`various medical devices. These included EKG, ultrasound, and medical records
`
`systems.
`
`32.
`
`In many of these professional assignments, I analyzed the
`
`architecture, function, and operation of software with graphical user interfaces.
`
`-10-
`
`
`
`33.
`
`Prior to being retained in this matter, I have acquired and performed
`
`forensic analysis of several computer systems. In particular, in 1999-2002, I
`
`performed the technical analysis of both copyright and trade secrets in the
`
`Tradescape. com, Inc, et a]. v. Shivaram, er 011. cases. In those cases, I reviewed the
`
`source code and operations of the market-leading day trading systems and illicit
`
`copies.
`
`I also surveyed the current state of the art to address the trade secrets
`
`versus what was publicly known. Tradescape was later acquired by E*Trade.
`
`34.
`
`As part of my review of the operations in the Tradescape engagement,
`
`I personally observered day traders conducting tens of thousands of dollars of
`
`transactions within seconds. For example, I observered one trader buy 10,000
`
`shares of stock and then immediately buy another 10,000 shares using the same
`
`default quantity (128., 10,000) within two seconds. Then, this same trader sold all
`
`20,000 shares at a substantial profit less than a minute later.
`
`35.
`
`I worked on the Datamize v. Fidelity, Scottrade, Interactive Brokers
`
`Group, et a1. patent case, which involved user interfaces used by the defendants in
`
`their trading software.
`
`36.
`
`I performed a code review for a patent case, Chicago Board Options
`
`Exchange v. International Securities Exchange, which involved security exchange
`
`trading software.
`
`-11-
`
`
`
`37.
`
`Further, I have extensive experience in designing, developing and
`
`analyzing database, networked systems and their user interfaces. As a result, I
`
`have had access to the type of components and information at issue in this case and
`
`have contemporaneous knowledge of what was publicly known.
`
`38. My Curriculum Vitae identifies over 60 issued patents and over 60
`
`published patent applications for which I am listed as an inventor or assignee.
`
`Several of my inventions include graphical user interfaces and networked client-
`
`server systems, these include:
`
`1' US. 8,590,777, Space equipment recognition and control using
`
`handheld devices
`
`1* US. 8,500,563, Display, device, method, and computer program
`
`for indicating a clear shot
`
`3 US. 8,282,493, Display, device, method, and computer program
`
`for indicating a clear shot
`
`i US. 7,698,653, Graphical user interface including zoom control
`
`box representing image and magnification of displayed image
`
`at US. 7,424,473, System and method for asset tracking with
`
`organization-property—individual model
`
`-12-
`
`
`
`a: US. 7,257,158, System for transmitting video images over a
`
`computer network to a remote receiver
`
`a; US. 7,191,462, System for transmitting video images over a
`
`computer network to a remote receiver
`
`it US. 6,803,931, Graphical user interface including zoom control
`
`box representing image and magnification of displayed image
`
`39.
`
`I have reviewed and analyzed numerous patents and prior art systems
`
`through my litigation support work, including patents and prior art related to the
`
`architecture and operation of computer systems including graphics.
`
`I have taken a
`
`number of courses offered by the US. Patent and Trademark Office and the
`
`Sunnyvale Center for Innovation, Inventions, and Ideas (Sc[i]3).
`
`40.
`
`Both Federal and State Courts have recognized me as an expert in
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`computer software including trading systems and graphical user interfaces,
`
`computer architecture, computer hardware, database systems, networks, and
`
`computer forensic science.
`
`41.
`
`In addition, I recently served as a Special Master in a Federal District
`
`Court in Paycom Payroll, LLC v. Richison and Period Financial, which included
`
`financial systems with graphical user interfaces.
`
`I have served as a court—appointed
`
`-13-
`
`
`
`expert in San Jose, CA, in Aspect Communications Corporation v. eConvergent,
`
`Inc. et al., which included financial systems with graphical user interfaces, and in
`
`Ribeiro v. Weichselbaumer, which included financial and graphical analysis.
`
`A.
`
`Testifying Engagements
`
`42.
`
`Cases in which I have testified as an expert witness at trial or by
`
`deposition during the previous four years are identified as:
`
`Eastern District of Virginia, Alexandria, l:l l-CV—01203,
`
`Reporting Technologies, Inc. v. Emma, Inc.
