Jay Q. Knobloch
`Director of IP Licensing & Litigation
`Trading Technologies International, Inc.
`Direct line: 312.698.6497
`jay.knobloch@tradingtechnologies.com
`
`October 23, 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, Virginia 22314
`
`Re: Continued Abuse of Post-Grant Review Process
`
`Dear Director Lee:
`Since our initial letter dated August 10, 2015 regarding CBM2015-00161 (“First Letter”), CQG,
`Interactive Brokers Group (“IBG”) and TradeStation have made good on their promise to file more
`CBM petitions against TT’s patents. So far, they have filed four additional CBM petitions since our
`First Letter:1
`(cid:120) On August 12, TradeStation filed CBM2015-00172 against the ’556 patent.
`(cid:120) On September 2, IBG, TradeStation, and CQG jointly filed CBM2015-00179 against the
`’056 patent.2
`(cid:120) On September 11, IBG and TradeStation jointly filed CBM2015-00181 and CBM2015-
`00182 against the ’411 and ’132 patents, respectively.
`As explained herein, the new filings continue the abuse of the CBM process against GUI patents
`that are clearly not CBM patents as discussed in the First Letter.
`TT and others raised concerns that some would abuse the post grant review process
`provided by the Leahy-Smith America Invents Act (“AIA”) as part of litigation gamesmanship. TT
`discussed this specific concern with former Director Kappos before and shortly after passage of the
`
`
`
`1 There may be more petitions coming as petitioners have stated to the District Court that they plan on
`coordinating to file CBM petitions on “most (if not all)” of the patents-in-suit. Thus, there may be additional
`CBM petitions filed in the near future on some or all of the following 11 U.S. Patent Nos.: 7,127,424;
`7,212,999; 7,412,416; 7,567,929; 7,680,724; 7,685,055; 7,693,768; 7,702,566; 7,725,382; 7,813,996, and
`7,904,374.
`2 An anonymous reexamination was also filed the same day against the ‘056 patent (Reexamination Control
`No. 90/013,578) that asserts one of the same alleged prior art grounds and contains very similar language.
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`Page 1 of 8
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`TRADING TECH EXHIBIT 2014
`TRADESTATION v TRADING TECH
`CBM2015-00161
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`AIA. He assured us that petitioners would not be incented to pursue such improper tactics and
`informed us that the Director had discretion to prevent such abuse. Consistent with this, the USPTO
`recently issued a study and report to Congress on the implementation of the Leahy-Smith America
`Invents Act in which states:
`To protect parties from harassment, the AIA required the USPTO to establish regulations
`prescribing sanctions for abuse of discovery, abuse of process, and any other improper use
`of the proceeding. Further, the AIA protects patent owners from unwarranted multiple
`proceedings by providing that the Director may reject the petition because the same or
`substantially same prior art or arguments previously were presented to the USPTO.
`
`Study and Report to Congress on the Implementation of the Leahy-Smith America Invents Act,
`September 2015, 38-39 (emphasis added). TT submits that the petitions discussed in this and our
`First Letter represent the very type of conduct contemplated by the AIA’s provision of discretion to
`the Director.
`As explained below, the new petitions merit your attention for the same reasons set forth in
`the First Letter:
`(1)
`the new petitions represent a continuation of the abusive litigation tactics and
`gamesmanship; and
`all of the patents challenged in the new petitions claim new and specific features and
`functionality of a GUI—putting them outside the statutory jurisdiction of Section 18.
`Recently, the Federal Circuit held that jurisdictional issues are the only decisions on institution that
`can be appealed because it goes to the USPTO’s very authority under the AIA. Versata Dev. Grp.,
`Inc. v. SAP Am. Inc., 793 F.3d 1306, 1319-24 (Fed. Cir. 2015) (finding whether a patent qualifies as
`a CBM is a “defining characteristic” of the USPTO’s “authority to invalidate” because it subjects a
`patent “to a special [USPTO] power to invalidate.”); See also Achates Reference Publ’g, Inc. v.
