Steven F. Borsand
`Executive Vice President, Intellectual Property
`Trading Technologies International, Inc.
`Direct line: 312.476.1018
`steve.borsand@tradingtechnologies.com
`
`August 10, 2015
`
`Hon. Michelle K. Lee
`Under Secretary of Commerce for Intellectual Property and
`Director of the United States Patent and Trademark Office
`600 Dulany St., MDW 10D44
`Alexandria, VA 2231
`
`
`Re: Abuse of Covered Business Method Review Process
`
`Dear Director Lee:
`
`We write to inform you of an abuse of the post-grant review process that poses a serious
`threat to our company, Trading Technologies International, Inc. (“TT”), and likely to other
`similarly-situated patent owners.
`
`As explained in detail below, CBM petitions are being filed by a group of TT’s competitors
`against TT patents that are clearly outside of the jurisdictional boundaries of Section 18 as they are
`not covered business method patents. The patents are directed to technology—innovative structural
`and functional features of tools embodied in graphical user interfaces (“GUIs”) and are not in any
`way directed to a business method or practice. To make matters worse, these competitors are
`misusing the CBM review process as part of a strategy of litigation gamesmanship against TT. This
`improper litigation gamesmanship includes:
`
`•
`
`Intentionally delaying the filing of CBM petitions (for years) while taking a “wait
`and see” approach based on events in the district court litigation and other CBM
`filings;
`• Serially filing delayed CBM petitions on the same or related patents;
`• Timing the filing of the CBM petitions in an effort to maximize delay of the district
`court litigation;
`o For example, on two occasions, CBM petitions were filed only after the
`district court decided to lift previously-entered stays;
`• Forum shopping by selectively pursuing grounds to seek multiple “bites at the
`apple”;
`
`
`
`
`
`
`222 South Riverside Plaza
`Suite 1100
`Chicago, IL 60606
`
`+1 312 476 1000 Main
`+1 312 476 1001 Fax
`
`tradingtechnologies.com
`
`
`
`TRADING TECH EXHIBIT 2001
`TRADESTATION v TRADING TECH
`CBM2015-00161
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`o For example, waiting to file CBM petitions on certain grounds only after
`losing in district court and refraining from including in filed CBM petitions
`alleged “key” grounds that are still being pursued in district court; and
`• Coordinating CBM petition filings amongst the group of defendants to limit the
`effects of estoppel on members of the group.
`
`Defendants’ conduct and use of the CBM review process cannot be explained by anything
`other than litigation gamesmanship. This goes against the whole point of Section 18, which was to
`provide a faster and cheaper alternative to litigation in which parties seek to promptly raise
`legitimate defenses.
`
`TT respectfully submits that the conduct described herein merits the attention of the
`Director for at least two important public policy reasons: (1) preventing abuse of the CBM review
`process by litigation gamesmanship; and (2) ensuring that the PTAB stays within the statutory
`bounds in clear-cut cases. If a strong message is not sent to discourage litigation gamesmanship and
`provide clarity on straightforward jurisdictional issues, petitioners will continue to push the limits
`and patent owners will be forced to unfairly face significant costs (both in terms of time and
`money) to fight improper petitions. You are especially qualified to consider these issues based on
`your experience and technical background.
`
`TT requests that you exercise your discretion as Director to promptly put a stop to these
`improper CBM petitions. Otherwise, TT will unfairly face significant expense to fight the petitions
`and be faced with attempts to even further delay of the just resolution of its claims of infringement
`against its competitors.
`
`Background
`
`TT is the plaintiff in a patent infringement suit that was filed more than five years ago, in
`early 2010, against three groups of defendants: Tradestation, CQG, and Interactive Brokers Group
`(“IBG”) (“2010 Litigation”).1 On July 15, 2015, these defendants made in-court statements
`threatening to begin a process over the coming weeks of filing CBM petitions against “most (if not
`all)” of the sixteen patents-in-suit, see Attachment A,2 and explained to the court how the labor
`would be divided amongst the defendants. See Attachment B. On Monday, July 20, 2015, the
`
`
`
`1 The 2010 cases against these defendants are captioned as follows: Trading Techs. Int’l, Inc. v.