`
`Central District of California, Los Angeles, 2:10—cv-07678,
`
`Futurelogic, Inc. v. Nanoptix, Inc.
`
`Southern District of Texas, Houston, 3 :08—CV-l l9,
`
`Wellogix v. Accenture
`
`Northern District of California, San Jose, 09—cv-Ol808,
`
`Embry v. Acer America
`
`Southern District of Texas, Houston, 4:09-CV-1511,
`
`Wellogix v. BP
`
`43. Also the following is the case identification of the cases where I have
`
`provided recent reports or declarations but have not testified:
`
`a District of Minnesota, 12—cv—l357, Twin City Fan Companies, Ltd. V.
`
`FPT Software
`
`-14-
`
`
`
`i Superior Court of California, Riverside County, Indio, INC 1108128,
`
`Malanche V. Eisenhower Medical Center
`
`1 Central District of California, Western Division, 2:12-cv-05257,
`
`Innersvingen AS V. Sports Hoop, Inc
`
`1! Western District of Oklahoma, O9—cv-488, Paycom Payroll, LLC V.
`
`Richison and Period Financial Corporation
`
`44.
`
`Some additional prior cases related to software interfaces, graphics,
`
`and patent analysis, include: Konrad v. General Motors, et al.; ACTV, Inc. and
`
`HyperTVNetworks, Inc. v. The Walt Disney Co., ABC, Inc. and ESPN, Inc; and
`
`Collaboration Properties v. Polycom.
`
`45.
`
`In Konrad v. General Motors, et al., I analyzed the source code and
`
`operation of data—driven web sites for many of the largest companies in America.
`
`The graphical user interfaces displayed current quantity and pricing, and allowed
`
`order placement and confirmation for airline seats, rental cars, and hotel rooms.
`
`Many of these systems allowed for available commodities to be display in order of
`
`price or other values.
`
`46.
`
`In ACTV v. Disney, I analyzed the Disney (ABC and ESPN)
`
`interactive television system that included an interactive graphical user interface.
`
`
`
`47.
`
`In Collaboration Properties v. Polycom, I analyzed video
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`conferencing systems including telephony and graphics output systems and
`
`standards.
`
`48. My Curriculum Vitae contains further details on my education,
`
`experience, publications, and other qualifications to render an expert opinion. My
`
`work on this case is being billed at a rate of $495.00 per hour, with reimbursement
`
`for actual expenses. My compensation is not contingent upon the outcome of this
`
`covered business method review or the litigation involving the ‘411 Patent.
`
`11. MY UNDERSTANDING (3F CLAIM CONSTRUCTION
`
`49.
`
`I understand that, during a covered business method review, claims
`
`are to be given their broadest reasonable construction in light of the specification
`
`as would be read by a person of ordinary skill in the relevant art.
`
`1.
`
`MY UNDERSTANDING OF OBVIOUSNESS
`
`50.
`
`I am not a lawyer and will not provide any legal opinions. Although I
`
`am not a lawyer, I have been advised certain legal standards are to be applied by
`
`-16-
`
`
`
`technical experts in forming opinions regarding meaning and validity of patent
`
`-
`clalms.
`
`4
`
`51.
`
`I understand that a patent claim is invalid if the claimed invention
`
`would have been obvious to a person of ordinary skill in the field at the time of the
`
`purported invention, which is often considered the time the application was filed.
`
`This means that even if all of the requirements of the claim cannot be found in a
`
`single prior art reference that would anticipate the claim, the claim can still be
`
`invalid.
`
`52.
`
`As part of this inquiry, I have been asked to consider the level of
`
`ordinary skill in the field that someone would have had at the time the claimed
`
`invention was made. In deciding the Ievel of ordinary skill, I considered the
`
`following:
`
`i
`
`¥
`
`the levels of education and experience of persons working in the field;
`
`the types of problems encountered in the field; and
`
`
`
`4 I have relied on the Federal Circuit Bar Association Model Patent Jury
`
`Instructions, February 18, 2010, as well as my own experience regarding cited
`
`cases.
`
`-17-
`
`
`
`t
`
`the sophistication of the technology.
`
`53.
`
`To obtain a patent, a claimed invention must have, as of the priority
`
`date, been nonobvious in view of the prior art in the field. I understand that an
`
`invention is obvious when the differences between the subject matter sought to be
`
`patented and the prior art are such that the subject matter as a whole would have
`
`been obvious at the time the invention was made to a person having ordinary skill
`
`in the art.
