`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`ALR
`
`
`FILED
`
`
`
`
`
`DECEMBER 4, 2006
`
` MICHAEL W. DOBBINS
`Civil Action No. 05cv4811
`CLERK, U.S. DISTRICT COURT
`
`))))))))))
`
`TRADING TECHNOLOGIES
`INTERNATIONAL, INC.,
`Plaintiff,
`
`v.
`
`CQG, INC. and CQGT, LLC,
`Defendants.
`
`______________________________________
`
`Hon. Judge Moran
`Hon. Magistrate Judge Cole
`
`AMENDED ANSWER, AFFIRMATIVE DEFENSES AND COUNTERCLAIMS OF
`CQG, INC. AND CQGT, LLC
`
`Defendants CQG, Inc. and CQGT, LLC (“collectively CQG”) hereby files this Amended
`
`Answer, Affirmative Defenses and Counterclaims pursuant to Fed. R. Civ. P. 15(a).
`
`PARTIES
`
`Plaintiff Trading Technologies is a Delaware Corporation with a principal
`1.
`place of business at 222 South Riverside Plaza, Suite 1100, Chicago, Illinois 60606.
`
`CQG is without knowledge or information sufficient to form a belief as to the truth of the
`
`allegations made in Paragraph 1 of the Complaint, and on that basis denies those allegations.
`
`Defendant CQG is a Colorado Corporation with its principal place of
`2.
`business at 1050 17th Street, Suite 2000, Denver, CO 80265.
`
`CQG admits the allegations in Paragraph 2 of the Complaint.
`
`3.
`IL 60606.
`
`Defendant CQG has a regional office at 311 S. Wacker, Suite 3810, Chicago,
`
`CQG admits the allegations in Paragraph 3 of the Complaint.
`
`Defendant CQGT is a Colorado Limited Liability Company with its
`4.
`principal place of business at 1050 17th Street, Suite 2000, Denver, CO 80265.
`
`CQG admits the allegations in Paragraph 4 of the Complaint.
`
`
`
`
`
`CQG EXHIBIT
`
`
`
`0001
`
`
`
`
`
`
`
`1014
`
`
`
`
`
`Case: 1:05-cv-04811 Document #: 112 Filed: 12/04/06 Page 2 of 13 PageID #:990
`
`5.
`
`Defendant CQGT was formed by CQG on August 12, 2005.
`
`CQG admits the allegations in Paragraph 5 of the Complaint.
`
`JURISDICTION AND VENUE
`
`This is an action for patent infringement arising under the acts of Congress
`6.
`relating to patents, namely the Patent Laws of the United States, 35 U.S.C. §§ 1 et seq. This
`Court thereby has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338(a).
`
`CQG admits the allegations of Paragraph 6 of the Complaint.
`
`Defendant CQG regularly conducts business in this district. Defendant CQG
`7.
`has an office located in this district. Defendant CQG provides trading software that is for
`use with the exchanges in this district, including the Chicago Board of Trade (“CBOT”)
`and the Chicago Mercantile Exchange (“CME”). This Court has jurisdiction generally
`over Defendant CQG.
`
`CQG admits that it has an office in this district and that it provides trading software that
`
`facilitates making trades on the CBOT and CME exchanges. Except as expressly admitted, CQG
`
`denies the allegations in Paragraph 7 of the Complaint.
`
`8.
`
`Defendant CQGT is a wholly owned subsidiary of CQG.
`
`CQG admits the allegations in Paragraph 8 of the Complaint.
`
`Defendants have committed and continue to commit acts of patent
`9.
`infringement in this district. Therefore, this Court has specific jurisdiction over the
`Defendants.
`
`CQG denies the allegations in Paragraph 9 of the Complaint.
`
`Defendants CQG resides in this district, because Defendant is subject to
`10.
`personal jurisdiction in this district. Therefore, this District is a proper venue pursuant to
`28 U.S.C. §§ 1391(b) and 1400(b).
`
`CQG admits that the Court determined that it is personal jurisdiction in this district, and
`
`accordingly venue is proper.
