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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`TD AMERITRADE HOLDING CORPORATION, TD AMERITRADE, INC., and
`TD AMERITRADE ONLINE HOLDINGS CORP.,
`Petitioner
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`v.
`
`TRADING TECHNOLOGIES INTERNATIONAL, INC.,
`Patent Owner
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`
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`CBM2014-00135 (Patent 6,772,132)1
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`
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`Before SALLY C. MEDLEY, MEREDITH C. PETRAVICK, and
`PHILIP J. HOFFMANN, Administrative Patent Judges.
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`
`
`JOINT MOTION TO TERMINATE PROCEEDINGS AND NOTICE OF
`SETTLEMENT UNDER 35 U.S.C. § 327 AND 37 C.F.R §§ 42.72 AND 42.74
`
`
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`1 An identical paper has also been filed in the following proceedings:
`
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`CBM2014-00131 (Patent 7,533,056)
`CBM2014-00133 (Patent 7,676,411)
`CBM2014-00137 (Patent 7,685,055)
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`CBM2014-00131 (Patent 7,533,056)
`CBM2014-00133 (Patent 7,676,411)
`CBM2014-00135 (Patent 6,772,132)
`CBM2014-00137 (Patent 7,685,055)
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`TABLE OF CONTENTS
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`I.
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`II.
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`Introduction .................................................................................................................... 1
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`Statement of Reasons for the Relief Requested ..................................................... 3
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`A.
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`Public policy favors terminating these proceedings. ................................ 3
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`B. Allowing the parties to negotiate terms of a settlement,
`including termination of proceedings, serves the public interest. .......... 4
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`C.
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`Termination of these proceedings is appropriate at this stage in
`the proceedings in view of the Agreement. ................................................. 6
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`III. Status of Related Proceedings ................................................................................... 7
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`A.
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`The existence of co-pending litigations and PTAB proceedings
`do not weigh against the reasons to terminate. ......................................... 10
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`IV. Conclusion ............................................................. Error! Bookmark not defined.
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`
`
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`
`i
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`CBM2014-00131 (Patent 7,533,056)
`CBM2014-00133 (Patent 7,676,411)
`CBM2014-00135 (Patent 6,772,132)
`CBM2014-00137 (Patent 7,685,055)
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`I.
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`Introduction
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`Petitioners TD Ameritrade Holding Corporation, TD Ameritrade, Inc., and
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`TD Ameritrade Online Holdings Corp. (“TD Ameritrade”) and Patent Owner
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`Trading Technologies International, Inc. (“TT”) have entered into a confidential
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`Settlement Agreement that resolves all underlying disputes between the parties,
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`including CBM2014-00131 against U.S. Patent No. 7,533,056; CBM2014-00133
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`against U.S. Patent No. 7,676,411; CBM2014-00135 against U.S. Patent No.
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`6,772,132; and CBM2014-00137 against U.S. Patent No. 7,685,055, currently
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`before the Board. The parties are filing a copy of the Agreement as Exhibit 2300
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`along with a request to treat it as Confidential Business Information under 37
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`C.F.R. § 42.74(c), and to seal it from the public absent showing good cause.
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`In summary, the Settlement Agreement provides for: (1) a release of TD
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`Ameritrade for alleged past damages; (2) a worldwide non-exclusive license from
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`TT to TD Ameritrade under the patents at issue in the pending CBMs and many
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`other U.S. and foreign patents for the term of the licensed patents; (3) TD
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`Ameritrade providing TT good and valuable consideration for alleged past
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`damages and the on-going license; (4) a worldwide cross-license to TT under
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`certain TD Ameritrade patents; (5) dismissal of district court litigation between TT
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`and TD Ameritrade involving the patents at issue in the CBMs as well as eleven
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`1
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`
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`CBM2014-00131 (Patent 7,533,056)
`CBM2014-00133 (Patent 7,676,411)
`CBM2014-00135 (Patent 6,772,132)
`CBM2014-00137 (Patent 7,685,055)
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`(11) additional patents; and (6) the termination of all of the pending CBMs with
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`respect to all parties.
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`Accordingly, pursuant to 35 U.S.C. § 327 and 37 C.F.R. §§ 42.72 and 42.74,
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`the parties jointly request termination of all four proceedings involving the
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`parties—CBM2014-00131 against U.S. Patent No. 7,533,056; CBM2014-00133
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`against U.S. Patent No. 7,676,411; CBM2014-00135 against U.S. Patent No.