`Apple Inc., Nos. 2014-1767, 2014-1788, 2015 WL 5711943, at *6 (Fed. Cir. Sept. 30, 2015). For
`
`(2)
`
`the same reason, this important threshold jurisdictional issue merits the Director’s attention.
`
`Accordingly, TT respectfully requests that you exercise your discretion as Director
`(pursuant to, inter alia, 35 U.S.C. §§ 324-325 and 37 C.F.R. § 42.208) to promptly deny institution
`of all of these improper and abusive petitions. By halting this abusive behavior, you will protect TT
`from having to unfairly spend millions of dollars more defending against improper litigation tactics.
`To date, TT has already been forced to expend significant resources defending its GUI patents in 12
`different CBM proceedings (the previous 7 from TD Ameritrade and CQG and the current 5
`discussed herein). Further, and perhaps most importantly, rejecting these abusive petitions will set a
`precedent discouraging improper use of the post-grant review procedures.
`
`PETITIONERS HAVE NOT RESPONDED TO TT’S FIRST LETTER
`Before addressing the new petitions, TT notes that none of the petitioners have submitted a
`substantive response to our First Letter. The only response was a failed attempt by TradeStation to
`have the PTAB panel sanction TT for sending the First Letter. See CBM2015-00161, Paper 8
`(P.T.A.B. Aug. 24, 2015).3 TT submits that the petitioners’ silence on the substance of our First
`Letter is due to petitioners having no meritorious response.
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`3 TT does not believe there is anything improper about this or our First Letter. Anyone is permitted to
`communicate with the Director on any issue, including issues over which the statute specifically provides
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`(cid:120)
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`THE NEW PETITIONS CONTINUE THE LITIGATION GAMESMANSHIP DISCUSSED
`IN THE FIRST LETTER
`As discussed in our First Letter, the petitioners’ actions are litigation gamesmanship
`intended to abuse and harass TT. The petitioners have intentionally delayed the filing of these CBM
`petitions (for years) while taking a “wait and see” approach based on events in the district court
`litigation and other CBM filings. This intentional, multi-year delay for each of the new CBM
`petitions is summarized below:
`’411 and ’132 Patents (CBM2015-00181 and CBM2015-00182):
`(cid:120)
`o Waited Almost 3 Years to File. TT filed its infringement complaint against IBG on
`February 3, 2010 and TradeStation on February 9, 2010. The CBM program was
`available to both of these parties on September 16, 2012. IBG and TradeStation filed
`CBM2015-00181 and CBM2015-00182 on September 11, 2015. Therefore, they
`waited almost 3 years (1091 days) to file petitions against these patents. Defendant
`CQG did not join in either of these petitions.
`o Did Not Join TDA CBM Petitions. IBG and TradeStation had the opportunity to
`join the substantially identical TD Ameritrade CBM petitions against the ’411 and
`’132 patents on May 19, 2014. They knowingly chose to not join. Notably, these
`new petitions make prior art arguments that are very similar to prior art grounds on
`which the PTAB denied institution in the previous CBMs filed by TD Ameritrade
`against the ’132, ’304 and ’411 patent. See CBM2014-00135, Paper 19 (P.T.A.B.
`Dec. 2, 2014) (’132 patent); CBM2014-00136, Paper 19 (P.T.A.B. Dec. 2, 2014)
`(’304 patent); CBM2014-00133, Paper 19 (P.T.A.B. Dec. 2, 2014) (’411 patent).
`o Did Not Join CQG CBM Petitions. IBG and TradeStation had the opportunity to
`join the CQG CBM petitions against the ’132 patent on January 9, 2015. They
`knowingly chose to not join.4
`‘056 Patent (CBM2015-00179):
`o Waited Almost 3 Years to File. TT filed its infringement complaints against CQG
`and IBG on February 3, 2010 and TradeStation on February 9, 2010. The CBM
`program was available to all of these parties on September 16, 2012. The petitioners
`filed CBM2015-00179 on September 2, 2015. Therefore, they waited almost 3 years
`(1081 days) to file a petition against this patent.