`
`2
`
`0002
`
`
`
`Case: 1:05-cv-04811 Document #: 112 Filed: 12/04/06 Page 3 of 13 PageID #:991
`
`COUNT I:
`Infringement of U.S. Patent No. 6,766,304
`
`Plaintiff Trading Technologies is the owner of U.S. Patent No. 6,766,304 (“the
`11.
`‘304 patent”), titled “Click Based Trading with Intuitive Grid Display of Market Depth,”
`which issued on July 20, 2004. A true and correct copy of the ‘304 patent is attached as
`Exhibit A.
`
`U.S. Patent No. 6,766,304 (“the ‘304 Patent”), identified in Exhibit A in the Complaint,
`
`is a document that speaks for itself. Except as expressly admitted, CQG is without knowledge or
`
`information sufficient to form a belief as to the truth of the remaining allegations in Paragraph 11
`
`of the Complaint, and on that basis denies those allegations.
`
`Plaintiff Trading Technologies is in compliance with any applicable marking
`12.
`and notice provisions of 35 U.S.C. § 287.
`
`CQG is without knowledge or information sufficient to form a belief as to the truth of the
`
`allegations in Paragraph 12 of the Complaint, and on that basis denies those allegations.
`
`Defendants have and continue to infringe the ‘304 patent by making, using,
`13.
`selling and/or offering for sale products and methods covered by claims of the ‘304 patent
`without Plaintiff Trading Technologies’ authorization in violation of 35 U.S.C. § 271(a).
`
`CQG denies the allegations in Paragraph 13 of the Complaint.
`
`In addition, Defendants’ actions have and continue to constitute active
`14.
`inducement of and/or contributory infringement of the ‘304 patent in violation of 35 U.S.C.
`§ 271(b) and (c).
`
`CQG denies the allegations in Paragraph 14 of the Complaint.
`
`15.
`
`Defendants’ infringement of the ‘304 patent is willful and deliberate.
`
`CQG denies the allegations in Paragraph 15 of the Complaint.
`
`Defendants’ infringement of the ‘304 patent has caused irreparable harm to
`16.
`Plaintiff Trading Technologies and will continue to do so unless enjoined.
`
`CQG denies the allegations in Paragraph 16 of the Complaint.
`
`3
`
`0003
`
`
`
`Case: 1:05-cv-04811 Document #: 112 Filed: 12/04/06 Page 4 of 13 PageID #:992
`
`COUNT II:
`Infringement of U.S. Patent No. 6,722,132
`
`17.
`
`Plaintiff Trading Technologies incorporates paragraphs 1-16 as if set forth in
`
`full.
`
`CQG incorporates by reference its responses to Paragraphs 1-16, as set forth above, as
`
`though fully set forth herein.
`
`Plaintiff Trading Technologies is the owner of U.S. Patent No. 6,773, 243
`18.
`(“the ‘132 patent”), titled “Click Based Trading with Intuitive Grid Display of Market
`Depth,” which issued on August 3, 2004. A true and correct copy of the ‘132 patent is
`attached as Exhibit B.
`
`U.S. Patent No. 6,772,132 (“the ‘132 Patent”), identified in Exhibit B in the Complaint, is
`
`a document that speaks for itself. Except as expressly admitted, CQG is without knowledge or
`
`information sufficient to form a belief as to the truth of the remaining allegations in Paragraph 18
`
`of the Complaint, and on that basis denies those allegations.
`
`Plaintiff Trading Technologies is in compliance with any applicable marking
`19.
`and notice provisions of 35 U.S.C. § 287.
`
`CQG is without knowledge or information sufficient to form a belief as to the truth of the
`
`allegations in Paragraph 19 of the Complaint, and on that basis denies those allegations.
`
`Defendants have and continues to infringe the ‘132 patent by making, using,
`20.
`selling and/or offering for sale products and methods covered by claims of the ‘132 patent
`without Plaintiff Trading Technologies’ authorization in violation of 35 U.S.C. § 271(a).
`
`CQG denies the allegations in Paragraph 20 of the Complaint.
`
`In addition, Defendants’ actions have and continue to constitute active
`21.
`inducement of and/or contributory infringement of the ‘132 patent in violation of 35 U.S.C.
`§271(b) and (c).
`
`CQG denies the allegations in Paragraph 21 of the Complaint.
`
`22.
