`
`IN THE UNITED STATES PATENT TRIAL & APPEAL BOARD
`
`
`
`TRADESTATION GROUP, INC. AND
`TRADESTATION SECURITIES, INC.
`
`Petitioners,
`
`v.
`
`TRADING TECHNOLOGIES INTERNATIONAL, INC.
`
`Patent Owner
`
`
`U.S. Patent No. 7,783,556
`
`
`
`
`PETITION FOR COVERED BUSINESS METHOD REVIEW UNDER 35
`U.S.C. § 321 AND § 18 OF THE LEAHY-SMITH AMERICA INVENTS ACT
`
`
`
`
`
`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`U.S. Patent & Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`

`

`
`
`Attorney Docket No. 41919-0002CP1
`CBMR of U.S. Patent No. 7,783,556
`
`TABLE OF CONTENTS
`INTRODUCTION ........................................................................................... 1
`I.
`II. MANDATORY NOTICES UNDER 37 C.F.R. § 42.8(b) .............................. 2
`A. Real-Parties-In-Interest .................................................................................... 2
`B. Related Matters ................................................................................................ 2
`C. Lead and Back-Up Counsel ............................................................................. 3
`III. PAYMENT OF FEES ..................................................................................... 3
`IV. SUMMARY OF THE ’556 PATENT ............................................................. 4
`A. Subject Matter Background ............................................................................. 4
`B. The ’556 Patent Specification .......................................................................... 5
`C. The ’556 patent Claims .................................................................................. 10
`V. GROUNDS FOR STANDING ...................................................................... 14
`A. The ’556 Patent Is Directed to a Covered Business Method ......................... 15
`B. The ’556 Patent Is Not Directed to a Technological Invention ..................... 19
`VI. CLAIM CONSTRUCTION UNDER 37 C.F.R. § 42.304(b)(3) .................. 23
`A. Broadest Reasonable Interpretation ............................................................... 23
`1.
`“Computer readable Medium” ....................................................... 24
`VII. CHALLENGE AND RELIEF REQUESTED............................................... 24
`VIII. IT IS MORE LIKELY THAN NOT THAT AT LEAST ONE CLAIM OF
`THE ’556 PATENT IS UNPATENTABLE .................................................. 25
`A. GROUND 1: Claims 1-22 Are Patent-Ineligible Under 35 USC § 101........ 25
`1.
`The ’556 patent claims are directed to an abstract idea ................. 27
`2.
`The ’556 patent claim elements – either separately or as an ordered
`combination – do not include “significantly more” than the abstract
`concept ........................................................................................... 30
`The ’556 patent claims are neither tied to a “particular machine”
`nor do they “transform a particular article into a different state or
`thing” .............................................................................................. 32
`The dependent claims also are patent ineligible ............................ 34
`Finding the ’556 patent claims patent ineligible is consistent with
`post-Alice Federal Circuit case law ................................................ 36
`(a) Versata Dev. Group, Inc. v. SAP Am., Inc., slip op. (Fed.
`Cir. July 9, 2015) ............................................................................ 36
`(b) OIP Technologies, Inc. v. Amazon.com, Inc., slip op. (Fed.
`Cir. June 11, 2015) ......................................................................... 38
`
`4.
`5.
`
`3.
`
`i
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`