`
`54.
`
`I understand that to prove that prior art or a combination of prior art
`
`renders a patent obvious, it is necessary to (1) identify the particular references
`
`that, singly or in combination, make the patent obvious; (2) specifically identify
`
`which elements of the patent claim appear in each of the asserted references; and
`
`(3) explain how the prior art references could have been combined in order to
`
`create the inventions claimed in the asserted claim.
`
`55.
`
`I understand that certain objective indicia can be important evidence
`
`regarding whether a patent is obvious or nonobvious. Such indicia include:
`
`commercial success of products covered by the patent claims; a long—felt need for
`
`the invention; failed attempts by others to make the invention; copying of the
`
`invention by others in the field; unexpected results achieved by the invention as
`
`compared to the closest prior art; praise of the invention by the infringer or others
`
`-18-
`
`
`
`in the field; the taking of licenses under the patent by others; expressions of
`
`surprise by experts and those skilled in the art at the making of the invention; and
`
`the patentee proceeded contrary to the accepted wisdom of the prior art.
`
`III. LEVEL OF ORDINARY SKILL IN THE ART
`
`56.
`
`One of ordinary skill in the art at the time of the alleged invention,
`
`would have had the equivalent of a Bachelor’s degree or higher in computer
`
`science and at least 2 years working experience designing graphical user interfaces,
`
`and direct or indirect experience with trading or related systems.
`
`IV. BACKGROUND OF THE TECHNOLOGIES BISCLOSED IN THE
`
`’411 PATENT
`
`A.
`
`Computer Hardware, Software, and Firmware
`
`57. Originally, computers were composed only of physical circuits,
`
`known as hardware,5 that were programmed by physically configuring wires (like a
`
`telephone switch board operator). Computer programs (a series of computer
`
`
`
`5 Hardware is the tangible components of a computing system, such as
`
`vacuum tubes, wires, circuit boards and other discrete components.
`
`-19_
`
`
`
`instructions) stored in memory are known as software,6 because they can be
`
`modified much more easily than hardware. In the late 1970s, personal computers
`
`(PCs) became commercial products (such as the Apple II in 1977). In some PCS, a
`
`bootstrap loader and other basic input and output programs were permanently
`
`stored in hardware chips, known as read-only—memories (“ROM”). These
`
`programs recorded indelibly in ROM were no longer “soft” enough to be modified,
`
`but could be changed by replacing one socketed ROM with another ROM
`
`containing another version of the program. Because they are intimately bonded
`
`with the hardware, these programs are called firmware.7
`
`
`
`6 Software is a “generic term for those components of a computer system
`
`that are intangible rather than physical. It is most commonly used to refer to the
`
`programs executed by a computer system as distinct from the physical hardware of
`
`that computer system, and to encompass both symbolic and executable forms for
`
`such programs.” (Oxford Dictionary ‘software’)
`
`7 Generally, firmware refers to CPU instructions stored in a programmable
`
`ROM.
`
`-20-
`
`
`
`A.
`
`Input/Output Adapters and User Input Devices
`
`58.
`
`In addition to the CPU and main memory, a computer usually has
`
`various input and output (or I/O) devices.
`
`l/O devices include disks, tapes,
`
`keyboards and other input devices, displays, printers, and communications devices.
`
`Disks and tapes are also known as memory or storage, and (as discussed above) are
`
`distinguished from main memory by the term “secondary memory.” Other input
`
`devices include mice, pens, tablets, touch pads, touch screens, and cameras.
`
`B.
`
`Display, Pixel, and Video Frame
`
`59. When Philo T. Farnsworth invented electronic television in the late
`
`1920’s, he modified a vacuum tube to control the movement of an electron beam
`
`from the cathode (the negative terminal) on the back the tube to scan across the
`
`screen on the other side of the tube (the anode, or positive terminal). Where the
`
`beam hits the glass (and coating of phosphors) the glass glows. Magnetic coils
`
`deflect the electron beam. In television, the entire front of the tube is scanned
`
`repetitively in a fixed pattern called a raster. The intensity of the electron beam is
`
`modified to change the brightness on point along the raster scan. The result points
`
`on the screen are called picture elements, or “pixels.”
