`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`TD AMERITRADE HOLDING CORPORATION, TD AMERITRADE, INC.,
`AND TD AMERITRADE ONLINE HOLDINGS CORP.
`
`PETITIONERS
`
`V.
`
`TRADE TECHNOLOGIES INTERNATIONAL, INC.
`
`PATENT OWNER
`
`____________________
`
`PATENT NO. 6,772,132
`
`____________________
`
`DECLARATION OF DAVID RHO
`
`IN SUPPORT OF PETITION FOR
`
`COVERED BUSINESS METHOD REVIEW OF U.S. PATENT 6,772,132
`
`- 1 -
`
`TDA 1006
`CBM of U.S. Patent No. 6,772,132
`
`
`
`I, David Rho declare as follows:
`
`1.
`
`I have been engaged by Sterne, Kessler, Goldstein & Fox P.L.L.C. on
`
`behalf of Petitioners, TD Ameritrade Holding Corp., TD Ameritrade Inc., TD
`
`Ameritrade Online Holding Corp., for the above-captioned covered business
`
`method review proceeding. I understand that this proceeding involves United
`
`States Patent 6,772,132, entitled “Click based trading with intuitive grid display of
`
`market depth,” by Gary Allan Kemp, II, filed June 9, 2000, issued August 3, 2004,
`
`(the “’132 Patent”). I understand that the ’132 Patent is currently assigned to
`
`Trading Technologies International, Inc. (“TTI”).
`
`2.
`
`I understand the ’132 patent claims benefit from U.S. provisional
`
`application 60/186,322. For purposes of the covered business method review, I
`
`assume the earliest possible priority date of the ’132 patent is the March 2, 2000
`
`filing date of U.S. provisional application 60/186,322.
`
`3.
`
`I have reviewed and am familiar with the specification of the ’132
`
`Patent. I understand that the ’132 patent has been provided as Exhibit 1001. I will
`
`cite to the specification using the following format (’132 patent, 1:1-10). This
`
`example citation points to the ’132 patent specification at column 1, lines 1-10.
`
`- 2 -
`
`
`
`4.
`
`I have reviewed and am familiar with the file history of the ’132 Patent.
`
`I understand that the file history has been provided as Exhibit 1002-1004.
`
`5.
`
`I have also reviewed and am familiar with the following prior art used
`
`in the Petition for Covered Business Method Review of the ’132 Patent:
`
`(cid:120) U.S. Patent No. 5,077,665 to Silverman et al., (“Silverman”), Exhibit
`
`1007;
`
`(cid:120) U.S. Patent No. 5,297,031 to Gutterman et al., (“Gutterman ”), Exhibit
`
`1008;
`
`(cid:120) U.S. Patent No. 6,014,627 to Togher et al., (“Togher ”), Exhibit 1009;
`
`(cid:120) CA Publication No. CA 2,305,736 to May, (“May”), Exhibit 1010;
`
`(cid:120) A certified translation of “System for Buying and Selling Futures and
`Options Transaction Terminal Operational Guidelines” (“TSE”) and
`the original figures in the Japanese-language original. The translation
`is Exhibit 1013, and the original is Exhibit 1014.
`
`(cid:120) Declaration of the TSE President, (“TSE Decl.”), Exhibit 1015;
`
`6. A complete listing of additional materials considered and relied upon in
`
`preparation of my declaration is provided as Exhibit 1025 to this declaration. I
`
`have relied on these materials to varying degrees. Citations to these materials that
`
`appear below are meant to be exemplary, but not exhaustive.
`
`- 3 -
`
`
`
`7. The ’132 patent describes electronic trading, using a graphical user
`
`interface (“GUI”) “for displaying the market depth of a commodity” and placing
`
`orders on an electronic exchange. (’132 patent; 3:11-13.) I am familiar with the
`
`technology described in the ’132 patent as of the earliest possible priority date of
`
`the ’132 patent (March 2, 2000).
`
`8.
`
`I have been asked to provide my technical review, analysis, insights and
`
`opinions regarding the ’132 patent and the above-noted references that form the
`
`basis for the grounds of rejection set forth in the Petition for the Covered Business
`
`Method Review of the ’132 patent.