`o Did Not Join TDA CBM Petition. IBG, CQG, and TradeStation had the
`opportunity to join the substantially identical TD Ameritrade CBM petition against
`the ’056 patent on May 19, 2014. They knowingly chose to not join.
`‘556 patent (CBM2015-00172):
`o Waited Almost 3 Full Years to File. TT filed its infringement complaint against
`TradeStation on February 9, 2010. The CBM program was available to TradeStation
`on September 16, 2012. TradeStation filed CBM2015-00172 on August 10, 2015.
`
`(cid:120)
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`
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`discretion to the Director. TT has copied petitioners’ counsel on both this letter and the First Letter. Neither
`letter constitutes a replacement for TT’s preliminary response in any proceeding. If necessary, TT intends
`exercise its statutory right to file preliminary responses to petitioners’ various petitions. The preliminary
`responses may contain some of the arguments set forth in these letters as well as additional arguments that
`have not been raised in the letters that TT did not feel rise to the level of meriting Director attention at this
`time. Please advise us if you believe there is anything improper about TT sending these letters.
`4 The PTAB denied institution of the CQG petitions finding that CQG is barred by its previously filed
`declaratory judgment action. CBM2015-00057, Paper 12 (P.TA.B. July 10, 2015). Recently, the PTAB
`denied CQG’s request for rehearing on this issue. CBM2015-00057, Paper 15 (P.T.A.B. Sept. 16, 2015)
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`Therefore, they waited almost 3 full years (1059 days) to file a petition against this
`patent. Neither IBG nor CQG joined this petition. While this is the first petition filed
`against the ’556 patent, it is clear that TradeStation intentionally delayed in filing
`this petition. In addition, TradeStation and the other defendants successfully argued
`that the district court should stay the entire court proceedings (involving the ’556
`patent and ten additional patents) based on the 5 petitions filed by TD Ameritrade in
`May of 2014 by arguing that the 5 challenged patents “go to the heart of this case”
`and that the unchallenged patents “are in the same patent families” or are
`“technologically related.” Memorandum in Support for Motion to Stay, at 9, Trading
`Techs. Int’l, Inc. v. BCG Partners, Inc., No. 1:10-cv-00715, Dkt. No. 546 (May 22,
`2014) (Attachment I); TradeStation Joins Motion for Stay, Trading Techs. Int’l, Inc.
`v. BCG Partners, Inc., No. 1:10-cv-00715, Dkt. No. 558 (June 11, 2014)
`(Attachment J).5.
`In addition to the above-identified new petitions, on the same day that CBM2015-00179
`regarding the ’056 patent was filed (September 2, 2015), an anonymous reexamination request was
`also filed against the ’056 patent (Reexamination Control No. 90/013,578). The ’056 reexamination
`request sets forth one of the prior art grounds asserted in the earlier TD Ameritrade petition
`(CBM2014-00131) and in the contemporaneously filed CBM2015-00179 petition.6 Also, the ’056
`reexamination request uses very similar language and many of the same exhibits and expert reports
`used in the petitions for CBM2014-00131 and CBM2015-00179. Given the similarity of the
`arguments and the fact that the ’056 reexamination request was filed on the same day as the ’056
`CBM petition, TT submits that the ’056 reexamination request is also part of the defendants’
`abusive strategies (prepared by one or more of the petitioners or an entity coordinating with them).
`For these reasons, TT also requests that you exercise your discretion under 35 U.S.C. § 325(d) and
`MPEP 2286.01 to terminate this reexamination proceeding.
`It is also important to note that all of the grounds raised in the above-identified petitions and
`the ’056 reexamination request, as well as the petition for CBM2015-00161 that was the subject of
`our First Letter, are grounds that have been known to the petitioners since the beginning of the
`litigation years ago—they do not contain any newly-discovered grounds that merit a post-grant
`
`review proceeding to challenge the patents.7
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`5 TT realized that it inadvertently did not attach several documents cited in its First Letter. Accordingly, the
`following documents from Trading Techs. Int’l, Inc. v. BCG Partners, Inc., No. 1:10-cv-00715 (N.D. Ill.)