`

`Attorney Docket No. 41919-0002CP1
`CBMR of U.S. Patent No. 7,783,556
`
`Internet Patents Corp. v. Active Network, Inc., slip op. (Fed.
`(c)
`Cir. June 23, 2015) ......................................................................... 40
`(d) Ultramercial, LLC v. Hulu, LLC, 772 F.3d 709 (Fed. Cir.
`2014) 41
`(e) DDR Holdings, LLC v. Hotels.com L.P., 773 F.3d 1245
`(Fed. Cir. 2014) .............................................................................. 43
`B. GROUND 2: Claims 12-22 Are Outside the Four Permissible Statutory
`Classes of Patentable Subject Matter ............................................................ 46
`C. CONCLUSION .............................................................................................. 48
`
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`ii
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`
`
`TS-1001
`
`TS-1002
`
`TS-1003
`
`TS-1004
`
`TS-1005
`
`TS-1006
`
`TS-1007
`
`TS-1008
`
`TS-1009
`
`TS-1010
`
`TS-1011
`
`TS-1012
`
`TS-1013
`
`TS-1014
`
`
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`Attorney Docket No. 41919-0002CP1
`CBMR of U.S. Patent No. 7,783,556
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`EXHIBITS
`
`U.S. Patent No. 7,783,556 to Scott F. Singer, et al. (“’556
`patent”)
`
`
`Prosecution History of the ’556 patent
`
`Lodewijk Petram, “The World’s First Stock Exchange.”
`
`Ellen Terrell, “History of the American and NASDAQ
`Stock Exchanges”, September, 2006 (Updated October,
`2012)
`
`U.S. Patent 6,317,728 (Kane)
`
`Case No. 10-cv-0715 (N.D. Ill.) (Complaint for Patent
`Infringement).
`
`CRS Advanced Technologies, Inc. v. Frontline Technolo-
`gies, Inc., CBM2012-00005, Paper No. 17 (Jan. 23,
`2013)
`
`157 Cong. Rec. S5402 (daily ed. Sept. 8, 2011)
`
`SAP v. Versata, CBM2012-00001, Paper No. 36 (Jan. 9,
`2013)
`
`The American Heritage Dictionary of the English Lan-
`guage, 4th Ed.
`
`The American Heritage Dictionary of the English Lan-
`guage, 3d Ed.
`
`MPEP 2106
`
`Patent Trial Practice Guide
`
`Volusion, Inc. v. Versata Software, Inc., CBM2013-
`00018, Institution Decision, Paper No. 8
`
`iii
`
`

`

`
`
`Attorney Docket No. 41919-0002CP1
`CBMR of U.S. Patent No. 7,783,556
`
`INTRODUCTION
`
`I.
`TradeStation Group, Inc. and TradeStation Securities, Inc. (collectively, “Pe-
`
`titioners” or “TradeStation”) petition for Covered Business Method (“CBM”) Re-
`
`view of claims 1-22 (“the CBM Claims”) of U.S. Patent No. 7,783,556 (“’556 pa-
`
`tent”; TS-1001), which is owned by Trading Technologies International, Inc. (“Pa-
`
`tent Owner” or “TT”). As explained in this petition, it is more likely than not that
`
`at least one claim of the ’556 patent is invalid under 35 U.S.C. § 101 as being di-
`
`rected to patent ineligible subject matter.
`
`Generally speaking, the ’556 patent relates to a business method for display-
`
`ing market information to a financial trader using a computing device. The ’556
`
`patent admits that the basic idea of using a computer having a graphical user inter-
`
`face (“GUI”) to display and update market information, and otherwise enable a
`
`trader to interact with an electronic financial exchange, was well known. (TS-1001,
`
`’556 patent at Figs. 1-2 and 1:52-2:17) The purported invention of the ’556 patent
`
`was simply to add another item of well-known financial information – namely, the
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`profit or loss a trader would incur upon making a particular trade – to an electronic
`
`trading GUI that the patent admits is prior art. (Id.) Providing financial infor-
`
`mation to facilitate market trades – the basic idea of the ’556 patent claims – is “a
`
`fundamental economic practice long prevalent in our system of commerce.” Alice
`
`Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2356 (2014). Adding profit/loss
`
`1
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`

