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`UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
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`TRADING TECHNOLOGIES
`INTERNATIONAL, INC.,
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`Plaintiff,
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`v.
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`CQG, INC., and CQGT, LLC,
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`Defendants.
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`Case No. 05-cv-4811
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`Judge Sharon Johnson Coleman
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`MEMORANDUM OPINION AND ORDER
`Plaintiff Trading Technologies International, Inc., (“TT”) moves to terminate the Markman
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`claim construction proceedings [502], arguing that all outcome determinative claims were construed
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`as part of the eSpeed litigation. Defendants CQG, Inc. and CQGT, LLC, (collectively “CQG”)
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`oppose termination of the Markman proceedings and request this Court construe or refine the
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`construction of the terms: “static,” “common static price axis,” “static display of prices,” “manual
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`re-centering command,” manual re-centering,” “manual re-centering position,” “in response
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`to…sending,” “[] to… send,” and “as a result of…to…send.” For the reasons stated below, this
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`Court grants TT’s motion to terminate the Markman proceedings.
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`Background
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`As in the related eSpeed case, TT brings this civil suit against CQG for patent infringement.
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`TT is the owner by assignment of U.S. Patent No. 6,772,132 (“’132 patent”) and U.S. Patent No.
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`6,766,304 (“’304 patent”). The United States Patent and Trademark Office issued the ‘132 patent on
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`August 3, 2004 and issued the ‘304 patent on July 20, 2004. The patents claim software for
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`displaying the market for commodity trading in an electronic exchange. Judge Moran, of the United
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`TS 1004
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`Case: 1:05-cv-04811 Document #: 735 Filed: 04/24/14 Page 2 of 9 PageID #:20422
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`States District Court for the Northern District of Illinois, was the presiding judge of the eSpeed case
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`and the Markman proceedings.
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`The present case was reassigned to Judge Moran for coordinating common issues, including
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`Markman proceedings, with eSpeed and other related cases in 2005. In an effort to efficiently manage
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`the similar cases of eSpeed, this case, and other related cases, Judge Moran conducted Markman
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`proceedings to construct the meaning of certain terms, which are at issue in this case and others. As
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`part of the coordination effort in 2005, Judge Moran permitted CQG to participate in the Markman
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`proceedings of the eSpeed case. CQG fully participated in those Markman proceedings. CQG
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`submitted briefs, an expert report, and presented attorney argument and expert testimony. CQG’s
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`involvement addressed the following terms in the 2005 Markman proceedings: “static display of
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`prices,” “static price axis,” “order entry region, ” and “single action of a user input device.” Judge
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`Moran acknowledged CQG’s involvement in the eSpeed case Markman proceedings and further
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`stated, “Accordingly, CQG elects to file this Response, but reserves the right to amend or
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`supplement…if there are terms that are not construed in this [eSpeed] proceeding that require
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`construction at a later time.”
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`Judge Moran issued his claim construction ruling on October 31, 2006. The eSpeed court later
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`clarified the claim construction in a supplement on February 21, 2007, and discussed the
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`construction again in a June 2007 ruling. The Federal Circuit Court in eSpeed then affirmed Judge
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`Moran’s constructions and infringement rulings. The eSpeed court constructed the following terms:
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`“static display of prices,” “common static price axis,” “static,” order entry region,” “when the
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`[inside] market changes,” “single action,” and fifteen other terms.
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`In April of 2007, CQG filed a motion for summary judgment of non-infringement, relying
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`on Judge Moran’s construction of terms, claiming the accused CQG products did not meet the
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`“static” limitation terms. In July 2008, Judge Moran stayed this case pending the eSpeed appeal and
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`Case: 1:05-cv-04811 Document #: 735 Filed: 04/24/14 Page 3 of 9 PageID #:20423
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`declined to rule on the CQG’s summary judgment motion because TT had not yet taken discovery
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`about CQG’s accused products. In 2010, the Federal Circuit affirmed Judge Moran’s claim
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`construction of the “static” terms.