`
`Defendants’ infringement of the ‘132 patent is willful and deliberate.
`
`CQG denies the allegations in Paragraph 22 of the Complaint.
`
`4
`
`0004
`
`
`
`Case: 1:05-cv-04811 Document #: 112 Filed: 12/04/06 Page 5 of 13 PageID #:993
`
`Defendants’ infringement of the ‘132 patent has caused irreparable harm to
`23.
`Plaintiff Trading Technologies and will continue to do so unless enjoined.
`
`CQG denies the allegations in Paragraph 23 of the Complaint.
`
`AFFIRMATIVE DEFENSES
`
`Plaintiff’s Complaint fails to state a claim upon which relief can be granted.
`
`Plaintiff’s claims are barred by the doctrines of estoppel, acquiescence and/or
`
`1.
`
`2.
`
`unclean hands.
`
`3.
`
`CQG has not directly or indirectly infringed, contributed to the infringement of,
`
`infringed through the doctrine of equivalents, or otherwise, nor induced others to infringe any
`
`valid claim of either the ‘304 Patent or the ‘132 Patent. In addition, CQG is not currently
`
`directly or indirectly infringed, contributing to the infringement of, nor inducing the infringement
`
`of any valid claim of either the ‘304 Patent of the ‘132 Patent.
`
`4.
`
`The claims of the ‘304 Patent and ‘132 Patent are invalid or unenforceable for
`
`failure to comply with one or more provisions of Title 35 of the United States Code, including
`
`without limitation, Sections 101, 102, 103, and/or 112.
`
`5.
`
`The claims of the ‘304 Patent and the ‘132 Patent are unenforceable based on the
`
`doctrine of patent misuse.
`
`6.
`
`Plaintiff has failed to use proper and reasonable efforts to mitigate losses and
`
`damages incurred, the existence of which are denied, and CQG has therefore been released and
`
`discharged from liability.
`
`7.
`
`The damages, if any, that were allegedly sustained by Plaintiff as a result of acts
`
`contained in the Complaint were caused in whole or were contributed to by reason of the acts,
`
`omissions, negligence, and/or intentional misconduct or third parties over which CQG had no
`
`control.
`
`5
`
`0005
`
`
`
`Case: 1:05-cv-04811 Document #: 112 Filed: 12/04/06 Page 6 of 13 PageID #:994
`
`8.
`
`Plaintiff is not entitled to any damages for the time period that it was not in
`
`compliance with the marking requirements, as set forth in 35 U.S.C. § 287.
`
`9.
`
`CQG acted in good faith and did not willfully infringe or otherwise violate any
`
`right of Plaintiff.
`
`COUNTERCLAIMS
`
`For their counterclaims in this action, CQG, Inc. and CQGT, LLC (“collectively CQG”)
`
`allege as follows:
`
`1.
`
`CQG incorporates by reference each of its prior allegations of this Answer and
`
`Counterclaims.
`
`JURISDICTION AND VENUE
`
`2.
`
`Counterclaimant CQGT, LLC is a Colorado limited liability company, with its
`
`principal place of business in Denver, Colorado. Counterclaimant CQG, Inc. is a Colorado
`
`corporation, with its principal place of business in Denver, Colorado. Collectively, CQGT, LLC
`
`and CQG, Inc. are known as “CQG.”
`
`3.
`
`Counterdefendant Trading Technologies International, Inc. (“TT”) alleges that it
`
`is a Delaware corporation, with its principal place of business in Chicago, Illinois.
`
`4.
`
`The Court has subject matter jurisdiction over this counterclaim pursuant to the
`
`Federal Declaratory Judgments Act, 28 U.S.C. §§ 2201 and 2202. The Court also has
`
`jurisdiction over this counterclaim pursuant to 28 U.S.C. §§ 1331 and 1338, because this claim
`
`presents a well-pleaded federal question under the Patent Act of 1952 (as amended), 35 U.S.C.
`
`§§ 1, et seq. The Court also has supplemental jurisdiction over the state law counterclaim in this
`
`case pursuant to 28 U.S.C. § 1367(a).
`
`5.
`
`Venue is proper in this district pursuant to 28 U.S.C. §§ 1391(b) and (c).