`Tradestation Sec., Inc., Case No. 1:10-cv-00884 (N.D. Ill.); Trading Techs. Int’l, Inc. v. CQG, Inc.
`et al., Case No. 1:10-cv-00718 (N.D. Ill.); and Trading Techs. Int’l, Inc. v. IBG LLC, Case No.
`1:10-cv-00721 (N.D. Ill.). These cases have been consolidated under Case No. 1:10-cv-715 (N.D.
`Ill). There is also one more case, Trading Techs. Int’l, Inc. v. FuturePath Trading, LLC, Case No.
`1:10-cv-00720 (N.D. Ill.), in the consolidated case but that is expected to settle very shortly. There
`were additional cases filed in 2010, but most have settled. A second case from 2005 is pending
`against CQG, Trading Techs. Int’l, Inc. v. CQG, Inc. et al., Case No. 1:05-cv-04811 (N.D. Ill.),
`which is in the post-trial motion stage. Importantly, all of the remaining defendants are members of
`a joint defense group.
`2 The patents-in-suit are all directed to particular structural and functional features of a specialized
`GUI tool that happens to be used for electronic trading. The patents-in-suit are from three different
`families as set forth in the Appendix. For each defendant, the accused products are the same for all
`of the patents-in-suit.
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`defendants began implementing their plan, when Tradestation filed the first of the promised CBM
`petitions (CBM2015-00161, attached as Attachment C).
`
`The recently-filed petition and the threatened conduct to abuse the post-grant review process
`poses a serious threat to TT—a small Chicago-based operating company that employs about 300
`people. The defendants’ recently-filed and forthcoming petitions are a litigation tactic to seek
`multiple bites at the apple and delay litigation contrary to the AIA’s purpose. Moreover, the patents
`are not directed to business methods or practices and are clearly not within the jurisdictional
`purview of Section 18.
`
`As background, TT relies on its patent portfolio in the manner intended by the patent
`system. TT owns numerous patents that publically disclose and claim innovative technological
`improvements (e.g., in terms of speed, accuracy and usability) to the technology of interactive GUI
`tools that it has created and sells. TT relied on the patented innovations of MD TRADER®3 to
`obtain critical investments at a time when it was losing money. The main inventor of some of the
`key inventions in MD TRADER assigned the inventions to TT expecting that TT would protect
`them with patents and commercialize them to turn the company around.4 TT did just that, and its
`MD TRADER product has been key to TT’s success ever since its launch in August 2000. Indeed,
`MD TRADER and the patented inventions embodied therein proved to be revolutionary. See e.g.,
`Exhibit 2201, CBM2014-00135, ¶ 32 (summarizing praise from over 30 prominent participants in
`the industry). Patent protection for the innovative features is critical because, once the product was
`released, competitors were able to see and copy the inventions (and many have done so).
`
`For the most part, TT has been able to avoid litigation and settle with the vast majority of its
`competitors, including all of its traditional long-time competitors. Some newer companies have also
`approached TT for licenses before launching their own products incorporating the patented
`technology. Since 2004, TT has entered into 29 agreements involving its patents relating to the
`innovations in MD TRADER to protect itself from unfair competitive advantages created by
`copying of its significant contributions to the technology used in order entry GUI tools. Each of
`these agreements involves competitors honoring the patents in some manner: some dropped the
`infringing technology from their products, some took royalty-bearing licenses to practice the
`patented inventions, some agreed to consent judgments, and some paid for past use of the patented
`inventions. Unfortunately, TT has been forced to litigate against a handful of competitors that have
`refused to honor the patents.
`
`One of TT’s first patents directed to the technology in MD TRADER is U.S. Patent
`No. 6,766,304 (“the ’304 patent”). Before issuance, the ’304 patent (as well as U.S. Patent No.
`6,772,132 (“the ’132 patent”) underwent a rigorous examination at the PTO, including twice
`through a special quality review process at the time called the “second pair of eyes.” The ’304/’132
`patents and other related family members (like many patents in Art Unit 3600) disclose and claim a
`technological improvement upon prior technology. They are not “business method patents.” Indeed,
`both the UK and the EPO—which ban business method patents—granted the foreign counterparts
`to this family of patents.