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`It is worth noting that, prior to the eSpeed appeal decision, CQG appeared before this Court
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`wanting to proceed with the summary judgment motion based on the “static” terms. This Court
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`stayed the summary judgment motion while the parties attempted to settle. When the settlement
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`talks broke down, both parties filed a joint status report outlying their positions. In the joint status
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`report, TT stated that no Markman proceedings were needed because Judge Moran had already the
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`terms in the eSpeed case. Conversely, CQG disagreed. CQG suggested this Court should follow local
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`rules and move forward with the Markman proceedings in this case. Further, CQG stated:
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`CQG recognizes that the case may rise or fall based on Judge Moran’s and the Federal Circuit’s
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`construction of certain claim terms from the eSpeed case. CQG asserted that there is no justifiable
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`reason to preclude the parties from addressing claim construction issues in this case, especially for
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`claim terms that have not yet been construed by the Federal Circuit. This Court set a schedule with
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`Markman briefing but did not rule on whether a Markman hearing would be held.
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`Legal Standard
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`Determining a patent infringement is a two-step process. Markman v. Westview Instruments,
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`Inc., 517 U.S. 370, 384 (1996); AFG Indus., Inc. v. Cardinal IG Co., Inc., 375 F.3d 1367, 1371 (Fed. Cir.
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`2004). The first step requires the court to determine the scope and meaning of the asserted claim.
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`AFG Indus., Inc., 375 F.3d at 1371. Then, the court compares the properly construed claims with the
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`accused device to reach a verdict regarding the infringement. Id. TT’s motion to terminate the
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`Markman proceedings relates to the first step – determining the scope and meaning of the asserted
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`claim.
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`Case: 1:05-cv-04811 Document #: 735 Filed: 04/24/14 Page 4 of 9 PageID #:20424
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`Claim construction is a question of law. Markman, 517 U.S. at 384; Miken Composites, L.L.C. v.
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`Wilson Sporting Goods Co., 515 F.3d 1331, 1336 (Fed. Cir. 2008). A term is construed according to its
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`ordinary and customary meaning as understood by a person of ordinary skill in the art at the time of
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`the invention. Wavetronix LLC v. EIS Elec. Integrated Sys., 573 F.3d 1343, 1355 (Fed. Cir. 2009). The
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`court construes the claim using the letters-patent, the description of the invention and specifications
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`of the claim annexed to them. Markman, 517 U.S. at 384. Furthermore, judges are better versed and
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`equipped than juries to construe written instruments and are thus charged with claim construction.
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`Id.
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`The United States Supreme Court stressed that treating interpretive issues, such as claim
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`construction, as purely legal will promote certainty and uniformity through the application of stare
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`decisis and issue preclusion. Markman, 517 U.S. at 390. Construction of the claim becomes the law of
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`the case, barring retrial of issues that were previously resolved. AFG Indus., Inc., 375 F.3d at 1372.
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`Courts are not free to second-guess the Federal Circuit’s prior decisions on issues of law, such as
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`claim construction, unless there is an exception. AFG Indus., Inc., 375 F.3d at 1372. Some
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`recognized exceptions include: the discovery of new and different material evidence that was not
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`presented in a prior action; an intervening change in controlling legal authority; or when a prior
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`decision is clearly wrong and its preservation would manifest an injustice. Id.
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`The issue of stare decisis becomes difficult when a plaintiff secures a claim construction of a
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`term against one defendant and that construction becomes binding as to all future defendants
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`regardless of the initial scope arguments raised. Eolas Technologies, Inc. v. Adobe Sys., Inc., 2011 WL
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`11070303 *1- *2 (E.D. Tex. 2011). “However the principal of stare decisis would lose all meaning if a
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`later defendant could unbind itself by merely framing the issue differently.” Id. The Federal
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`Circuit’s decision is binding as a matter of law and a district court must apply the Federal Circuit’s
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`claim construction even where a non-party to initial litigation would like to present new arguments.
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`Case: 1:05-cv-04811 Document #: 735 Filed: 04/24/14 Page 5 of 9 PageID #:20425
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`Id. (quoting Rambus Inc. v. Hynix Semiconductor, Inc., 569 F.Supp.2d 946, 963–64 (N.D. Cal. 2008),
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`which the Federal Circuit later affirmed in Hynix Semiconductor, Inc. v. Rambus Inc., 645 F.3d 1336,
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`1351 (Fed. Cir. 2011)).