`
`I.
`
`QUALIFICATIONS
`
`1.
`
`See my Curriculum Vitae, attached as Exhibit 1023, for a listing of my
`
`qualifications.
`
`2. My expertise qualifies me to do the type of analysis required in this
`
`case.
`
`3.
`
`I have graduated from the Massachusetts Institute of Technology (MIT)
`
`in 1992 with a Bachelor's Degree in Computer Science with Electrical
`
`Engineering.
`
`- 4 -
`
`
`
`4.
`
`In the 1990's I worked as a Manager of an Educational Computing
`
`Facility at MIT, where I created a website having a graphical user interface (GUI)
`
`front end and a database backend, for receiving, storing, and displaying data.
`
`5.
`
`From November 11, 1999 to March, 2001, I worked at marchFIRST in
`
`New York, New York as a Consultant and Manager. At marchFIRST, I worked on
`
`trading applications, such as implementing a distributed messaging system for
`
`fixed income products for a major market data provider. I have also designed a
`
`trading system for a pan-European stock exchange.
`
`6.
`
`From March 2001 I have been working as a partner at MMG Partners in
`
`New York, New York. At MMG Partners, I have engaged in numerous trading
`
`related projects. I designed the front and back office system for four independent
`
`broker dealers, determined product offering gaps for a trading system and market
`
`data firm for a client as opposed the client's competitions, and advised numerous
`
`sell-side and buy-side companies of ways to reduce their market data spending.
`
`7. While at MMG Partners, I have advised a broker/dealer on which order
`
`management system would meet their business requirements.
`
`8. Also while at MMG Partners, I have performed due diligence on the
`
`NYMEX futures exchange with a large private equity firm and a venture capital
`
`firm. I analyzed the trading system from a functional and technical perspective.
`
`- 5 -
`
`
`
`9. Also while at MMG Partners, I worked on an IT benchmarking study
`
`for Deutsche Bourse. This study involved analyzing benchmarks from Deutsche
`
`Bourse, Deutsche Bourse Clearing, CBOT, CBOE, CME, Philadelphia Stock
`
`Exchange, Swiss Stock Exchange, OMX, Milan Stock Exchange, CME Clearing
`
`and OCC. As part of this study I normalized benchmark results across disparate
`
`trading system platforms and architectures.
`
`10. While at MMG Partners, I have also advised Dr. Moses Ma, who was
`
`engaged as an expert witness in a lawsuit involving U.S. Patent No. 6,618,707. The
`
`nature of my advisement was research and analysis regarding refuting invalidity
`
`claims and proving infringement.
`
`11. My Curriculum Vitae is attached as Exhibit 1021, which 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
`
`$500.00 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 ’132 Patent.
`
`- 6 -
`
`
`
`II. MY UNDERSTANDING OF CLAIM CONSTRUCTION
`
`12. 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.
`
`I.
`
`MY UNDERSTANDING OF OBVIOUSNESS
`
`13. 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
`
`technical experts in forming opinions regarding meaning and validity of patent
`
`claims.
`
`14. 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.
`
`15. 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 level of ordinary skill, I considered the
`
`following:
`
`- 7 -
`
`
`
`(cid:120) the levels of education and experience of persons working in the field;
`
`(cid:120) the types of problems encountered in the field; and
`
`(cid:120) the sophistication of the technology.
`
`16. 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.
`
`17. 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.
`
`18. 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
`
`- 8 -
`
`
`
`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
`
`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
`
`19. Based on the considerations I listed above, I conclude that one of
`
`ordinary skill in the art at the time of the alleged invention (i.e., in the March 2,
`
`2000 timeframe) would have had the equivalent of a Bachelor’s degree or higher in
`
`Computer Science and at least two years of work experience designing graphical
`
`user interfaces, and direct or indirect experience with trading or related systems.
`
`IV. LEVEL OF ORDINARY SKILL IN THE ART
`
`A.