`are attached hereto: Dkt. No. 543, cited in footnote 11 of the First Letter, is attached as Attachment K; Dkt
`No. 617, cited in footnote 13 of the First Letter, is attached as Attachment L. Also, Dkt. No. 876 from
`Trading Techs. Int’l, Inc. v. CQG, Inc. et al., No. 1:05-cv-04811 (N.D. Ill.), which was cited in footnote 14
`of the First letter, is attached as Attachment M.
`6 The petition in CBM2015-00179 raises the same primary alleged prior art but also raises one additional
`secondary reference. However, the arguments are substantially the same.
`7 There are additional reasons why petitioners’ actions constitute abuse. For example, two of the new
`petitions (CBM2015-00181 and -00182) request that the patents be invalidated based on prior art grounds
`already considered by the USPTO. Importantly, petitioners know that the USPTO allowed the claims of
`these patents (multiple times in examinations, quality review and reexaminations) over closer and more
`relevant art than the art presented in the petitions. The petitioners also know, or should know, that the claims
`have been upheld after multiple litigation challenges based on that same closer and more relevant art that
`was considered by the USPTO. Yet, these petitions do not mention the history at the USPTO or in litigation
`(aside from merely acknowledging the fact that there was a reexamination). TT respectfully submits that (1)
`the fact that the petitions pursue lesser prior art grounds than what has already been considered and (2)
`petitioners’ lack of transparency each independently justify a denial of institution. The post-grant review
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`THE PATENTS SUBJECT TO THE NEW PETITIONS ARE DIRECTED TO GUI
`TECHNOLOGY AND ARE CLEARLY NOT COVERED BUSINESS METHOD PATENTS
`For the same reasons set forth in our First Letter, the patents attacked by the petitioners’
`latest round of CBM petitions are not within the jurisdictional scope of Section 18. The claims of
`each of these patents are directed to technology – particular structural and functional features of
`GUI tools. The claims are not directed to performing a business method or practice on a
`conventional computer or using a generic display. In fact, the claims are not directed to business
`methods or business practices in any way. Rather, they are directed to particular features of a GUI
`and the claims were found by the USPTO (multiple times) to be novel and non-obvious over other
`GUI prior art based on the claimed GUI features – not based on alleged innovations in the steps of a
`business process or practice.
`A. The claims of the ’132, ’304 and ’411 patents are directed to structural and functional
`technological features of a GUI tool, not to a business method or practice.
`As an example, we will briefly address the particular claimed features of the ’132, ’304, and
`’411 patents, which are the subject of CBM2015-00182, -00161 and 00181 respectively. The ’304
`and ’411 patents are continuations of the ’132 patent and share the same specification. The
`independent claims of all three patents are directed to a combination of features of a GUI, an
`embodiment of which is shown in Figures 3 and 4 of the specification, reproduced below:
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`proceedings were touted as providing the advantage to patent owners of a “gold-plated” patent if the patent
`is ultimately upheld. This was based on the estoppel provisions and on the assumption that petitioners would
`bring their best arguments to the PTAB and not use the proceedings as petitioners are to seek delay, harass
`TT and seek a second “bite of the apple” on previously rejected arguments that are less relevant than what
`the USPTO already considered. By advancing only lesser grounds, the petitioners avoid any real
`consequence of the AIA’s estoppel provisions because estoppel only applies to the arguments in the
`petitions. The lesser prior art grounds of these petitions are throwaway arguments that would not be raised in
`the litigation. Indeed, in the recent trial regarding the ’132/’304 patents, CQG did not even raise a prior art
`invalidity defense. In TT’s discussions with former Director Kappos before and after passage of the AIA,
`this issue was specifically discussed and it was agreed that tactics of raising lesser arguments would be
`improper and outside the spirit of the law. TT was informed that this concern was one of the reasons why the
`Director has discretion to deny institution of or terminate any post-grant review proceeding.