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`6,772,132; and CBM2014-00137 against U.S. Patent No. 7,685,055—with respect
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`to all parties, without rendering a final written decision in any of them. This joint
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`consent for termination is based upon termination of all of the above listed CBM
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`proceedings with respect to all parties because the requested termination is an
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`important element of the consideration of the settlement agreement. During a
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`telephone conference on June 30, 2015, when the parties informed the Board of
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`this settlement, the Board authorized the parties to file a joint motion to terminate
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`these proceedings.
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`During that telephone conference, the Board noted the anticipated settlement
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`agreement was contingent on the Board granting the requested termination and that
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`there is no guarantee that the Board will grant such relief. The parties understand
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`and respect that the requested termination is not automatic and is at the Board’s
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`discretion, and that the Board is not a party to the settlement. For the reasons set
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`2
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`
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`CBM2014-00131 (Patent 7,533,056)
`CBM2014-00133 (Patent 7,676,411)
`CBM2014-00135 (Patent 6,772,132)
`CBM2014-00137 (Patent 7,685,055)
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`forth below, the parties respectfully submit the public interest and the
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`congressional intent strongly supports the requested relief, and, therefore, the
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`parties jointly request that this motion to terminate be granted.
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`II.
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`Statement of Reasons for the Relief Requested
`A.
`Public policy favors terminating these proceedings.
`Congress and the Federal Courts encourage settlement between litigants. See
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`e.g., Delta Air Lines, Inc. v. August, 450 U.S. 346, 352 (1981) (“The purpose of
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`[Fed. R. Civ. P.] 68 is to encourage the settlement of litigation.”); Bergh v. Dept. of
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`Transp., 794 F.2d 1575, 1577 (Fed. Cir. 1986) (“The law favors settlement of
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`cases.”), cert. denied, 479 U.S. 950 (1986). The U.S. Court of Appeals for the
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`Federal Circuit also places a particularly strong emphasis on settlement. See
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`Cheyenne River Sioux Tribe v. U.S., 806 F.2d 1046, 1050 (Fed. Cir. 1986) (noting
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`that the law favors settlement to reduce antagonism and hostility between parties).
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`Because Congress devised these proceedings as an alternative to litigation,
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`termination following settlement comports with public policy. See 77 C.F.R.
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`48680, 48680 (“The purpose of the AIA and this final rule is to establish a more
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`efficient and streamlined patent system that will improve patent quality and limit
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`unnecessary and counterproductive litigation costs”). As stated in the Board’s Trial
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`Practice Guide, “[t]here are strong public policy reasons to favor settlement
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`3
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`
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`CBM2014-00131 (Patent 7,533,056)
`CBM2014-00133 (Patent 7,676,411)
`CBM2014-00135 (Patent 6,772,132)
`CBM2014-00137 (Patent 7,685,055)
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`between the parties to a proceeding.” Office Patent Trial Practice Guide, 77 Fed.
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`Reg. 48,756, 46,768 (Aug. 14, 2012). As the Settlement Agreement includes
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`provisions for cross-licensing of IP, as well as releases and covenants not to sue
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`non-parties to the district court litigation, it also favors the public policy of
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`encouraging licensing and access to technology.
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`B. Allowing the parties to negotiate terms of a settlement, including
`termination of proceedings, serves the public interest.
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`Maintaining these proceedings despite Petitioner’s and Patent Owner’s
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`mutual desire to fully terminate them would prevent the Settlement Agreement
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`from becoming effective and result in the unwanted continuation of all four CBM
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`proceedings and the district court litigation and prevent the beneficial
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`licensing/cross-licensing provided by the agreement. The Settlement Agreement is
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`the result of months of intense negotiating between the parties and reflects a deal in
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`which each side has made compromises and has eliminated risk. For example,
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`Petitioner is providing TT consideration to obtain a release and license under the
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`patents-at-issue as well as many other patents, thereby eliminating the expense of
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`protracted litigation and the risk of injunctions and/or damages awards that could
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`occur if Patent Owner prevails. Likewise, Patent Owner is granting a release and
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`license for consideration far less than the damages being sought in court because it
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`4
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`CBM2014-00131 (Patent 7,533,056)
`CBM2014-00133 (Patent 7,676,411)
`CBM2014-00135 (Patent 6,772,132)
`CBM2014-00137 (Patent 7,685,055)
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`will save significant litigation costs and eliminate the risk of Petitioner prevailing
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`on grounds of non-infringement or invalidity.