`
`Claim Construction
`
`20. As part of my analysis, I have construed the following terms in light of
`
`the specification of the ’132 patent:
`
`21. Working Order: The specification does not provide a definition for the
`
`term “working order.” However, a PHOSITA would understand, in view of the
`
`’132 specification, that a working order is an order that is on the market, but, in
`
`whole or in part has not been filled. (’132 patent, 7:60-63.)(“[t]he number next to
`
`- 9 -
`
`
`
`W indicates the number of the trader's ordered lots that are in the market, but have
`
`not been filled—i.e. the system is working on filling the order.”)
`
`22. Predetermined Fixed Offset: the ’132 specification describes but does
`
`not actually define this term. “Choosing ‘Offset’ in this field will enable the L/R
`
`buttons of cell 1010.” (’132 patent, 8:29-30.) The “L and R fields of cell 1010
`
`indicate a quantity value, which may be added to the order quantity” when the
`
`order is entered. (’132 patent, 8:5-7.) Based on the above definition, Petitioners
`
`propose an offset be a quantity value, positive, negative or zero, which is
`
`predetermined in advance and may be added to an order quantity when the order is
`
`entered.
`
`23. Exchange Order Book: The specification describes “order books” as
`
`listing “the client’s active orders in the market; that is, those orders that have
`
`neither been filled nor cancelled.” (’132, 4:39-42.) The specification also states,
`
`“Market Depth represents the order book with the current bid and ask prices and
`
`quantities in the market.” (’132, 4:54-55.) Thus, a PHOSITA would have
`
`understood the term “order book” to mean a collection of orders (e.g., bids and
`
`asks) that are active in the market.
`
`- 10 -
`
`
`
`V.
`
`SILVERMAN, GUTTERMAN AND TOGHER
`
`A.
`
`Overview
`
`24. Silverman, like the ’132 Patent, is directed to a “computerized
`
`exchange” for “trading various trading instruments.” (Silverman, 4:57-5:3) FIG. 1
`
`of Silverman (reproduced below) depicts a functional block diagram of a trading
`
`system. 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. (Id., 2:65-68, 5:7-11, 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. (Id., 2:68-3:14,
`
`5:20-32) A keystation 24 is utilized by a trader.
`
`- 11 -
`
`
`
`25. 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.” (Id., 2:66-67)
`
`As explained by Silverman, the host book “contains detailed information from
`
`each client site on the particulars of each bid or offer.” (Id., 8:38-40) 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 a keystation
`
`book for each instrument being actively traded. (Id., 10:15-25, 10:56-61) The
`
`information used in the keystation book is used “to generate displays at the
`
`- 12 -
`
`
`
`keystations.” (Id., 8:17-18) FIG. 5 of Silverman (reproduced below with
`
`annotations) illustrates a typical keystation book.
`
`26. The keystation book is “a subset of the system or central station or host
`
`book ….” (Id., 8:13-14) Keystation books are initially received from and
`
`continuously updated by the central system 20. (Id., 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 and the keystation which may
`
`further control the information displayed. (Id., 8:21-35) A person having ordinary
`
`skill in the art at the time of the invention (“PHOSITA”) would recognize that if
`
`the keystation can display a subset of the display depth, by definition a subset can
`
`- 13 -
`
`
`
`be the same as the entire set, which would include the entire market depth for a
`
`commodity on the display.
`
`27. In Silverman, a trader places an order “through data entry using a
`
`conventional keyboard, pointing device such as a mouse or any other conventional
`
`data entry tool.” (Id., 5:29-32.) Silverman does not provide any further details on
`
`order entry.