`

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`information to the display is a well-known and trivial modification that does not
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`Attorney Docket No. 41919-0002CP1
`CBMR of U.S. Patent No. 7,783,556
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`add anything of significance to that abstract idea—it is simple math that could be
`
`(and has been for years) performed mentally by a trader. The other claim limita-
`
`tions are similarly devoid of significance. Consequently, the claims of the ’556 pa-
`
`tent are invalid under 35 U.S.C. § 101 because they encompass an abstract idea
`
`without adding “significantly more.” Id. at 2355. Moreover, the ’556 patent claims
`
`fail the machine-or-transformation test in that they are neither “tied to a particular
`
`machine or apparatus” nor do they operate to change articles or materials into a
`
`“different state or thing.” Bilski v. Kappos, 130 S. Ct. at 3218, 3230 (2010).
`
`Petitioner respectfully submits that CBM review should be instituted, and
`
`the challenged claims canceled.
`
`II. MANDATORY NOTICES UNDER 37 C.F.R. § 42.8(b)
`A. Real-Parties-In-Interest
`The real-parties-in-interest are TradeStation Group, Inc., TradeStation Secu-
`
`
`
`rities, Inc., TradeStation Technologies, Inc., and IBFX, Inc., all located at 8050
`
`SW 10th Street, Suite 2000, Plantation, FL 33324.
`
`B. Related Matters
`The ’556 patent is or has been involved in the following proceedings that
`
`may affect, or be affected by, a decision in this proceeding: TRADING TECH-
`
`NOLOGIES INTERNATIONAL, INC. v. OPEN E CRY, LLC, OPTIONSXPRESS
`
`2
`
`

`

`
`HOLDINGS, INC., ROSENTHAL COLLINS GROUP, LLC, TRADESTATION SE-
`
`Attorney Docket No. 41919-0002CP1
`CBMR of U.S. Patent No. 7,783,556
`
`CURITIES, INC., TRADESTATION GROUP, INC., IBG, LLC, TD AMERITRADE,
`
`INC., TD AMERITRADE HOLDING CORP., THINKORSWIM GROUP, INC., IN-
`
`TERACTIVE BROKERS, LLC, CQG, INC., CQGT, LLC, FUTUREPATH TRAD-
`
`ING LLC, SUNGARD DATA SYSTEMS, INC., SUNGARD INVESTMENT VEN-
`
`TURES LLC, GL TRADE AMERICAS, INC., STELLAR TRADING SYSTEMS,
`
`LTD., STELLAR TRADING SYSTEMS, INC., ESPEED MARKETS, LP, BGC CAP-
`
`ITAL MARKETS, LP, ECCOWARE LTD., CUNNINGHAM TRADING SYSTEMS,
`
`LLC, CUNNINGHAM COMMODITIES, LLC, TRADEHELM, INC., Case No. 10-
`
`cv-0715, in the Northern District of Illinois before Judge Virginia M. Kendall.
`
`C. Lead and Back-Up Counsel
`Petitioners provide the following designation of counsel:
`
`LEAD COUNSEL
`John C. Phillips, Reg. No. 35,322
`3200 RBC Plaza
`60 South Sixth Street
`Minneapolis, MN 55402
`T: 858-678-4304
`F: 877-769-7945
`E-mail: phillips@fr.com
`
`BACKUP COUNSEL
`Kevin Su, Reg. No. 57,377
`3200 RBC Plaza
`60 South Sixth Street
`Minneapolis, MN 55402
`T: 617-521-7827
`F: 877-769-7945
`E-mail: CBM41919-0002CP1@fr.com
`
`Please address all correspondence and service to counsel designated above.
`
`Petitioners also consent to electronic service by email at CBM41919-
`
`0002CP1@fr.com.
`
`III. PAYMENT OF FEES
`
`3
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`