`
`
`
`
`
`
`3 MD TRADER is TT’s commercial product embodying the inventions of the patents-in-suit and
`continues to be an important product for TT today.
`4 These inventions are disclosed and claimed in the “Brumfield family” identified in the Appendix.
`
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`After issuance, the ’304 patent continued to be rigorously tested. The PTO confirmed the
`original claims in reexamination (Control No. 90/008,577) after considering hundreds of alleged
`prior-art references and arguments raised by various defendants in litigation.5 It also survived
`several scorched-earth litigations, including two jury trials in which TT prevailed.6 And the Federal
`Circuit affirmed district court determinations rejecting invalidity arguments.7 Recently, a federal
`district court judge in Illinois determined that the ’304 patent (as well as the ’132 patent) claims
`patent-eligible subject matter under 35 U.S.C. § 101 and that the claims satisfy the written
`description requirements of 35 U.S.C. § 112, ¶ 1.8
`
`The attached petition filed by Tradestation is directed to the ’304 patent. This petition is
`substantially identical to a petition filed by CQG earlier this year (it even uses CQG’s expert
`declaration).9 The petition asks the PTAB to re-decide the identical issues under § 101 and § 112,
`¶ 1, already decided by the district court judge in TT's favor only a few months ago—defenses that
`CQG lost. Importantly, both of these issues (§§ 101 and 112) will be heading the Federal Circuit for
`final resolution shortly.
`
`The Director and PTO have wide discretion to decline institution of post-grant review for
`any reason. See 35 U.S.C. § 324; see also 37 C.F.R. § 42.208. The Director’s power to implement
`safeguards against abuses, such as those outlined in this letter, lies in the text of the AIA itself. See
`e.g., 35 U.S.C. 324(d) (providing Director with discretion to “stay, transfer, consolida[te], or
`terminat[e]” proceedings, taking “into account whether . . . the same or substantially the same prior
`art or arguments previously were presented to the Office.”). This power allows the Director to act
`as a gatekeeper to prevent abuse of the post-grant review process. The Tradestation ’304 CBM
`petition and the threatened future filings amount to a severe abuse of the post-grant review process
`that deserves the attention of the Director. As explained below, these petitions should be promptly
`denied for at least two reasons, each of which is equally important from a public policy perspective.
`
`
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`5 The related ’132 patent was also confirmed at the same time in a reexamination involving the
`same alleged prior art. Later, the PTO declined to institute yet another reexamination request filed
`by one of the defendants at the time as not raising a substantial new question of patentability. The
`analysis supporting patentability in the original examinations, subsequent examination, and the
`various reexaminations applies equally to many of the various continuations in the Brumfield
`family of patents.
`6 Trading Techs. Int’l v. eSpeed Inc., No. 1:04-cv-05312 (N.D. Ill.) and Trading Techs. Int’l, Inc. v.
`CQG, Inc. et al., No. 1:05-cv-04811 (N.D. Ill.). Both cases involved the ’304 and ’132 patents.
`7 Trading Technologies Intern., Inc. v. eSpeed, Inc., 595 F.3d 1340 (Fed. Cir. 2010). The Federal
`Circuit has also considered other patents in the same family. See Trading Techs. Int’l v. Open E
`Cry, LLC et al., 728 F.3d 1309 (Fed. Cir. 2013) (reversing district court grant of summary judgment
`of invalidity for lack of written description for the ’411, ’768, ’374, and ’055 patents).
`8 See e.g., Trading Techs. Int’l, Inc. v. CQG, Inc. et. al., No. 05-cv-4811, Dkt. 1073 (Feb. 24, 2015)
`(patent not invalid under 35 U.S.C. § 101). Opinion attached as Attachment E. The district court
`also granted judgment as a matter of law in TT’s favor near the end of the trial on the same §112
`defense being raised in Tradestation’s petition.
`9 The PTAB declined to institute CQG’s petition because CQG is barred by its previously-filed
`declaratory judgment action. CBM2015-00057, Paper 12 (P.T.A.B. Jul. 10, 2015).