`
`60.
`
`In the United States the National Television System Committee
`
`(“NTSC”) standard defines a raster of 525 scan lines, which refresh at 30 times a
`
`-21-
`
`
`
`second. Each time the Video screen is refreshed the contents is a frame of video
`
`data. The frame is interlaced with odd and even line fields with a field changing
`
`60 times a second. The NTSC standard also set a 4:3 aspect ratio. Even though
`
`there are 525 lines, the visible area is generally 480 lines high which results in an
`
`array of pixels which 640 pixels wide, or 640 x 480 pixel resolution.
`
`C.
`
`Bits, Bitmaps, Pixmaps, and Graphic Images
`
`61.
`
`A binary digit (“bit”) can have a value of zero (0) or one (1).
`
`Computer digital logic uses zero to represent “false” and one to represent “true”,
`
`thus 0 is false and 1 is true.
`
`62.
`
`A bit map originally was a data structure having one bit for each
`
`pixel.8 This are now referred to as Black and White (“B&W”) bitmaps, or two
`
`
`
`8 In 1984, when the Apple Macintosh was released, it had a black and white
`
`screen and its screen buffer was a true bitmap, named screenBits, in a special
`
`location in main memory. “The Macintosh screen itself is one large visible bit
`
`image. The upper 21,888 bytes of memory are displayed as a matrix of 175,104
`
`pixels on the screen, each bit corresponding to one pixel. . .The screen is 342 pixels
`
`tall and 512 pixels wide” (Inside Macintosh, Promotional Edition, p. 12).
`
`-22-
`
`
`
`color bitmaps. A one would turn on the electron beam for that pixel and a zero
`
`would turn off the electron beam. A bitmap could be created to define a character.
`
`For example, in CGA a character was defined as an 8x8 bitmap.
`
`63.
`
`The same concept was applied to create a color bitmap, or pixel map
`
`(“pixmap”) where more than one bit represents the color for each pixel. Like
`
`B&W bitmaps, a color bitmap is a consecutive array of pixel data, where there
`
`more than one bit makes up the array elements. In some contexts, the term bitmap
`
`is used to refer to pixmaps, as well as B&W bitmaps.
`
`64.
`
`A bitmap can also be used to store a graphic image as an array of
`
`color values for each point in the image. For example, the Macintosh used bitmaps
`
`for icons in it Graphical User Interface (GUI). Further, Windows and 08/2 have a
`
`bitmap file format (.BMP). IPEG, TIFF, GIF, and PNG also store bitmaps in a
`
`compressed format.
`
`65. Graphic images can also be drawn (or rendered) using graphic
`
`commands. Rectangles, circles, and other polygons can be drawn having different
`
`sizes and colors.
`
`-23-
`
`
`
`V.
`
`OVERVIEW OF THE ‘411 PATENT
`
`66.
`
`The ’411 Patent is directed to a “method and system for reducing the
`
`time it takes for a trader to place a trade When electronically trading on an
`
`exchange, thus increasing the likelihood that the trader Will have orders filled at
`
`desirable prices and quantities.” (’411 Patent , Abstract.) The ”411 Patent refers to
`
`a trading system called “Mercury” that allegedly “ensure[d] fast and accurate
`
`execution of trades by displaying market depth on a vertical or horizontal plane,
`
`which fluctuates logically up or down, left or right across the plane as the market
`
`prices fluctuates. This allows the trader to trade quickly and efficiently.” (’411
`
`Patent, Abstract.)
`
`67.
`
`The specification further stresses that “the present invention is
`
`directed to a graphical user interface for displaying the market depth of a
`
`commodity traded in a market, including a dynamic display for a plurality of bids
`
`and for a plurality of asks in the market for the commodity and a static display of
`
`prices corresponding to the plurality of bids and asks.” (”411 Patent, 3:15-20.)
`
`“Also described herein is a method and system for placing trade orders using such
`
`displays.” (’411 Patent, 3:22-24.)
`
`-24-
`
`
`
`68.
`
`A bid is an order to buy a financial instrument or security, such as a
`
`stock, a stock option, or a future, at a specific price. An ask, sometimes called an
`
`offer, is an order to sell a financial instrument at a specific price.
`
`69.