`
`28. Gutterman provides a graphical user interface (“GUI”) displaying order
`
`icons representing bids or asks at a specific price level. (Gutterman, FIG. 2b
`
`(reproduced below)) “Buy orders [bids] are represented in the deck pane as blue
`
`square shapes, and sell orders [asks] are represented as red circles, both of which
`
`include indications of the quantities of the orders represented.” (Id. at 12:21-24)
`
`- 14 -
`
`
`
`29. Each order icon in Gutterman is “active.” That is, when the user selects
`
`the order icon, the system performs one or more actions – such as populating an
`
`electronic message with an “order’s quantity, price and timestamp.” (Id., 13:29-31)
`
`A trader may immediately transmit this electronic message to another party by
`
`pressing another “active” button – the “SEND” button. (Id., 13:29-43 (“In periods
`
`of heavy market activity….”) As described in the specification of the ’132 Patent,
`
`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 qualifies as a “single action.” Under
`
`this definition, Gutterman's disclosure of selecting an order icon corresponds to a
`
`single action. And, Gutterman’s disclosure of a user making two selections
`
`(selecting the order icon and the “SEND” button) within a short period of time is a
`
`single action.
`
`30. As described in further detail below, a PHOSITA would have been
`
`motivated to use the “active” order icons of Gutterman in the keystation display of
`
`Silverman to permit a trader to place orders. FIG. A includes my edits of FIG. 1 of
`
`Silverman to add the order icon interface of Gutterman to the keystation display of
`
`Silverman.
`
`- 15 -
`
`
`
`FIGURE A
`31. The combination of Silverman and Gutterman fails to disclose selecting
`
`an area of the GUI through a single action “to both set a price for the trade order
`
`and send the trade order having a default quantity to the electronic exchange.” The
`
`use of default values and automatic entry of information (e.g., price) was a well-
`
`known technique in the field of GUIs well before the earliest possible priority date
`
`- 16 -
`
`
`
`of the ‘132 Patent. Togher describes such a system and method that is in the same
`
`field as Silverman and Gutterman.
`
`32. Togher discloses an “electronic brokerage system having a
`
`communication network connecting traders dealing with financial instruments.”
`
`(Togher, 1:7-10) The “electronic brokerage system facilitates the buying and
`
`selling of large blocks of foreign currency by traders.” (Id., 5:4-7) Togher discloses
`
`that a trader can establish default trade values, such as a default trade quantity,
`
`before he/she begins trading: “As shown in FIG. 4, each trader can call up a
`
`‘Trader Profile’ screen 70 … to establish or modify his personal default values for
`
`normal and maximum trading size ….” (Id., 12:7-15, FIG. 4; see also id., 8:65-
`
`9:10, 11:20-25) Establishing the default values allows a trader to “quickly and
`
`accurately respond to a new Dealable Bid or offer price by merely activating a Buy
`
`button 34 or a Sell button 36, respectively on the screen, assuming that the display
`
`is touch sensitive or is provided with a ‘mouse’ or other pointing device.” (Id., 9:1-
`
`10; 11:33-41)
`
`Claims 3, 10, 16
`B.
`33. Claims 3, 10, and 16 recite “the trade order is for a pre-determined
`
`fixed quantity and for a price corresponding to the position of the pointer at the
`
`time of said single action.” The combination of Silverman and Gutterman
`
`discloses that the trade order is “for a price corresponding to the position of the
`
`- 17 -
`
`
`
`pointer at the time of said single action”: “the order … appears in the deck pane
`
`under the appropriate price type at the appropriate price level.” (Gutterman, 12:18-
`
`21; see also, 12:25-40.)
`
`34. Although the combination of Silverman and Gutterman fails to disclose
`
`this limitation, Togher discloses that a trader can set “a default transaction quantity
`
`using his Trader Profile Screen.” (Togher, 8:65-67.) In this manner, “the trader
`
`may quickly and accurately respond to a new Dealable Bid or offer price by merely
`
`activating a Buy button 34 or a Sell button 36, respectively on the screen.”
`
`(Togher, 9:1-5.) When a trader sets a default transaction quantity, the default
`
`transaction quantity entered for the trade order is the pre-determined fixed
`
`quantity.
`
`C.
`
`Claims 5, 12, and 18
`
`35. The combination of Silverman, Gutterman, and Togher discloses that
`
`“the trade order is for a quantity equal to a pre-determined fixed offset plus the
`
`sum of all quantities in the market at prices better than or equal to a price
`
`corresponding to the position of the pointer at the time of said single action and for
`
`a price corresponding to said position.”