`
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`Litigation Gamesmanship Through the Use of the CBM Review Process Unfairly Burdens
`Patent Owners in Contravention of the AIA
`
`First, the defendants are using these petitions for litigation gamesmanship to improperly
`burden TT with serial attacks on its patents, to perpetually delay the litigation, and to seek multiple
`bites at the apple for certain defenses, in contravention of the purpose of the AIA. Post-grant
`reviews are intended to provide a “faster, less costly alternative[] to civil litigation,” but the
`framework must also “reduce the ability to use post-grant procedures for abusive serial challenges
`to patents.” Cong. Rec. S951 (Feb. 28, 2011) (statement of Sen. Grassley). Unlike inter partes
`reviews, which have a one-year bar to preclude serial filings (see 35 U.S.C. § 315(b)), CBM
`proceedings have no explicit statutory timing provisions, so the Office should be vigilant to enforce
`the AIA’s intent by protecting patent owners against delays and serial abuse of the CBM process.
`The need to protect patent owners from serial post-grant attacks echoes testimony by Hon. Paul
`Michel (Ret.), former Chief Judge of the United States Court of Appeals for the Federal Circuit,
`who urged that “a ban on serial attacks on the same patents” should safeguard patent owners and
`prevent abuse of post-grant reviews. Hearing before Subcommittee on Intellectual Property,
`Competition, and the Internet (Feb. 11, 2011) (statement of Hon. Paul Michel (Ret.)). The
`defendants’ burgeoning petitions discredit this purpose.
`
`The 2010 Litigation against the three remaining defendants began in earnest in 2010 after
`TT’s attempts to settle with these defendants failed. Since the beginning, the defendants have
`pursued a strategy of delay. First, the defendants convinced the district court to put the cases on
`hold to consider on summary judgment what it called “key” dispositive issues that would “vastly
`simplify the case” and that stood as “significant barriers” to settlement with respect to several of the
`Brumfield patents and one of the Friesen patents (U.S. Patent No. 7,533,056—“the ’056 patent”).
`See Dkt. 181 (Attachment F); Dkt. 176 (Attachment G). For the Brumfield patents, the defendants
`contended that certain of those patents were invalid under § 112 based on collateral estoppel from a
`previous decision in a different case. For the ’056 patent, defendants asserted lack of written
`description under § 112. In early 2012, the district court granted summary judgment in TT’s favor
`on the ’056 patent (rejecting the § 112 defense) and against TT on several of the Brumfield patents
`(including U.S. Patent Nos. 7,676,411 (“the ’411 patent”) and 7,685,055 (“the ’055 patent”)) based
`on collateral estoppel. TT appealed this decision and the Federal Circuit reversed the application of
`collateral estoppel, remanding substantive merits of the § 112 defense for the ’411 and other
`patents.10
`
`For the entire period from initial consideration of the summary judgment motions (in 2011)
`to receiving the mandate from the Federal Circuit in early 2014, the rest of the case was stayed.
`After the reversal, in early 2014 the defendants again tried to convince the district court to delay the
`case. This time they asked the court to focus only on what they called the “determinative”
`substantive § 112 issue for certain Brumfield patents for which they wanted to re-file a summary
`judgment motion. See Dkt. 528 (Attachment H). On April 21, 2014, the district court denied this
`request and ordered the parties to submit schedules for the case.
`
`It was not until after the district court finally indicated that the case was going to proceed,
`that in May of 2014 (almost 2 years after the CBM process first became available in September of
`2012), defendants’ joint defense partner TD Ameritrade (with whom TT recently settled) filed
`
`
`
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`
`
`10 The Federal Circuit completely reversed on the ’055 patent, rejecting the § 112 defense on the
`merits.
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`CBM petitions against five of TT’s patents-in-suit.11 With respect to three Brumfield continuations
`(the ’132, ’304 and ’411 patents), the PTAB denied institution entirely on the ’304 patent in
`CBM2014-00136 based on the merits and denied all prior art grounds on the ’132 and ’411 patents
`in CBM2014-00135 and CBM2014-00133. For the ’132 and ’411 patents, the PTAB instituted only
`on grounds of §101. With respect to a Brumfield CIP and one Friesen patent (the ’055 and ’056
`patents, respectively), the PTAB only instituted on grounds of § 101 and some of the requested
`prior art grounds. These preliminary institution decisions were made prior to the Federal Circuit’s
`decision in DDR Holdings and the CQG district court finding the ’132 and ’304 claims § 101
`eligible under both prongs of the Alice test.