`

`
`
`Petitioner authorizes the Patent and Trademark Office to charge Deposit Ac-
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`Attorney Docket No. 41919-0002CP1
`CBMR of U.S. Patent No. 7,783,556
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`count No. 06-1050 for the fee set in 37 C.F.R. § 42.15(b) for this Petition, and fur-
`
`ther authorizes payment for any additional fees to be charged to this Deposit Ac-
`
`count.
`
`
`
`IV. SUMMARY OF THE ’556 PATENT
`
`A.
`
`Subject Matter Background
`
`A financial market is a market in which people trade financial securities,
`
`commodities, and other fungible items of value at prices that reflect supply and de-
`
`mand. Financial markets have been around for a very long time. For example, over
`
`four hundred years ago, in 1602, the Amsterdam market for the Dutch East India
`
`Company effectively became a modern securities market. (TS-1003; Lodewijk Pet-
`
`ram, “The World’s First Stock Exchange.”) Historically, financial markets were
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`physical locations where buyers and sellers met and negotiated in person. Today,
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`however, most financial trading is performed electronically, that is, a trader uses a
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`personal computer connected by a network to an electronic exchange to execute
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`buy or sell transactions with other traders similarly connected to the electronic ex-
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`change.
`
`Electronic trading is many decades old, going back as far as 1971 when
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`NASDAQ set up the first electronic stock market (TS-1004; “History of the Amer-
`
`ican and NASDAQ Stock Exchanges” at p. 3), and has grown ubiquitous in current
`
`4
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`times. Electronic trading mimics traditional, manual trading practices in that sellers
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`Attorney Docket No. 41919-0002CP1
`CBMR of U.S. Patent No. 7,783,556
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`post “ask” (or “offer”) prices for a specified quantity of items, and potential buyers
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`post “bid” prices, indicating how much they are willing to pay for a specified quan-
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`tity of items. These bid and ask prices, and their respective quantities, are pre-
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`sented to all market participants – i.e., traders – in order to match up buyers with
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`sellers so that trades can be transacted.
`
`The self-evident purpose of trading is, of course, to make a profit, e.g., by
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`buying a stock at a first, lower price and then subsequently selling it at a second,
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`higher price. Inevitably, however, traders also occasionally take losses when, e.g.,
`
`circumstances force them to sell a stock at a price lower than the purchase price.
`
`Given that making profits, and avoiding losses, are the raison d’être of trading,
`
`common sense dictates that keeping track of such profits and losses is of para-
`
`mount concern to traders. Indeed, the prior art expressly discloses keeping track of,
`
`and displaying in a GUI, the profits or losses that would be incurred upon making a
`
`particular trade. (See, e.g., TS-1005; U.S. Patent 6,317,728 (Kane) at Fig. 19 (col-
`
`umn labeled “Delta”) and 6:56-67.)
`
`The ’556 Patent Specification
`
`B.
`In general, the ’556 patent is directed to displaying, within a GUI, a “trading
`
`screen” that provides a user (also referred to as a “trader”) with information to help
`
`facilitate a trade on an electronic exchange. Fig. 2 of the patent, admitted by Patent
`
`5
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`

`

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`Owner to be prior art, shows a conventional trading screen that lacks the additional
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`Attorney Docket No. 41919-0002CP1
`CBMR of U.S. Patent No. 7,783,556
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`profit/loss information provided by Patent Owner’s purported invention.
`
`
`As shown in Fig. 2, the prior art trading screen 200 includes three relevant
`
`portions: a bid column 202, an offer column 204, and a column 206 listing prices
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`(referred to in the patent as a “price axis”) for the “tradeable object” under consid-
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`eration. The numbers in the bid 202 and offer 204 columns correspond to quanti-
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`ties of the tradeable object sought or available, respectively, at the adjacent price in
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`column 206. The box containing the number “5” in the rightmost column corre-
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`sponds to the “Last Traded Quantity,” with its adjacent price level (230) being the
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`“Last Traded Price” (“LTP”).
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`6
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`