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`Denying the requested relief would discourage future settlements by
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`removing a primary motivation for settlement—the removal of litigation costs and
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`risks. If a risk of invalidity judgments in a post grant review against patent owner’s
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`patents remains, there is a strong disincentive for the patent owner to enter into
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`one-sided settlement agreements that completely eliminate the risk for the
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`petitioner/defendant, but not for patent owner. In many instances, such as the case
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`here, a settlement would not make sense if it involved only one party eliminating
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`risk (e.g., just the petitioner removing its exposure or just the patent owner
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`removing its exposure). Also, the Settlement Agreement eliminates significant
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`costs and fees for both parties.
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`The public interest Congress intended to further by creating these
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`proceedings and making termination discretionary—to curb nuisance litigation by
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`so-called “patent trolls”—does not exist here. See, e.g., 159 Cong. Rec. S3021
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`(daily ed. Apr. 25, 2013) (Statement of Sen. Schumer). Patent Owner is not a non-
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`practicing entity. Rather, Petitioner and Patent Owner have active businesses that
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`now want to globally settle this matter and all litigation between the parties, which
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`has consumed the parties’ resources since at least February 9, 2010 (when the
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`5
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`
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`CBM2014-00131 (Patent 7,533,056)
`CBM2014-00133 (Patent 7,676,411)
`CBM2014-00135 (Patent 6,772,132)
`CBM2014-00137 (Patent 7,685,055)
`
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`related district court litigation began). As noted above, there is also a public
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`interest in promoting licensing and cross licensing of the sort in the Settlement
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`Agreement because it spreads technology and increases competition.
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`C. Termination of these proceedings is appropriate at this stage in
`the proceedings in view of the Agreement.
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`A Final Written Decision is not statutorily due until December 2, 2015. The
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`USPTO can conserve its resources through terminating the proceedings now,
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`removing the need for the Board to further consider the arguments, and render a
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`Final Written Decision.2 The requested terminations will also result in conserving
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`resources of the district court because the Settlement Agreement provides for
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`dismissal of that lawsuit. Terminations, forgoing a Final Written Decision, have
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`been granted even in cases that proceeded past Oral Argument. See Callidus
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`Software Inc. v. Versata Software, Inc., and Versata Dev. Group, Inc., CBM2013-
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`00052, Paper 50 (Nov. 24, 2014) (terminating proceeding after Oral Argument on
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`October 29, 2014); Clio USA, Inc. v. the Procter and Gamble Company, IPR2013-
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`2 The parties have contemporaneously filed a request to withdraw their respective
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`request for Oral Argument scheduled for July 9, 2015, because it is both parties
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`intent to minimize any further costs and fees associated with these matters.
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`6
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`
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`CBM2014-00131 (Patent 7,533,056)
`CBM2014-00133 (Patent 7,676,411)
`CBM2014-00135 (Patent 6,772,132)
`CBM2014-00137 (Patent 7,685,055)
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`00438, Paper 57 (Oct. 31, 2014) (terminating proceeding after Oral Argument on
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`July 28, 2014) ; Volusion, Inc. v. Versata Software, Inc. and Versata Development
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`Group, Inc., CBM2013-00017, Paper 53 (June 17, 2014) and CBM2013-00018,
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`Paper 52 (June 17, 2014) (terminating proceeding following oral hearings). In Sony
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`Corp. v. Tessera Inc., IPR2012-00033, Paper 46, p. 2 (Dec 20, 2013), the Board
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`terminated prior to Oral Hearing but after full briefing because the parties had
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`reached “global settlement” of both the IPR and district court litigation, similar to
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`the parties’ settlement here.
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`Because oral argument has not occurred and the Board has not decided the
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`merits of the proceedings, the expected normal course is to terminate proceedings
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`upon settlement. See, e.g., Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756,
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`46,768 (Aug. 14, 2012) (citing 35 U.S.C. 317(a), as amended, and 35 U.S.C. 327)
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`(“The Board expects that a proceeding will terminate after the filing of a settlement
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`agreement, unless the Board has already decided the merits of the proceeding.”).
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`III. Status of Related Proceedings
`Other than the district court case between Patent Owner and Petitioner that
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`will be dismissed if the Settlement Agreement becomes effective (Trading Techs.