`
`For example, Fig. 3 of the ’304 Patent, graphically shows bids and
`
`asks. The “Mercury display is a static vertical column of prices with the bid and
`
`ask quantities displayed in vertical columns to the side of the price column and
`
`aligned with the corresponding bid and ask prices.” (’411 Patent, 7:49-53.)
`
`“Mercury also provides an order entry system, market grid, fill window and
`
`summary of market orders in one simple window.” (’411 Patent, 7:3 8—40.)
`
`-25-
`
`
`
`49!.O
`
`|}1020
`
`-26-
`
`
`
`A.
`
`Single Action
`
`70.
`
`Independent claims 1 and 26 each recite the term “single action”:
`
`“selecting a particular graphical area in the order entry region through a single
`
`action of a user input device .
`
`.
`
`.
`
`.” (’411 patent, l3:l2—l3,emphasis added.) The
`
`specification of the ’411 patent provides an explicit definition for this term: “any
`
`action by a user within a short period of time, whether comprising one or more
`
`clicks of a mouse button or other input device is considered a single action of the
`
`user for the purpose of the present invention.” (’411 patent, 4:18-22,emphasis
`
`added.)
`
`B.
`
`Dynamically Displaying
`
`71.
`
`Claims 1 and 26 each recite the term “dynamically displaying”:
`
`“dynamically displaying, via the computing device, a first indicator representing
`
`quantity associated with at least one trade order to buy .
`
`.
`
`.
`
`.” The specification
`
`does not explicitly define this term. However, the specification explains that a
`
`trader can “add or subtract a preset quantity for the quantities outstanding in the
`
`market.” (’411 Patent, 10: 16—19.) In this case, quantities in the Bid or Ask columns
`
`would be updated, but not move. (See ’411 Patent, 10:46-54.) The specification
`
`also explains that “[t]he values in the Bid and Ask columns
`
`are dynamic; that is,
`
`they move up and down
`
`to reflect the market depth for a given commodity.”
`
`-27-
`
`
`
`(’4ll Patent, 7:66—8:16) Thus, dynamically displaying a field is changing a
`
`characteristic (e.g., updating) and/or location (moving) of a displayed field.
`
`VI.
`
`SILVERMAN, GUTTERMAN, AND TQGHER
`
`A.
`
`(liverview
`
`72.
`
`Silverman, like the ’411 Patent, is directed to a “computerized
`
`exchange” for “trading various trading instruments.” (Silverman, 4:57-5z3.) FIG. 1
`
`of Silverman (reproduced below) depicts a functional block diagram of the trading
`
`system of Silverman. As illustrated in FIG. 1, Silverman discloses a host or central
`
`system 20. The host system executes trades by matching active bids and offers sent
`
`from client sites. (Silverman, 2265-328, 527—1 1, 5:32—46.) The keystations 24,
`
`located at the client sites and connected to the central system via a network, are
`
`used to transmit bids and offers for the various trading instruments to the central
`
`system.
`
`(Silverman, 2:65-3:14, 5:20—32.) A keystation 24 is utilized by a trader.
`
`-28-
`
`
`
`34
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`
`73.
`
`The host system 20 also maintains a “host book data base comprising
`
`all of the active bids and offers in the system by trading instrument.” (Silverman,
`
`2265-3 :8) As explained by Silverman, the host book “contains detailed information
`
`from each client site on the particulars of each bid or offer.” (Silverman, 8:3 8-40.)
`
`Thus, the host book includes the market depth (the current bid and ask prices and
`
`quantities in the market) for a commodity. Similarly, each keystation 24 maintains
`
`-29-
`
`
`
`a keystation book for each instrument being actively traded. (Silverman, 10:15-25,
`
`10:56—61.) The information used in the keystation book is used “to generate
`
`displays at the keystations.” (Silverman, 8:14—18.) FIG. 5 of Silverman
`
`(reproduced below with annotations) illustrates a typical keystation book.
`
`FIG 5
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`74.
`
`The keystation book is “a subset of the system or central station or
`
`host book ....” (Silverman, 8:12-14.) Keystation books are initially received fron:
`
`and continuously updated by the central system 20. (Silverman, 3:46—4:10, 5:7-19,
`
`5:37-49 (“real—time updates”), 7:56-8:61, 10:15-25.) The depth of display for a
`
`commodity on a keystation is controlled by the host computer that determines the
`
`maximum possible display depth for the keystation book
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