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`In the example shown in Fig. 2, the tradeable object has a number of bids
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`Attorney Docket No. 41919-0002CP1
`CBMR of U.S. Patent No. 7,783,556
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`and offers available, any of which a trader can accept “by simply clicking, with a
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`mouse or some other input device, on specific areas of the screen associated with
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`the price values.” (TS-1001; ’556 patent at 2:15-17.) For example, the box con-
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`taining the number “15” in the bid column 202 (annotated with a blue circle) repre-
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`sents a bid (by another market participant) to buy 15 units at $230/unit. Clicking on
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`the box containing “15” would act as acceptance of the bid, meaning that the trader
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`commits to selling 15 units of the tradeable object at $230/unit. Similarly, if the
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`trader clicked on the box containing the number 10 in the offer column 204 (anno-
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`tated with a red circle) it would act as acceptance of the offer to sell 10 units at
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`$232/unit, meaning that the trader agrees to buy 10 units at that price.
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`Upon agreeing to buy a quantity of units of the tradeable object, the trader is
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`said to have opened a “long” position in that tradeable object. (TS-1002; “Re-
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`sponse Filed With Request For Continued Examination” dated Nov. 19, 2009, at p.
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`8.) Conversely, upon agreeing to sell a quantity of units, the trader is said to have
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`opened a “short” position in that tradeable object. (Id.) A trader is said to “close a
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`position” by either buying or selling the same quantity of units as he currently
`
`owns for a long position, or is obligated to sell for a short position, at which point
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`the trader has either made a profit, suffered a loss, or broken even, based on the ini-
`
`tial price at which the trader agreed to buy or sell the tradeable object in question.
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`7
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`