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`Int’l, Inc. v. TD Ameritrade, Inc., TD Ameritrade Holding Corporation, and TD
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`Ameritrade Online Holdings Corp., Case No. 10 C 883 (N.D. Ill.) (Consolidated
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`7
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`
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`CBM2014-00131 (Patent 7,533,056)
`CBM2014-00133 (Patent 7,676,411)
`CBM2014-00135 (Patent 6,772,132)
`CBM2014-00137 (Patent 7,685,055)
`
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`into Case No. 10 C 715))3, there are few matters involving the patents at issue in
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`these proceedings remaining between TT and other companies listed below.4 The
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`following are the related pending proceedings5:
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`District Court Case
`Trading Techs. Int’l, Inc.
`v. Tradestation Sec., Inc.,
`Case No. 1:10-cv-00884
`(N.D. Ill.)
`Trading Techs. Int’l, Inc.
`v. IBG LLC, Case No.
`1:10-cv-00721 (N.D. Ill.)
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`U.S. Patent Nos.
`6,772,132
`7,533,056
`7,676,411
`
`6,772,132
`7,533,056
`7,676,411
`7,685,055
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`Status
`Consolidated into Case No.
`1:10-cv-00715 (N.D. Ill.)
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`Consolidated into Case No.
`1:10-cv-00715 (N.D. Ill.)
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`3 This case was captioned in parties’ Mandatory Notices (CBM2014-00131, Paper
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`4, CBM2014-00133, Paper 1, CBM2014-00135 Paper 4, CBM2014-00137 Paper
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`1) as Trading Techs. Int’l, Inc. v. thinkorswim Grp., Inc., 10 C 883 (N.D. Ill.). The
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`updated caption is reflected above.
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`4 TT represents that each of the parties in these cases are competitors of TT. TD
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`Ameritrade does not have sufficient knowledge to join in this statement.
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`5 Additional cases listed in the Mandatory Notices (CBM2014-00131, Paper 4,
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`CBM2014-00133, Papers 1, 31, CBM2014-00135 Papers 4, 31, CBM2014-00137
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`Papers 1, 40) have terminated as settled and/or Consent Judgment entered.
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`8
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`
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`CBM2014-00131 (Patent 7,533,056)
`CBM2014-00133 (Patent 7,676,411)
`CBM2014-00135 (Patent 6,772,132)
`CBM2014-00137 (Patent 7,685,055)
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`Settlement expected shortly;
`Consolidated into Case No.
`1:10-cv-00715 (N.D. Ill.)
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`Consolidated into Case No.
`1:10-cv-00715 (N.D. Ill.)
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`Trading Techs. Int’l, Inc.
`v. FuturePath Trading,
`LLC, Case No. 1:10-cv-
`00720 (N.D. Ill.)
`Trading Techs. Int’l, Inc.
`v. CQG, Inc., Case No.
`1:10-cv-00718 (N.D. Ill.)
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`Trading Techs. Int’l, Inc.
`v. FuturePath Trading,
`LLC, Case No. 1:05-cv-
`05164 (N.D. Ill.)
`Trading Techs. Int’l, Inc.
`v. CQG, Inc., Case No.
`1:05-cv-04811 (N.D. Ill.)
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`Trading Techs. Int’l, Inc.
`v. GL Consultants, Inc.,
`Case No. 1:05-cv-04120
`(N.D. Ill.)
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`
`7,533,056
`7,676,411
`7,685,055
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`7,533,056
`7,676,411
`7,685,055
`6,772,132
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`6,772,132
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`6,772,132
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`
`Final Judgment entered on June
`12, 2015; Appeal Docketed (No.
`15-1768, Fed. Cir., consolidated
`with Appeal 15-1767)
`Patent found not invalid under
`35 U.S.C. § 101, Trial completed
`with verdict in favor of TT, Post-
`Trial Motions completed; Final
`Judgment and appeal to Federal
`Circuit expected soon
`Final Judgment of non-
`infringement with respect to
`certain products entered May 14,
`2015; Case settled to all other
`products and Appeal Docketed
`(No. 15-1767, Fed. Cir.)
`Petitioner
`Status
`
`USPTO Case
`Number
`CBM2015-00058 CQG, Inc. and
`CQGT, LLC
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`U.S. Patent
`Number
`6,772,132
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`
`
`Patent Owner
`Preliminary Response
`filed 5/6/15
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`9
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`
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`CBM2014-00131 (Patent 7,533,056)
`CBM2014-00133 (Patent 7,676,411)
`CBM2014-00135 (Patent 6,772,132)
`CBM2014-00137 (Patent 7,685,055)
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`Of the remaining cases, TT expects Futurepath to settle soon.6 GL
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`Consultants has settled but has a remaining issue (a finding of non-infringement of
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`the ’132 patent) on appeal. In CQG, CQG lost its arguments related to Sections
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`101 (and 112) and post-trial briefing has been completed and is under
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`consideration by the court.