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`Figures 3 and 4 show an embodiment of the claimed invention at two times (T1 and T2),
`just before and after a change in the inside market (the best bid and best ask price). As seen in these
`figures, the GUI includes a price axis with a range of price levels displayed in column 1005. The
`GUI also provides dynamic displays of bid and ask indicators that are displayed in regions with
`locations corresponding to the levels of the price axis (column 1003 for bids and column 1004 for
`asks). The best bid indicator represents quantity available in the market at the current best bid price
`(the highest bid/buy price) and the best ask indicator represents quantity available in the market at
`the current best ask price (the lowest ask/sell price). In Figure 3, the price levels representing the
`current inside market are labeled with reference number 1020. The best bid indicator represents a
`quantity of 18 at the price level of 89 and the best ask indicator represents a quantity of 20 at the
`price level of 90.
`The GUI also provides locations corresponding to different price levels of the price axis that
`can be selected by a single action of a user input device to both set a plurality of order parameters
`(e.g., the price and type of the order) and to send an order to an exchange. In particular, in the
`shown embodiment, the cells of the dynamic bid column 1003 are configured to receive single
`action commands that both set the price and that the order is a buy order and send the buy order to
`the exchange. Likewise, the cells of the dynamic ask column 1004 are configured to receive single
`action commands that both set the price and that the order is a sell order and send the sell order to
`the exchange. For shorthand, we use the phrase “single action order entry” to refer to the feature of
`providing order entry locations corresponding to price levels of the price axis that can be selected
`by a single action of a user input device to set a plurality of order parameters and send an order to
`the electronic exchange.
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`Figure 4 displays information for the same tradeable object at a later time when, in response
`to market updates, the inside market indicators moved up such that the best bid price is now 92 and
`the best ask price is now 93. The inside market indicators moved relative to the price axis between
`T1 and T2 and the price levels of the price column remained fixed. Unlike conventional prior art
`screens of the sort shown in Figure 2 of the patents, if the user clicked to send an order at the very
`moment the market changed with the illustrated embodiment of the invention, the user’s order
`would have been entered at his/her intended price because the order entry location remained
`associated with the same price level.
`The independent claims of the ’132, ’304 and ’411 patents are directed to this combination
`of features and it was this combination of features that was the very reason for allowance during the
`original examination and later reexaminations. For example, claim 1 of the ’132 patent claims, inter
`alia, the combination of a static display of prices, a dynamic display of bids and asks aligned with
`the static display of prices and single action order entry. Claim 1 of the ’304 patent claims, inter
`alia, the combination of a static price axis, dynamically displaying best bid and ask indicators in bid
`and ask display regions respectively, such bid/ask display regions having locations corresponding to
`price levels of the static price axis and single action order entry. Claim 1 of the ’411 patent claims,
`inter alia, the combination of a price axis, displaying bid and ask display regions each having
`locations corresponding to a different price level along the price axis, dynamically displaying best
`bid and ask indicators in locations of the bid and ask display regions respectively such that when
`market information is received indicating a new best bid or ask price, the best bid or ask indicators
`move relative to the price axis to a different location in the bid or ask display regions, and single
`action order entry.
`The claimed combination of features of these patents is not directed in any way to a
`business method or practice. For example, they are not merely claiming trading or a specific
`strategy for trading and implementing such a process on a generic computer with a generic display.
`Rather, the claims are specifically directed to particular GUI features and functionality. Trading,
`which is only referenced in the preamble of the claims, is merely the context and application for the
`claimed technology and incidental to the heart of the claims. These claims are no more directed to a
`business practice than claims directed to an improved instrument panel in an airplane are directed to
`the process of flying. Accordingly, TT submits that these claims do not qualify as CBM patents on
`their face. Of course, being that they are directed to technology, the claims also meet the
`technological exception—but that exception should not even need to be reached. The exception is
`designed for patents that at some level are directed to business methods or practices but that add
`sufficient technology to be exempted from coverage by Section 18. The ’132, ’304 and ’411 patent
`claims, in contrast, do not even enter that realm.