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`For example, if a trader buys 10 units at $125/unit (thereby opening a long posi-
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`Attorney Docket No. 41919-0002CP1
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`tion) and then subsequently sells 10 units at $230/unit (thereby closing the long po-
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`sition), then the trader has made a profit on that position of $1050 (= 10 x ($230 -
`
`$125)).
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`The purported invention of the ’556 patent is simply to add another column
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`to the prior art trading screen 200 indicating “a derivative of price,” which is de-
`
`fined in the patent as “anything that has some dependence on or relationship to
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`price.” (TS-1001, ’556 patent at 3:33-34.) Although the patent specification gener-
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`ally refers to the abstraction of “a derivative or price,” the patent’s claims in fact
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`are limited to one specific price derivative, namely, what the trader’s profit or loss
`
`would be if the trader accepted either a bid or offer at the corresponding price. The
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`triviality of the claimed subject matter is appreciated by comparing the prior art
`
`trading screen 200 of Fig. 2 with the allegedly inventive trading screen shown in
`
`annotated Fig. 8:
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`8
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`Attorney Docket No. 41919-0002CP1
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`Best Ask
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`Best Bid; LTP
`
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`As can be seen, the only difference between the prior art and allegedly inventive
`
`trading screens is the addition of a “value axis” (indicated by the red box in Fig. 8,
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`above), which indicates the profit or loss a trader would incur, relative to a refer-
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`ence point (e.g., the prior day’s closing value), if the trader were to accept a bid or
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`offer at the corresponding price. For example, assuming a reference point of $125
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`for a particular tradeable object (corresponding to a long position previously
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`opened by the trader), if the trader accepted the “best bid” of 15 units at $230/unit
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`(thereby closing the position), then the trader would realize a profit of $105/unit (=
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`230 – 125). In other words, the supposedly inventive “value axis” does nothing
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`9
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`more than perform simple arithmetic, which could be and traditionally was per-
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`Attorney Docket No. 41919-0002CP1
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`formed mentally,1 or using a pen and paper, and display the result on the trading
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`screen.
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`Although the ’556 patent ostensibly is directed to displaying “order infor-
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`mation in relation to a derivative of price,” the patent’s claims are limited to dis-
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`playing one type of “price derivative” information, namely profit or loss (“P/L”)
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`information, which is displayed in the “value axis” in the manner described above.
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`(TS-1001; ’556 patent at 3:33-14, claim 1, claim 12.)
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`C. The ’556 patent Claims
` The ʼ556 patent has 22 claims of which 1 and 12 are independent. Claims
`
`1–11 are directed to a “method for displaying market information on a graphical
`
`user interface,” while claims 12-22 are directed to a “computer readable medium.”
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`Of the two independent claims, claim 1 is representative, and as described above,
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`recites nothing more than displaying well-known financial information on a well-
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`known graphical user interface used in financial trading:
`
`1. A method for displaying market information on a graphical
`user interface, the method comprising:
`[a] receiving by a computing device a current highest bid price
`
`
`1 Indeed, the ’556 patent specification itself recognizes that such “quick mental cal-
`
`culations” were traditionally performed by traders. See ’556 patent at 2:22-25.
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`10
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`Attorney Docket No. 41919-0002CP1
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`and a current lowest ask price for a tradeable object from an electronic
`exchange;
`[b] identifying by the computing device a long or short position
`taken by a user with respect to the tradeable object, wherein the long
`position is associated with a quantity of the tradeable object that has
`been bought by the user at a price, and wherein the short position is
`associated with a quantity of the tradeable object that has been sold by
`the user at a price;
`[c] computing by the computing device a plurality of values
`based on the long or short position, wherein each of the plurality of
`values represents a profit or loss if the long or short position is closed
`at a price level among a range of price levels for the tradeable object;
`[d] displaying via the computing device the plurality of values
`along a value axis;
`[e] displaying via the computing device a first indicator at a
`first location corresponding to a first value along the value axis,
`wherein the first indicator represents a particular price based on any of
`the following prices: current best bid, current best ask, and a last
`traded price, and wherein the first value represents a profit or loss in-
`curred by the user if the long or short position is closed at the particu-
`lar price; and
`[f] moving the first indicator relative to the value axis to a sec-
`ond location corresponding to a second value along the value axis re-
`sponsive to receipt of an update to the particular price, wherein the
`second value represents a profit or loss incurred by the user if the po-
`sition is closed at the update to the particular price.
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`11
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`Attorney Docket No. 41919-0002CP1
`CBMR of U.S. Patent No. 7,783,556
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`Claim 1 tracks the detailed description closely. First, in step [a], a computing
`
`device receives from an electronic exchange a current highest bid price and a cur-
`
`rent lowest ask (offer) price for a particular tradeable object (e.g., a stock).
`
`Next, in step [b], the computing device receives from an electronic exchange
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`information relating to a long position (i.e., a quantity of units of the tradeable ob-
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`ject bought by the user) or to a short position (i.e., a quantity of units of the tradea-
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`ble object sold by the user).
`
`Next, at steps [c] and [d], the computing device computes and displays a
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`Profit or Loss value for each of multiple price levels for the tradeable object. These
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`P/L values correspond to the above-described “value axis” shown in Fig. 8.
`
`Next, at step [e], the computing device displays a “first indicator” at a loca-
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`tion corresponding to particular value along the value axis. The first indicator is re-
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`cited to be one of the “current best bid,” “current best ask” or a “last traded price”
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`(“LTP”). Annotated Fig. 8 above illustrates all three, with the value 232 corre-
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`sponding to the “current best ask” and the value 230 corresponding both to the
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`“current best bid,” and coincidentally, the “last traded price.”
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`Lastly, at step [f], upon receipt of updated market information from the elec-
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`tronic exchange, the computing device updates the display by “moving the first in-
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`dicator” (i.e., either the current best bid value, the current best ask value, or the last
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`12
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`traded price) either up or down relative to the value axis to reflect the updated mar-
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`Attorney Docket No. 41919-0002CP1
`CBMR of U.S. Patent No. 7,783,556
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`ket information.
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`Independent claim 12, which is directed to a “computer readable medium,”
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`although directed to a different statutory class of subject matter, recites the same
`
`method steps as claim 1, and therefore is invalid for the same reasons as claim 1, as
`
`described herein.
`
`The dependent claims – 2–11 and 13–22 – add nothing of significance to
`
`their respective independent claims. For example, claims 2-3 and 13-14 relate to
`
`displaying “an order entry region” that allows a user to place an order “by a single
`
`action of a user input device.” But the ’556 patent admits that single action order-
`
`ing was available in the prior art, e.g., in the prior art trading screen of Fig. 2:
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`“[T]raders may enter orders quickly through trading screen 200 by simply clicking,
`
`with a mouse or some other input device, on specific areas on the screen associated
`
`with the price values.” (TS-1001, ’556 patent at 2:14-17.)
`
`Claims 4–7 and 15–18 merely specify that a “range of values” is displayed
`
`along the value axis, and whether those values represent a profit or a loss is graph-
`
`ically indicated, e.g., by a plus or minus sign in front of a number.
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`Claims 8 and 19 each curiously recites that the “user represents a single
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`trader,” although the significance of that language is unclear.
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`13
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`Claims 9 and 20 each recites “receiving a re-positioning command,” alt-
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`Attorney Docket No. 41919-0002CP1
`CBMR of U.S. Patent No. 7,783,556
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`hough the term “re-positioning” does not appear elsewhere in the patent and noth-
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`ing in the specification explains what is being repositioned or otherwise what it
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`means.
`
`Claims 10 and 21 each essentially recites performing another iteration of the
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`method recited in claim 1 by “identifying a new long or short position taken by the
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`user,” computing a second plurality of values based on the new long or short posi-
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`tion,” and then displaying the second plurality of values along the value axis.
`
`Claims 11 and 22 each essentially recites a “second indicator” selected from
`
`among the “current best bid,” “current best ask” or a “last traded price,” and then
`
`performing another iteration of the method of claim 1 using the second indicator.
`
`In short, nothing in the dependent claims adds significantly more than well-
`
`known conventional subject matter to the basic concept of providing financial in-
`
`formation to facilitate market trades.
`
`V. GROUNDS FOR STANDING
`Petitioners have been sued by Patent Owner for infringement of the ’556 pa-
`
`tent in the following litigation matter: TRADING TECHNOLOGIES INTERNA-
`
`TIONAL, INC. v. OPEN E CRY, LLC, OPTIONSXPRESS HOLDINGS, INC.,
`
`ROSENTHAL COLLINS GROUP, LLC, TRADESTATION SECURITIES, INC.,
`
`14
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`