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`A. The existence of co-pending litigations and PTAB proceedings do
`not weigh against the reasons to terminate.
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`During the telephone conference on June 30, 2015, the Board asked whether
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`there were additional related proceedings. The four CBMs identified above are the
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`only proceedings at the USPTO that involve TT and TD Ameritrade. And, as
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`shown above, most litigations relating to the patents at issue have been settled and
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`only a few active district court cases remain. The Agreement finally resolves the
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`dispute between TD Ameritrade and TT, including the underlying district court
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`litigation (Trading Techs. Int’l, Inc. v. TD Ameritrade, Inc. et al., Case No. 10 C
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`883 (N.D. Ill).
`
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`6 TD Ameritrade does not have sufficient knowledge to join this and the next
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`sentence.
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`10
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`
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`CBM2014-00131 (Patent 7,533,056)
`CBM2014-00133 (Patent 7,676,411)
`CBM2014-00135 (Patent 6,772,132)
`CBM2014-00137 (Patent 7,685,055)
`
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`Of the eleven other parties defending litigations against the patents, only
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`four parties remain (CQG, IBG, TradeStation, and FuturePath). IBG, TradeStation,
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`and FuturePath have not filed any petitions with the USPTO to review the patents,
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`nor have they sought to join any of these proceedings. See Sony Corp. v. Tessera
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`Inc., IPR2012-00033, Paper 46, p. 2 (Dec 20, 2013) (terminating proceeding in its
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`entirety noting that a remaining litigation defendant “could have, but did not, file a
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`petition for inter partes review [or] motion for joinder, in order to join this
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`review.”). As joint defendants in the pending case with TD Ameritrade, the
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`remaining parties have declined invitations by the district court to be estopped by
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`these CBM proceedings. See e.g., Ex. 2301-2304.
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`CQG has requested CBM review of the U.S. Patent No. 6,772,132 patent on
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`§§ 101 and 112 grounds, as well as a continuation of the '132 patent, U.S. Patent
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`No. 6,766,304. See CBM2015-00058 and CBM2015-00057. A decision on
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`institution has not issued for these two petitions. CGQ has already pursued these
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`grounds in district court, lost, and will likely be appealing the court’s decision soon
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`once post-trial motions are decided. All of the other defendants could have filed
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`CBM petitions since September 16th of 2012 when CBM review became available
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`and have chosen not to do so with the exception of the CQG’s ’132 and ’304
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`petitions.
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`11
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`
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`CBM2014-00131 (Patent 7,533,056)
`CBM2014-00133 (Patent 7,676,411)
`CBM2014-00135 (Patent 6,772,132)
`CBM2014-00137 (Patent 7,685,055)
`
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`IV. Conclusion
`For the foregoing reasons, Petitioner TD Ameritrade and Patent Owner TT
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`request that the Board terminate all four of these proceedings in their entirety.
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`Respectfully submitted,
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`
`
`
`
`Date: July 5, 2015
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`Date: July 5, 2015
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`/Lori Gordon/
`Lori Gordon
`Registration No. 50,633
`Lead Counsel for Petitioner
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`/Erika H. Arner/
`Erika H. Arner
`Registration No. 57,540
`Lead Counsel for Patent Owner
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`12
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`
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`CBM2014-00131 (Patent 7,533,056)
`CBM2014-00133 (Patent 7,676,411)
`CBM2014-00135 (Patent 6,772,132)
`CBM2014-00137 (Patent 7,685,055)
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that a copy of the foregoing Joint Motion
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`
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`to Terminate Proceeding and Notice of Settlement under 35 U.S.C. § 327 and
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`37 C.F.R. §§ 42.72 and 42.74, was served on July 5, 2015, via email directed to
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`counsel of record for the Petitioner at the following:
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`
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`Lori A. Gordon
`lgordon-ptab@skgf.com
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`Jonathan M. Strang
`jstrang-ptab@skgf.com
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`Robert E. Sokohl
`rsokohl-ptab@skgf.com
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`
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`STERNE, KESSLER, GOLDSTEIN & FOX P.L.L.C.
`1100 New York Avenue, N.W.
`Washington, D.C. 20005-3934
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`/Ashley F. Cheung/
`Ashley F. Cheung
`Case Manager
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`FINNEGAN, HENDERSON, FARABOW,
`GARRETT & DUNNER, LLP
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`13