`
`36. Gutterman discloses that the GUI that results from the combination of
`
`Silverman, Gutterman, and Togher, (“the combination GUI”) may be touch
`
`- 18 -
`
`
`
`sensitive over a large portion of its display. (Gutterman, 14:39-47) FIG. 2b
`
`Gutterman illustrates “a plurality of order-total displays 133 disposed around the
`
`periphery” of the GUI. (Gutterman, 12:46-48) “Each order-total display 133
`
`corresponds to a respective price tick 136 and displays the total of orders in the
`
`deck at and better than its respective price tick.” (Gutterman, 14:48-49.) Gutterman
`
`does not expressly disclose that the order-total displays are buttons that can be
`
`activated by the trader/broker. But it would have been obvious to a PHOSITA to
`
`make the order-total displays touch sensitive (or otherwise selectable) buttons, in
`
`the same manner that the order icons are touch sensitive (or otherwise selectable),
`
`that could be used to quickly buy or sell all outstanding orders at and below a
`
`certain price (for buy orders) or at and above a certain price (for sell orders). The
`
`trade just described is well-known in the trading community as a limit or better
`
`order. I will refer to a limit or better order as a “sweep order.” The example that
`
`follows will help illustrate. FIG. 2b of Gutterman is reproduced in-part below.
`
`- 19 -
`
`
`
`37. In this example, the figure reproduced in-part represents the display of
`
`the combination GUI of Silverman, Gutterman, and Togher. The top “order-total
`
`display” on the “sell” side indicates that there is a total quantity of 100 for the price
`
`of 98 & 31/32 and better. A trader that intends to purchase all of those orders – to
`
`sweep the market – would have to select each of the five order icon on the sell side
`
`unless there was a mechanism for purchasing all at once. In a fast moving market,
`
`it may be very difficult to select all five order icons without another trader
`
`interfering. Thus, it would have been obvious to a PHOSITA to implement the
`
`order-total displays as buttons that could be used to for sweep orders.
`
`- 20 -
`
`
`
`38. Additionally, one of the defining characteristics of an electronic
`
`exchange is that traders can access and trade on the exchange from many different
`
`geographic locations. Some traders establish trading sites in close physical
`
`proximity to the exchange, while others trade from locations that are further
`
`removed. The further the trading site is from the exchange, the further the market
`
`information being supplied by the exchange is required to travel – over cables,
`
`through routing machines, perhaps over entire continents – before it can be
`
`received, analyzed, and acted on. In my experience, some traders will receive
`
`information from the exchange one or two seconds slower than traders that are
`
`located at or near the exchange. While one or two seconds may not seem like a
`
`much, in the world of high-speed, high-frequency trading it is a very long time. A
`
`PHOSITA would have known about and understood the system limitations of the
`
`computing devices used to participate in the electronic exchange.
`
`39. With this in mind, a PHOSITA would have found it obvious to build an
`
`adjustable offset into the sweep button that was just described in order to account
`
`for market variance caused by time delay. For example, within the one or two
`
`second time delay that a geographically distant trader may encounter, the market
`
`information may change without the trader knowing – more bids or asks may be
`
`sent to the market at a price within the trader’s desired sweep. Togher discloses
`
`allowing a trader to set default values so that the trader may “quickly and
`
`- 21 -
`
`
`
`accurately” respond to market activity. (Togher, 8:65-9:10) Using a default offset
`
`would allow a trader to account for any variance in the market between the time
`
`that he/she receives the latest market information and places a sweep order.
`
`D.
`
`Claims 6, 13, and 19
`
`40. Building on the discussion of claims 5, 12, and 18, it would have been
`
`obvious to a PHOSITA to use more than one offset, such as a positive and a
`
`negative offset having a same default quantity, so that a trader would be able to
`
`quickly respond to the market if they sensed a shift in one direction or the other
`
`while performing a sweep order. Further, it was well known prior to the earliest
`
`possible priority date of the ’132 patent to use right and left mouse buttons to carry
`
`out different actions. (Cooper About Face, p. 200-02.) Thus, it would have been
`
`obvious to a PHOSITA to assign different offsets to the right and left mouse
`
`buttons, such as positive and negative offsets, respectively. For these reasons, it is
`
`my opinion that the combination GUI of Silverman, Gutterman, and Togher
`
`discloses that “the offset is equal to a first pre-determined value if a single action
`
`of a first type is taken and said offset is equal to a second pre-determined value if a
`
`single action of a second type is taken,” as recited in claims 6, 13, and 19.