`

`
`TRADESTATION GROUP, INC., IBG, LLC, TD AMERITRADE, INC., TD AMER-
`
`Attorney Docket No. 41919-0002CP1
`CBMR of U.S. Patent No. 7,783,556
`
`ITRADE HOLDING CORP., THINKORSWIM GROUP, INC., INTERACTIVE
`
`BROKERS, LLC, CQG, INC., CQGT, LLC, FUTUREPATH TRADING LLC,
`
`SUNGARD DATA SYSTEMS, INC., SUNGARD INVESTMENT VENTURES LLC,
`
`GL TRADE AMERICAS, INC., STELLAR TRADING SYSTEMS, LTD., STELLAR
`
`TRADING SYSTEMS, INC., ESPEED MARKETS, LP, BGC CAPITAL MARKETS,
`
`LP, ECCOWARE LTD., CUNNINGHAM TRADING SYSTEMS, LLC, CUNNING-
`
`HAM COMMODITIES, LLC, TRADEHELM, INC., Case No. 10-cv-0715 (N.D.
`
`Ill.) (TS-1006; Complaint for Patent Infringement). Petitioners are not barred or es-
`
`topped from requesting CBM review. As explained below in Section VII, it is more
`
`likely than not that at least one claim of the ’556 patent is invalid under 35 U.S.C.
`
`§ 101. Moreover, the ’556 patent is available for CBM review for the following
`
`reasons.
`
`A. The ’556 Patent Is Directed to a Covered Business Method
`The AIA defines a covered business method patent as “a patent that claims a
`
`method or corresponding apparatus for performing data processing or other opera-
`
`tions used in the practice, administration, or management of a financial product or
`
`service, except that the term does not include patents for technological inventions.”
`
`AIA § 18(d)(1); see also 37 C.F.R. § 42.301. With regard to the “financial product
`
`15
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`