`B. This jurisdictional issue merits the Director’s attention for the same reasons that the
`Federal Circuit singled it out as the one institution-related issue that can be appealed.
`Recently, the Federal Circuit has set forth the boundaries of what can and cannot be
`appealed with respect to a PTAB institution decision. While the Federal Circuit established the rule
`that the PTAB’s reasons for institution are generally not appealable (In re Cuozzo Speed Techs.,
`LLC, 793 F.3d 1268 (Fed. Cir. 2015)), the Federal Circuit did rule that the only appealable decision
`made during institution is whether a patent in fact qualifies as a CBM because such an issue goes to
`the very authority of the PTAB under the AIA statute (i.e., it is a threshold jurisdictional issues).
`Versata, 793 F.3d at 1319-24. TT submits that this jurisdictional issue, as it relates to the petitions
`filed against TT’s patents, merits the Director’s attention for the same reasons that the Federal
`Circuit singled out the issue as the one institution-related issue that can be appealed. The issue goes
`to the very authority of the PTAB in the first instance and uniformity and predictability on that
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`issue is important.
`
`As set forth above, TT’s GUI-related patents are being continually attacked using the CBM
`process. If you agree with TT that these patents are clearly outside the boundaries of the scope of
`Section 18, TT respectfully submits you should exercise your discretion to dismiss these petitions
`now. This will set a precedent against continued misuse of the CBM process against patents that are
`clearly outside the jurisdictional boundaries of Section 18. It will also avoid unnecessary work and
`expense on the part of both the parties and the PTAB and the risk of an incorrect decision and
`expensive appeal.8
`
`CONCLUSION
`
`The petitions filed to date already impose a significant burden on TT for the next couple of
`months. Preliminary responses are due as follows: CBM2015-00161 (October 29), CBM2015-
`00172 (November 16), CBM20l5—00l79 (December 1), CBM20l5 -001 82 (December 21) and
`CBM20l5-00181 (December 30).
`As set forth above and in our First Letter, there are multiple reasons that justify you
`exercising your discretion to put an end to the CBM petitions and the reexamination identified
`above. These petitions represent exactly the type of behavior contemplated by the AIA’s provision
`of discretion to the Director. TT should not have to unnecessarily incur the significant expenses
`(both in terms of time and money) imposed by these petitions. Accordingly, TT respectfully
`requests that the USPTO promptly deny institution of each of the CBM petitions and terminate the
`‘056 reexamination.
`
`Sincerely,
`
`ttgcha KW
`
`ay Q. K
`Director of IP Licensing & Litigation
`Trading Technologies International, Inc.
`
`Enclosures:
`
`I. Trading Techs. Int ’l, Inc. v. BCG Partners, Inc., No. 1:10-cv-715 (N.D. Ill), Dkt. 546
`J. Trading Techs. Int ’l, Inc. v. BCG Partners, Inc., No. 1:10-cv-715 (N.D. Ill), Dkt. 558
`K. Trading Techs. Int 7, Inc. v. BCG Partners, Inc., No. 1:10-cv-715 (N.D. Ill), Dkt. 543
`L. Trading Techs. Int ’l, Inc. v. BCG Partners, Inc., No. 1:10-cv-715 (N.D. Ill), Dkt. 617
`M. Trading Techs. Int ’I, Inc. v. BCG Partners, Inc., No. 1:10-cv-715 (N.D. Ill), Dkt. 876
`
`cc:
`
`John C. Phillips (phi1lips@fr.com);
`Robert E. Sokohl (rsokohl@skgf.com);
`Erika H. Amer (erika.arner@finnegan.com);
`Andrew Byrnes, Chief of Staff for the United States Patent and Trademark Office (PTO);
`Steven F. Borsand (steve.borsand@tradingtechnologies.com).
`
`8 TT recognizes that you could also exercise your discretion to dismiss a proceeding after an incorrect
`institution decision. However, in such an event the parties and PTAB would have already been forced to
`unnecessarily expend resources on both the threshold CBM issue as well as other issues.
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