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`Discussion
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`TT argues that all terms proposed by CQG were already construed by Judge Moran in
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`proceedings where CQG was an active participant and CQG is improperly seeking to alter those
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`constructions. Further, CQG agreed that it would be bound by constructions of terms addressed in
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`those proceedings. TT also argues that several of the constructions CQG seeks to revisit were
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`affirmed by the Federal Circuit on appeal in Trading Technologies Int’l, Inc. v. eSpeed, Inc., 595 F.3d 1340,
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`(Fed. Cir. 2010). CQG responds that one group of terms, the “static limitation” terms, needs
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`clarification, and two groups of terms, the “manual recentering” terms and the “in response to…
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`sending” terms, were never presented to Judge Moran.
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`I. “Static Limitation” Terms
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`TT argues that the “static” terms were construed by Judge Moran and affirmed by the
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`Federal Circuit and thus this Court should not refine them as CQG requests because the
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`construction is law of the case and we are bound by stare decisis. CQG on the other hand, asserts that
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`this Court should adopt the Federal Circuit’s construction of the “static limitation” terms and refine
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`it to address new disputes. Specifically, CQG asks this Court to adopt the “permanency”
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`requirement included by the Federal Circuit, and determine whether all or some prices in a price
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`column must exhibit the static condition. CQG’s position is that the scope of TT’s patent rights
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`requires that all prices in the price column must be static. TT takes the opposition position, that only
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`some prices in the price column must be static.
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`The “static limitation” terms are “common static price axis” and “static display of prices.”
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`Judge Moran construed “common static price axis” as “a line comprising price levels that do not
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`Case: 1:05-cv-04811 Document #: 735 Filed: 04/24/14 Page 6 of 9 PageID #:20426
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`change positions unless a manual re-centering command is received and where the line of prices
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`corresponds to at least one bid value and one ask value.” (Dkt. 105 at 6). Judge Moran construed
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`“static display of prices” as “a display of prices comprising price levels that do not change positions
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`unless a manual re-centering command is received.” Id. Judge Moran further explained, stating “we
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`must construe the term ‘static’ in its ordinary meaning, non-moving, and allow for the only
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`exception plainly stated in the written description: manual re-centering.” Id. at 8. The Federal Circuit
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`affirmed the district court’s construction of the “static” terms and construed the claims to “require a
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`manual re-centering command.” eSpeed, 595 F.3d at 1354.
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`The instant case is similar to Miken Composites, L.L.C. v. Wilson Sporting Goods Co., where the
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`Federal Circuit affirmed a district court’s claim construction of a term that was secured by the
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`plaintiff against one defendant and later used in another case against another defendant. Miken 515
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`F.3d at 1333. In Miken, the Court revisited for a third time the claim construction of the term
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`“insert” relating to the manufacturing of a sports bat. Id. In the first case, Wilson Sporting Goods Co. v.
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`Hillerich & Bradsby, Inc., 442 F.3d 1322 (Fed. Cir. 2006), Wilson obtained construction of the term in
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`question against one defendant. Id. A second case brought by a different plaintiff against a different
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`defendant also looked at the same term “insert” of the Hillerich case, and that court also accepted the
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`Wilson v. Hillerich construction of the term. DeMarini Sports, Inc. v. Worth, Inc., 239 F.3d 1314 (Fed.
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`Cir. 2001). The third time the court visited the term “insert” was in Miken. In Miken, the court
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`affirmed the claim construction of the term “insert” consistent with the Hillerich and DeMarini cases.
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`Miken 515 F.3d at 1338 n*. Further the Miken court, in a footnote, stated that to not follow the prior
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`courts construction of the term would “run counter to the Supreme Court’s guidance on stare decisis
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`in Markman.” Id.
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`Here, the Federal Circuit affirmed the district court’s construction of the term “static,”
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`including “common static price axis” and “static display of prices.” eSpeed, 595 F.3d at 1355.
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`Additionally, CQG, while not a defendant in eSpeed, fully participated in the Markman proceedings
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`constructing the “static” terms. Further, CQG, at various times in this case, has acknowledged the
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`Federal Circuit’s binding authority when it constructed the “static” terms. Moreover, Judge Moran
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`instructed CQG that it could amend or supplement terms that were not construed in the eSpeed case;
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`“static” was constructed in eSpeed. Unless there is new or different material evidence, a change in
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`authority, or if the prior decision was clearly incorrect, the Federal Circuit’s decision is the law of the
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`case. AFG Indus., Inc., 375 F.3d at 1372. CQG’s assertion that the “static” terms need clarification
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`is unpersuasive at this time. The issue of whether a particular product infringes based on its
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`functionality will be considered at the summary judgment phase. Ultimately, this Court is barred by
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`the law of the case and stare decisis from construing, refining, or re-litigating the “static” terms.