`
`E.
`
`Claims 25, 26, 35, 36, 45 and 46
`
`41. As discussed above, the combination GUI of Silverman, Gutterman,
`
`and Togher displays market information to a trader at a workstation, and accepts
`
`- 22 -
`
`
`
`the trader’s orders that are placed in response to observing the market. In the
`
`combination GUI, the order icons would represent the outstanding orders in the
`
`overall market for a given commodity, not just the orders in a single broker’s deck.
`
`However, it would have been obvious to a PHOSITA to additionally indicate on
`
`the display which of the outstanding orders were placed by the particular trader
`
`using the workstation and the status of those orders so that the trader could easily
`
`recognize and track his/her orders.
`
`42. Gutterman supports this position by suggesting that “[o]ne of the skills
`
`of a broker is in knowing his deck [i.e., working orders].”1 (Gutterman, 3:14)
`
`Gutterman appreciated that it was difficult for a trader to remember all of his/her
`
`working orders and the status of those orders, especially in times of heavy market
`
`activity. (See Gutterman, 3:14-24 (“Occasionally, the decks are as much as an inch
`
`thick and require great memory skill and anticipatory planning.”) Gutterman
`
`sought to alleviate this burden on the trader’s memory by “allow[ing] the broker to
`
`manage … orders more efficiently” through rapid organization and presentation of
`
`1 A broker is a type of trader. For a broker, “the deck is a stack of orders that
`
`are to be executed by the broker.” (Gutterman, 3:14.) In other words, the broker’s
`
`deck represents his/her “working orders.”
`
`- 23 -
`
`
`
`this information on a display in a manner that could be quickly observed and easily
`
`understood. (Gutterman, 6:37-40, 6:51-55) As described above, Gutterman
`
`displayed the order information against a price axis to help achieve this goal.
`
`(Gutterman, FIG. 2b) Based on these teachings, a PHOSITA would also have
`
`appreciated the importance of indicating on the display the trader’s working orders
`
`and the status of those orders. Additionally, a PHOSITA would have understood
`
`that plotting the trader’s working orders against the price axis would have allowed
`
`the trader to quickly observe the prices that his/her orders were working at.
`
`43. Thus, it is my opinion that it would have been obvious to a PHOSITA
`
`to “dynamically display[] working orders in alignment with the prices
`
`corresponding thereto,” as recited in claims 25, 35, and 45. And, for the reasons
`
`stated, it would have been would have been obvious to a PHOSITA to “dynamically
`
`displaying entered orders in alignment with the prices corresponding thereto,
`
`wherein said entered orders indicate a quantity of said commodity for which a
`
`trader’s orders have been filled at said corresponding prices,” as recited in claims
`
`26, 36, and 46.
`
`44. U.S. Patent No. 6,408,282 to Buist, which was filed on April 15, 1999,
`
`provides further evidence that it would have been obvious to a PHOSITA to
`
`additionally indicate on the display which of the outstanding orders were made by
`
`- 24 -
`
`
`
`the particular trader and the status of those orders. FIG. 6, reproduced below,
`
`illustrates “a visual quote and order book display.” (Buist, 12:8) The column
`
`labeled 684 is a price column. (Buist, 12:51-52) On either side of the price column
`
`has two columns labeled “Your Orders.” These columns are disposed on either side
`
`of a price column 684. (Buist, 12:51-52) “The ‘Limit Qty.’ and ‘AON Qty.’
`
`columns list the size of orders at each price level posted into the system by other
`
`users.” (Buist, 12:54-56) And in support of the position taken above, Buist also
`
`teaches that the GUI also includes the “Your Orders [column showing] the user’s
`
`order in a stock.” (Buist, 12:56-59) Thus Buist’s GUI displays the individual user’s
`
`market positions in addition to the positions in the market that were taken by
`
`others. And, Buist displays the individual user’s market positions in relation to the
`
`price column.