`
`Based on TD’s petitions, the defendants convinced the district court to again stay the entire
`litigation, including eleven additional, unchallenged patents because the challenged patents “go to
`the heart of the case” and the unchallenged patents “are in the same patent families” or are
`“technologically related.”12,13 In addition to serving the litigation tactic of delay, the content of the
`TD Ameritrade petitions reflected gamesmanship. Despite telling the district court for years that the
`substantive § 112 issue for the ’411 patent was “key,” the TD Ameritrade petition for the ’411
`patent did not even raise this issue (instead it raised other defenses). Clearly, the defendants made
`the decision to preserve that “key” defense for use in district court. Moreover, the TD Ameritrade
`petition of the ’056 patent asserted the identical § 112 defense on which defendants lost summary
`judgment at the district court—showing an intent to seek a “second bite at the apple” at the PTAB
`on that issue.
`
`Importantly, while accepting the benefit of the stay, the remaining defendants refused to join
`in TD’s proceedings or agree to be estopped based on their outcome. CQG also attempted to stay
`another related case based on its CBM petitions filed on the eve of trial, but that request was denied
`based in part on CQG’s “dilatory motive.”14 It was not until TD’s proceedings were terminated in
`July of this year and until after a district court ruled on § 101 and § 112, that the remaining
`defendants chose to pursue the currently threatened strategy of additional CBM petitions with the
`stated intent of seeking yet a further stay of the district court litigation. Importantly, the remaining
`defendants knew all along that a settlement between TT and TD Ameritrade was a distinct
`possibility. Indeed, the reason that the PTAB permits parties to request to join an instituted
`proceeding is the possibility of settlement. See 37 C.F.R. § 42.222. Moreover, defendants have been
`fully aware of the fact that CBM proceedings have been available to them since 2012. Yet, the
`above-summarized history shows that rather than using CBMs as a litigation alternative, defendants
`are attempting to use the process as a litigation tactic to perpetually delay litigation and obtain
`multiple bites at the apple.
`
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`11 See Trading Techs. Int’l, Inc. v. BGC Partners, Inc., No. 1:10-cv-715 (N.D. Ill), Dkt. 543 (Apr.
`21, 2014)(denying renewed stay request); see also CBM2014-00131, Paper 4 (P.T.A.B. May 19,
`2014) (requesting CBM review less than a month later).
`12 Trading Techs. Int’l, Inc. v. BGC Partners, Inc., No. 1:10-cv-715 (N.D. Ill), Dkt. 546 (May 22,
`2014).
`13 TT appealed this stay decision and the Federal Circuit granted TT’s request to handle the appeal
`on an expedited basis. However, now that the TD Ameritrade CBM proceedings have been
`terminated, the stay was lifted as of July 24, 2015. See 1:10-cv-00715, Dkt. 617 (N.D. Ill.) (citing to
`the lack of currently pending proceedings at the PTO as weighing in favor of lifting the stay).
`Accordingly, the appeal is moot and was dismissed.
`14 Trading Techs. Int’l, Inc. v. CQG, Inc. et al., No. 1:05-cv-04811 (N.D. Ill), Dkt. 876 (Jan. 13,
`2015).
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`It is also clear from the recently-filed court papers that the remaining defendants will
`“divide and conquer” by each filing different petitions while not joining in the other parties’
`petitions in a wait-and-see approach. Clearly, this strategy is coordinated and seeks piecemeal filing
`to get multiple “bites at the apple” while perpetually delaying the litigation. This type of
`gamesmanship is precisely what the AIA sought to avoid.