`
`6
`
`0006
`
`
`
`Case: 1:05-cv-04811 Document #: 112 Filed: 12/04/06 Page 7 of 13 PageID #:995
`
`FIRST CLAIM FOR RELIEF
`Declaratory Judgment of Non-Infringement and Invalidity of the ‘304 and ‘132 Patents
`28 U.S.C. § 2201
`
`6.
`
`7.
`
`CQG repeats and realleges Paragraphs 1-5 above, as though fully set forth herein.
`
`This is a counterclaim for a Declaratory Judgment that CQG has not infringed any
`
`claim of U.S. Patent No. 6,766,304 (“‘304 Patent”) or U.S. Patent No. 6,722,132 (“‘132 Patent”),
`
`and that each and every one of the claims of said Patents are invalid.
`
`8.
`
`This counterclaim arises from an actual and justiciable controversy between CQG
`
`and TT as to the alleged infringement, validity and enforceability of the ‘304 Patent and ‘132
`
`Patent. TT has brought suit against CQG for infringement of the ‘304 Patent and the ‘132
`
`Patent.
`
`9.
`
`CQG has not infringed or committed contributory infringement of any claims of
`
`the ‘304 Patent or ‘132 Patent by making, using, selling, offering for sale, distributing and/or
`
`importing any product, or by practicing any process.
`
`10.
`
`Upon information and belief, the ‘304 Patent and ‘132 Patent, and each and every
`
`respective claim thereof, are invalid or unenforceable for failure to comply with one or more
`
`provisions of Title 35 of the United States Code, including without limitation, Sections 101, 102,
`
`103, and/or 112.
`
`11.
`
`TT’s charges of infringement of the ‘304 Patent and ‘132 Patent with full
`
`knowledge of the invalidity of the ‘304 Patent and ‘132 Patent makes this an exceptional case
`
`warranting an award of CQG’s reasonable attorney’s fees and costs under 35 U.S.C. § 285.
`
`SECOND CLAIM FOR RELIEF
`Declaratory Judgment of Unenforceability
`
`12.
`
`CQG repeats and realleges Paragraphs 1-11 above, as though fully set forth
`
`herein.
`
`7
`
`0007
`
`
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`Case: 1:05-cv-04811 Document #: 112 Filed: 12/04/06 Page 8 of 13 PageID #:996
`
`13.
`
`This is a counterclaim for a Declaratory Judgment that the ‘304 and ‘132 Patents
`
`are unenforceable because alleged inventors Gary Allen Kemp II, Jens-Uwe Schluetter, and
`
`Harris Brumfield, their agents, and/or their attorneys Foley & Lardner engaged in inequitable
`
`conduct before the PTO during the prosecution of the patents.
`
`14.
`
`This counterclaim arises from an actual and justiciable controversy between CQG
`
`and TT as to the alleged enforceability of the ‘304 Patent and ‘132 Patent. TT has brought suit
`
`against CQG for infringement of the ‘304 Patent and the ‘132 Patent.
`
`15.
`
`Upon information and belief, in connection with the applications that matured into
`
`the ‘304 and ‘132 Patents, the named inventors, including Harris Brumfield, TT and their agents
`
`and/or attorneys, withheld material information, with the intent to deceive the United States
`
`Patent and Trademark office, that was requested by the Patent Examiner or that a reasonable
`
`Examiner reviewing the application would consider important in determining whether to allow
`
`the proposed claims to issue.
`
`16.
`
`Harris Brumfield, TT and their agents and/or attorneys each owed a duty candor
`
`and good faith to the United States Patent and Trademark Office while prosecuting the
`
`applications that matured into the ‘304 and ‘132 Patents pursuant to the laws governing
`
`prosecution of patent applications, including 37 C.F.R. § 1.56.
`
`17.
`
`The law imposes a duty of good faith, candor, and disclosure on everyone
`
`associated with prosecuting a patent application. 37 C.F.R. § 1.56. This duty of
`
`candor/disclosure requires that the application, his or her agents and/or attorneys, and anyone
`
`else substantively involved in prosecuting the application to disclose all information that is
`
`requested by the Examiner, or that a reasonable Examiner reviewing the application would
`
`consider important in determining whether to allow the proposed claims to issue.