`
`- 25 -
`
`
`
`Claim 39
`F.
`45. Claim 39 recites “dynamically displaying a last traded quantity for said
`
`commodity in alignment with the price corresponding thereto.” In Gutterman, a
`
`market bar “is positioned at the current trade price of the commodity in response to
`
`information communicated to the workstation 10 by the exchange's price reporting
`
`system.” (Gutterman, 12:7-12.) “The market bar 137 moves up and down along
`
`column 136 in response to changes in the market price.” (Gutterman, 12:15-17.)
`
`The combination of the handle and the price tick indicates the current trade price.
`
`(Gutteman, 12:1:24.) Thus, the market bar 137 includes “a last traded quantity for
`
`- 26 -
`
`
`
`said commodity in alignment with the price corresponding thereto.” Because the
`
`market bar is positioned at the current trade price, the display is updated as the
`
`trade price changes – that is, the display is “dynamic.”
`
`Claims 53-55
`G.
`46. The combination of Silverman and Gutterman discloses “an exchange
`
`order book.” Silverman’s 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, 2:66-67.) As explained by Silverman, the host book “contains detailed
`
`information from each client site on the particulars of each bid or offer.” (Id.,
`
`8:38-40.) Thus, the host book includes the “market depth” for one or more
`
`commodities. Similarly, each keystation 24 maintains a keystation book for each
`
`instrument being actively traded. (Id., 10:15-25, 10:56-61.) The keystation book is
`
`“a subset of the system or central station or host book ….” (Id., 8:13-14.)
`
`47. As discussed above, Gutterman discloses that the static display of prices
`
`does not move in response to a market event. Instead, “[t]he market bar 137 moves
`
`up and down along column 136 [price axis] in response to changes in the market
`
`price.” (Gutterman, 12:15-17.) Thus, a PHOSITA would understand that the
`
`“static display of prices does not move in response to” a market event, such as “the
`
`addition of a price to the exchange order book” or “the removal of a price from the
`
`exchange order book.” In addition, “the additional price” and the “removed price”
`
`- 27 -
`
`
`
`comprise “displayed price.” Additionally, in the combination of Silverman and
`
`Gutterman the “price levels along the common static price axis never move in
`
`response to a price change.”
`
`VI.
`
`SILVERMAN, GUTTERMAN, TOGHER AND MAY
`48. Claims 4, 11 and 17 recite “wherein the trade order is for a quantity
`
`equal to a current net position of the user in the commodity and for a price
`
`corresponding to the position of the pointer at the time of said single action.”
`
`49. In the electronic trading system of May, a portfolio interface includes a
`
`“net column 386” that displays “net positions” as the “real-time position of the user
`
`given the portfolio inputted and the traded quantities in column 386.” (May,
`
`71:29-30.) Thus, May discloses net positions for a portfolio and individual net
`
`positions for each commodity in the portfolio. A PHOSITA would have used the
`
`“net position” of May as the default quantity value of Togher in order to place a
`
`buy or sell order on the market that eliminates a trader’s position for a commodity
`
`as a way to minimize the trader’s exposure from overnight risk. A PHOSITA
`
`would have also used the “net position” of May as the default quantity value of
`
`Togher in order to place a buy or sell order on the market that doubles a trader’s
`
`net position for a commodity in a single order.
`
`50. A PHOSITA would have combined Silverman, Gutterman, Togher and
`
`May because each discusses trading, such as commodity trading, using electronic
`
`- 28 -
`
`
`
`trading systems. Additionally, motivation for combining May with Silverman,
`
`Gutterman, and Togher comes from May itself because May explicitly discusses
`
`the Silverman and Togher systems (May, 1:23-3:10, 4:3-5:7.)
`
`VII. TSE AND TOGHER.
`
`A.
`
`Overview
`
`51. TSE is a “Futures/Options Trading System” that “handles the trades in
`
`the [Bond Futures Market, Bond Future Option Market, Index Futures Market,
`
`Index Option