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`TT’s Patents Directed to Novel GUI Technology Are Clearly Not Covered Business Method
`Patents and Fall Outside of the Explicit Jurisdictional Boundaries of Section 18 as Well as the
`Spirit of the Law
`
`Second, and just as importantly, each of TT’s patents is directed to technology—particular
`inventive structural and functional features of a GUI tool for order entry that solved technical
`problems relating to human-computer interaction (“HCI”) (e.g., improved speed and accuracy and
`improved usability, both as compared to prior art tools). They are not directed to business methods
`or business practices, as required by the title and text of AIA Section 18. Section 18(a)(1)(E). Nor
`do they merely claim generally using a generic display or GUI. Indeed, the act is clear that not all
`methods used in conducting business are CBMs because it limits the definition to “method[s] . . .
`for performing data processing or other operations used in the practice, administration, or
`management of a financial product or service, except that the term does not include patents for
`technological inventions.15 Patents to alleged novel GUI technology, like TT’s, are clearly outside
`of that scope. Such patents are analogous to patents directed to technological features of physical
`tools or devices, such as a calculator or a stapler.
`
`As explained by Senators Durbin and Schumer during the drafting and passage of the AIA,
`TT’s patents are not the types of patents encompassed by CBM proceedings. The following
`exchange in the legislative history between Senators Durbin and Schumer (the sponsor of Section
`18) is decisive:
`
`[Mr. DURBIN]. [S]ome companies that possess patents categorized
`by the PTO as class 705 business method patents have used the
`patents to develop novel software tools and graphical user
`interfaces that have been widely commercialized and used within
`the electronic trading industry to implement trading and asset
`allocation strategies . . . . Are these the types of patents that are
`the target of Section 18?
`
`[Mr. SCHUMER]. No. Patent holders who have generated productive
`inventions and have provided large numbers of American workers
`with good jobs through the development and commercialization of
`those patents are not the ones that have created the business method
`patent problem. While merely having employees and conducting
`business would not disqualify a patent-holder from Section 18
`review, generally speaking, it is not the understanding of Congress
`that such patents would be reviewed and invalidated under Section
`18. 160 Cong. Rec. S5428 (Sept. 8, 2011) (emphasis added).
`
`15 AIA Sec. 18 (emphasis added).
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`[Mr. DURBIN.] . . . Examples of such patent-protected products
`include machinery that counts, sorts or authenticates currency
`and paper instruments, and novel software tools and graphical
`user interfaces that are used by electronic trading industry
`workers to implement trading or asset allocation strategies.
`Vibrant industries have developed around the production and sale of
`these tangible inventions, and I appreciate that patents protecting such
`job-creating products are not understood to be the target of section
`18. Id. at S5433 (emphasis added).
`
`[Mr. DURBIN.] I am confident that the PTO will keep this in mind as
`it works to craft regulations implementing the technological invention
`exception to section 18. I also expect the PTO to keep in mind as it
`crafts these regulations Congress’s understanding that legitimate and
`job-creating technological patents such as those protecting the novel
`electronic trading software tools and graphical user interfaces
`discussed above are not the target of section 18. Id. at S5433.
`
`This exchange was not controversial and no contrary statements appear in the AIA’s
`legislative history. The purpose of the CBM process was to deal with allegedly suspect patents that
`the PTO was ill equipped to examine because the invention lay in a general business practice where
`there was little published prior art at the time. See 160 Cong. Rec. S1363 (Mar. 8, 2011) (statement
`of Senator Schumer) (“Business method patents are the bane of the patent world . . . . State Street
`[Bank & Trust Co. v. Signature Financial Group] launched an avalanche of patent applications
`seeking protecting for common business practices. The quality of these business method patents has
`been much lower than that of other patents . . . . [I]nformation about methods of conducting
`business, unlike information about other patents, is often not documented in patents or published in
`journals.”). CBM reviews, an extraordinary form of relief, are to be applied only to covered
`business method patents. Indeed, every example provided by Senator Schumer of patents subject to
`Section 18 involves claims whose alleged inventive aspect is directed to some aspect of a business
`method or practice. See 160 Cong. Rec. S5432.