`
`8
`
`0008
`
`
`
`Case: 1:05-cv-04811 Document #: 112 Filed: 12/04/06 Page 9 of 13 PageID #:997
`
`18.
`
`Upon information and belief, the named inventors of the ‘304 and ‘132 Patents,
`
`their agents, and/or their attorneys provided materially false information, and/or failed to provide
`
`material information, with an intent to deceive, concerning the state of the prior art during
`
`prosecution of the applications of the ‘304 and ‘132 Patents. These failures render the ‘304 and
`
`‘132 Patents, and all patents claiming priority thereto, unenforceable due to the inequitable
`
`conduct of the inventors, their agents, and/or their attorneys.
`
`THIRD CLAIM FOR RELIEF
`Declaratory Judgment of Patent Misuse
`
`19.
`
`CQG repeats and realleges Paragraphs 1-16 above, as though fully set forth
`
`herein.
`
`20.
`
`This is a counterclaim for a Declaratory Judgment that TT has impermissibly
`
`broadened the physical scope of the patent grant of the ‘304 and ‘132 Patents with
`
`anticompetitive effect, rendering the ‘304 and ‘132 Patents unenforceable.
`
`21.
`
`This counterclaim arises from an actual and justiciable controversy between CQG
`
`and TT as to the alleged infringement and validity of the ‘304 Patent and ‘132 Patent. TT has
`
`brought suit against CQG for infringement of the ‘304 Patent and the ‘132 Patent.
`
`22.
`
`During discussions regarding TT’s “Settlement Agreement,” representatives of
`
`TT admitted to representatives of CQG that CQG’s products that employ multiple click-based
`
`trading software do not infringe the claims of the ‘304 Patent and ‘132 Patent.
`
`23.
`
`Upon information and belief, TT has contacted CQG’s customers and business
`
`partners, including Futures Commission Merchants (“FCM’s”), private traders, investment
`
`banks. TT has charged that their use of CQG’s software that employs multiple-click order
`
`routing and/or a dynamic price axis does in fact infringe the claims of the ‘304 and ‘132 Patents.
`
`9
`
`0009
`
`
`
`Case: 1:05-cv-04811 Document #: 112 Filed: 12/04/06 Page 10 of 13 PageID #:998
`
`24.
`
`TT’s attempts to assert the claims of the ’304 Patent and ’132 Patent against
`
`CQG’s customers using CQG’s products that do not infringe the claims of the ’304 Patent and
`
`’132 Patent, while knowing that the claims of the ’304 Patent and ’132 Patent do not cover these
`
`products, constitute an attempt to extend TT’s rights beyond the claims of the Patents and
`
`constitutes patent misuse.
`
`25.
`
`TT’s wrongful acts of patent misuse impermissibly broaden the scope of the ’304
`
`Patent and ’132 Patent with anticompetitive effect, and thus render the ’304 Patent and ’132
`
`Patent unenforceable.
`
`PRAYER FOR RELIEF
`
`WHEREFORE, Defendants and Counterclaimants CQG, Inc. and CQGT LLC
`
`respectfully request this Court enter an Order:
`
`A.
`
`Dismissing Plaintiff’s Complaint with prejudice, and that Plaintiff take nothing by
`
`way of its Complaint.
`
`B.
`
`Declaring that Plaintiff is without right or authority to threaten or to maintain suit
`
`against CQG, Inc. and CQGT, LLC or their customers for alleged infringement of U.S. Patent
`
`No. 6,766,304 or U.S. Patent No. 6,722,132 and:
`
`1.
`
`2.
`
`United States Patent No. 6,766,304 is invalid, unenforceable, and not
`
`infringed by CQG, Inc. and CQGT, Inc.; and
`
`United States Patent No. 6,722,132 is invalid, unenforceable, and not
`
`infringed by CQG, Inc. and CQGT, LLC.
`
`C.
`
`Declaring that Plaintiff’s wrongful acts of patent misuse render U.S. Patent No.
`
`6,766,304 or U.S. Patent No. 6,722,132 unenforceable until such time as the misuse has been
`
`purged.