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`III. “Manual Re-centering” Terms
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`The “manual re-centering” terms appear in Judge Moran’s construction of the “static” terms,
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`rather than in the patent claims. Construing the patent and giving proper meaning to the claim
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`language is the first step in a patent case. E-Pass Technologies, Inc. v. 3Com Corp., 473 F.3d 1213, 1220
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`(Fed. Cir. 2007); Markman, 517 U.S. at 384 (1996). However, when giving proper meaning to the
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`claim language, “the terms courts use to enunciate the proper construction of a claim are not
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`themselves limitations that require interpretation.” E-Pass Technologies, Inc., 473 F.3d at 1220. In E-
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`Pass, E-Pass correctly argued that the district court, during its infringement analysis, improperly
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`treated words of the claim construction as additional claim limitations. Id. The E-Pass court
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`ultimately ruled that the error was harmless and had not departed from the claim construction of the
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`term. Id. While the E-Pass court held it was a “harmless error,” that would not be the case here.
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`In our case, like in E-Pass, CQG asks this Court to construe language that the eSpeed court
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`used to construe the term “static.” When construing “static display of prices,” the eSpeed court
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`stated: a display of prices [line] comprising price levels displayed along a line that do not change
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`Case: 1:05-cv-04811 Document #: 735 Filed: 04/24/14 Page 8 of 9 PageID #:20428
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`positions unless a manual re-centering command is received….”; And “A price level that only
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`moves in response to a manual re-centering command cannot also move in response to an
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`automatic re-centering command. Thus, this court construes the claims to require a manual re-
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`centering command.” eSpeed, 595 F.3d at 1352. CQG alleges the additional language the court used
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`to construct “static” is outcome determinative and thus should be constructed by this Court.
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`However, as noted in E-Pass, words that the courts use to construct terms are not in and of
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`themselves terms to be constructed. E-Pass Technologies, Inc., 473 F.3d at 1220. The Miken court
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`further stated: “a claim term should not be broadened in the absence of something in the written
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`description and/or prosecution history to provide explicit or implicit notice to those of ordinary skill
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`in the art, that the inventor intended a disputed term to cover more than the ordinary and customary
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`meaning revealed by the context of the intrinsic record.” Miken, 515 F.3d at 1338. Construing the
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`terms Judge Moran used in the construction of the “static” term would change the meaning and
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`limitations given to that term. This Court will apply the “static” term as construed in the eSpeed
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`litigation.
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`VI. “Single Action” / “in response to…sending” Terms
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`As noted in the previous sections, this Court is not free to second-guess the Federal Circuit’s
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`prior decisions on issues of law, such as claim construction, unless there is an exception. AFG
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`Indus., Inc., 375 F.3d at 1372. Additionally, “the terms courts use to enunciate the proper
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`construction of a claim are not themselves limitations that require interpretation.” E-Pass Technologies,
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`Inc., 473 F.3d at 1220.
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`The eSpeed court has already construed the claim term “single action of a user input device.”
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`eSpeed, 595 F.3d 1358-59. In its eSpeed construction of “single action of a user input device,” the
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`court stated: “In response to a selection of a particular location of the order entry region by a single
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`action of the user input device, setting a plurality of parameters for a trade order relating to the
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`commodity and sending the trade order to the electronic exchange.” (‘304 patent claim 1). Similar to
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`the “manual re-centering” terms above, the terms that CQG is looking to construe are not part of
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`the claim, but are part of the construction that the eSpeed court used to “enunciate the proper
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`construction of a claim.” Construing these additional terms would change the meaning and place
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`limitations on the “single action user” claim term. Therefore, this Court declines to construe the
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`construction.
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`Conclusion
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`For the reasons stated above, this Court grants TT’s motion to terminate Markman
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`proceedings [502].
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`IT IS SO ORDERED.
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`Date: April 24, 2014
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`Entered: ____________________________
` United States District Judge
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