`
`TT’s patents are not business method patents—they are directed to structural and functional
`features of a GUI tool that the express language of the statute and the legislative history excludes
`from CBM proceedings.16 TT argued that its patents are not CBM patents in TD Ameritrade’s
`CBM proceedings—an example of TT’s arguments are in the Patent Owner's Preliminary Response
`attached as Attachment D. Unfortunately, the PTAB instituted some of TD’s petitions, preliminarily
`disagreeing with TT’s position. Because TD’s proceedings were terminated as a result of
`settlement, neither the PTAB nor Federal Circuit finally determined this issue. However, the fact
`that a petitioner was able to even preliminarily persuade one PTAB panel to institute CBM
`proceedings for patents so clearly outside of the jurisdictional scope of Section 18 shows the need
`for involvement of the Director on this issue.
`
`To be clear, TT’s argument that its patents are not CBMs is not based on a contention that
`they are not related to a “financial” product or service. TT understands that that PTAB has
`
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`
`
`16 That some of the claims are method claims and some are CRM and system claims is of no
`import. What is important is substance, not form. All of the claims are directed to structural and
`functional features of a GUI tool, regardless of claim format.
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`construed “financial” broadly in its decisions to date. TT’s point is that its patents-in-suit are not
`directed to a business method or operation at all and, therefore, not subject to Section 18 in the first
`place. Sweeping in these patents under Section 18 would be no different than sweeping in a patent
`directed to technological features of a device such as a calculator. While a calculator can be used
`for financial purposes, such a patent is clearly outside of the purview of Section 18. Also, TT’s
`argument is more than a request for the application of the technological exception (although it
`certainly applies). These patents are outside of the purview of Section 18 in the first instance,
`before consideration of the technological exception is even needed. That is what makes the
`Tradestation petition and the further threatened CBM petitions so outrageous and unique. With the
`exception of the TD Ameritrade proceedings, TT is not aware of any other CBM proceedings
`involving similar patents that are not directed in any way to a business method or operation. Put
`another way, to TT’s knowledge all other patents that have been subject to CBM proceedings have
`been directed to an invention in which the alleged innovation lied at least in part in a business
`method or operation.17
`
`That TT’s patents are not CBM patents also presents an important public policy issue—
`ensuring the PTAB stays within its statutory bounds in clear-cut cases. This issue is particularly
`important to TT because its viability depends on these types of patents and the law should be clear
`so that parties do not even attempt to file CBM proceedings against these types of patents. TT needs
`to be able to rely on these important mature assets (on which it has conducted business for the last
`15 years) as property rights, not perpetually pending patent applications.
`
`TT believes that once the issues are understood, these types of patents are without a doubt
`outside of the jurisdiction of Section 18. You are especially qualified to consider this issue and
`apply these safeguards, based on your technical background and experience in the area of GUIs.
`This background gives you the ability to intuitively and immediately understand the difference
`between a patent directed to particular technological features of an innovative GUI tool—like
`TT’s—and a patent that merely recites a generic step of displaying information.
`
`If defendants’ serial and delayed CBMs directed to patents that are clearly not even CBMs
`cannot be disposed of before TT is required to file preliminary responses, TT will face enormous
`costs and fees fighting these proceedings. We would appreciate the opportunity to discuss this
`further with you. Tradestation and the other remaining defendants are also welcome at this
`discussion.
`
`Sincerely,
`
`Steven F. Borsand
`Executive Vice President, Intellectual Property
`Trading Technologies International, Inc.
`
`
`
`
`
`
`
`
`17 While the details are not discussed in this letter, the decision of Judge Coleman finding that the
`’304 and ’132 patents claim eligible subject matter summarizes some of the reasons how the patents
`expressly describe a technical problem with the prior art and claim a solution to that problem. See
`Attachment E. That the claims are directed to technology and purport to solve a problem with prior
`art GUI technology has never been disputed by the defendants.
`
`
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`PAGE 9 OF 11
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`cc:
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`Enclosures:
`A. Trading Techs. Int’l, Inc. v. BGC Partners, Inc., No. 1:10-cv-715 (N.D. Ill), Dkt. 609
`B. Trading Techs. Int’l, Inc. v. BGC Partners, Inc., No. 1:10-cv-715 (N.D. Ill), Dkt. 613
`C. Petition for Covered Business Method Review, CBM2015-00161
`D. Patent Owner's Preliminary Response, CBM2015-00136
`E. Trading Techs. Int’l, Inc. v. CQG, Inc. et. al., N