`
`10
`
`00010
`
`
`
`Case: 1:05-cv-04811 Document #: 112 Filed: 12/04/06 Page 11 of 13 PageID #:999
`
`D.
`
`Finding this action to be exceptional under 35 U.S.C. § 285, and awarding CQG,
`
`Inc. and CQGT LLC their costs and reasonable attorneys’ fees in this action.
`
`E.
`
`Awarding to CQG, Inc. and CQGT LLC such further and additional relief, as this
`
`Court may deem just and proper.
`
`DEMAND FOR JURY TRIAL
`
`Counterclaimants and Defendants CQG, Inc. and CQGT LLC hereby demand a trial by
`
`jury on all issues so triable.
`
`Dated: June 26, 2006
`
`Respectfully submitted,
`
`s/ Mark W. Fischer
`Mark W. Fischer (pro hac vice)
`Nina Y. Wang (pro hac vice)
`Jared B. Briant (pro hac vice)
`FAEGRE & BENSON, LLP
`1900 Fifteenth Street
`Boulder, Colorado 80302
`(303) 447-7700
`
`Kara E.F. Cenar
`Heather Boice
`Jeana R. Lervick
`BELL, BOYD & LLOYD LLC
`Three First National Plaza
`70 West Madison Avenue, Suite 1700
`Chicago, Illinois 60602
`(312) 372 -1121
`
`ATTORNEYS FOR DEFENDANTS CQG, INC.
`AND CQGT LLC.
`
`11
`
`00011
`
`
`
`Case: 1:05-cv-04811 Document #: 112 Filed: 12/04/06 Page 12 of 13 PageID #:1000
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that (1) I am an attorney admitted to appear before this Court and (2) I
`
`caused a true and correct copy of the foregoing FIRST AMENDED ANSWER,
`
`AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS to be sent to the following
`
`individuals by electronic mail:
`
`Counsel for Trading Technologies
`International, Inc.:
`Paul H. Berghoff
`Leif R. Sigmond, Jr.
`Matthew J. Sampson
`George I. Lee
`Marcus J. Thymian
`S. Richard Carden
`Jennifer M. Kurcz
`McDonnell Boehnen Hulbert & Berghoff
`300 South Wacker Drive
`Chicago, Illinois 60606
`
`Steven F. Borsand
`Trading Technologies International, Inc.
`222 South Riverside, Suite 1100
`Chicago, Illinois 60606
`
`Counsel for GL Consultants, Inc.
`GL Trade SA, and Future Path Trading LLC:
`Brian W. Norkett
`James R. Branit
`Bullaro & Carton, PC
`200 North LaSalle St.
`Suite 2500
`Chicago, Illinois 60601
`
`Counsel for GL Consultants, Inc., GL
`Trade SA, and FuturePath Trading LLC:
`Lora A. Moffat
`(lmoffatt@salans.com)
`Alison G. Naidech
`(anaidech@salans.com)
`Salans
`Rockefeller Center
`620 Fifth Avenue
`New York, New York 10020-2457
`
`12
`
`00012
`
`
`
`Case: 1:05-cv-04811 Document #: 112 Filed: 12/04/06 Page 13 of 13 PageID #:1001
`
`Counsel for eSpeed, et al.:
`Raymond C. Perkins
`(rperkins@winston.com)
`Andrew Johnstone
`(ajohnstone@winston.com)
`Winston & Strawn LLP
`35 W. Wacker Drive
`Chicago, Illinois 60601
`
`Counsel for Rosenthal Collins Group, LLC:
`Geoffrey A. Baker
`(gabaker@dowellbaker.com)
`Dowell Baker, P.C.
`229 Randolph St.
`Oak Park, Illinois 60302
`
`Stephen Lesavich
`(Stephen.lesavich@lhtlg.com)
`Lesavich High-Tech Law Group, P.C.
`39 South LaSalle, Suite 325
`Chicago, Illinois 60603
`
`Jeffrey Schulman
`(jschulman@wolinlaw.com)
`Wolin & Rosen, Ltd.
`55 West Monroe Street, Suite 3600
`Chicago, Illinois 60603
`
`__/s/ Nina Y. Wang_________________
`Nina Y. Wang
`CQG, Inc. and CQGT, LLC
`
`13
`
`00013
`
`