`

`
`or service” requirement, the Board has interpreted this language broadly “to en-
`
`Attorney Docket No. 41919-0002CP1
`CBMR of U.S. Patent No. 7,783,556
`
`compass patents claiming activities that are financial in nature, incidental to finan-
`
`cial activity, or complementary to financial activity.” (TS-1007, CRS Advanced
`
`Technologies, Inc. v. Frontline Technologies, Inc., CBM2012-00005, Paper No. 17
`
`(Jan. 23, 2013).) The legislative history of § 18 provides clear support for that
`
`broad interpretation, and goes further. In that regard, Senator Schumer, co-sponsor
`
`of the AIA, put the following remarks in the legislative record:
`
`The plain meaning of “financial product or service” demonstrates that
`section 18 is not limited to the financial services industry. At its most
`basic, a financial product is an agreement between two parties stipu-
`lating movements of money or other consideration now or in the fu-
`ture.
`(TS-1008; 157 Cong. Rec. S5402 (daily ed. Sept. 8, 2011) (emphasis added).)
`
`Consistent with Senator Schumer’s comments, the Board has made clear that
`
`the term “financial” or equivalent need not appear in the claims or the specification
`
`for the patent to qualify for CBM review. Rather, “[t]he term financial is an adjective
`
`that simply means relating to monetary matters.” (TS-1009, SAP v. Versata,
`
`CBM2012-00001, Paper No. 36 (Jan. 9, 2013) at 23. Therefore, the PTO has broadly
`
`defined the term “covered business method patent” to encompass patents claiming
`
`activities that are financial in nature, incidental to a financial activity or complemen-
`
`tary to a financial activity. See id. at 48735; see also SAP Am., Inc. v. Versata Dev.
`
`16
`
`

`

`
`Grp., Inc., CBM2012-00001, Decision to Institute (Paper No. 36), at p. 23 (P.T.A.B.
`
`Attorney Docket No. 41919-0002CP1
`CBMR of U.S. Patent No. 7,783,556
`
`Jan. 9, 2013), aff’d Versata Dev. Group, Inc. v. SAP Am., Inc., slip op. at 35-36 (Fed.
`
`Cir. July 9, 2015).
`
`The ’556 patent, the underlying purpose of which is to facilitate financial
`
`trades in an electronic market, falls squarely within the category of CBM-eligible
`
`patents directed to financial activity. Indeed, the patent’s title includes the word
`
`“price,” the common definition of which is “[t]he amount as of money or goods,
`
`asked for or given in exchange for something else,” (TS-1010; The American Her-
`
`itage Dictionary of the English Language (4th Ed.)) leaving no doubt that the ’556
`
`patent “relat[es] to monetary matters.” Moreover, each of independent claims 1 and
`
`12 recites a method for receiving market information from an electronic exchange,
`
`including bid prices, ask prices, and last traded prices, and calculating monetary
`
`profits or losses that would be incurred by engaging in particular trading transac-
`
`tions. As such, the claims clearly are directed to financial activity.
`
`And the ’556 patent specification is rife with references demonstrating that
`
`its claims can be applied to “activities that are financial in nature, incidental to fi-
`
`nancial activity, or complementary to financial activity.” For example, the follow-
`
`ing are only two of several such references:
`
` “In one embodiment, electronic exchanges 302, 304, 306 represent elec-
`tronic trading platforms that preferably support electronic transactions of
`
`17
`
`

`

`
`
`Attorney Docket No. 41919-0002CP1
`CBMR of U.S. Patent No. 7,783,556
`
`various kinds of tradeable objects. Examples of more sophisticated elec-
`tronic trading platforms include the London International Financial Futures
`and Options Exchange (LIFFE), the Chicago Board of Trade (CBOT), the
`Chicago Mercantile Exchange (CME), the Exchange Electronic Trading
`(‘Xetra,’ a German stock exchange), and the European Exchange (‘Eurex’).”
`(TS-1001, ’556 patent at 4:13-21.)
` “Each of the electronic exchanges 302, 304, 306 may host one or more com-
`puter-based electronic markets. Traders may connect to the one or more
`electronic markets to trade tradeable objects. As used herein, the term ‘trade-
`able objects,’ refers simply to anything that can be traded with a quantity
`and/or price. It includes, but is not limited to, all types of tradeable objects
`such events, goods and financial products, which can include, for example,
`stocks, options, bonds, futures, currency, and warrants, as well as funds, de-
`rivatives and collections of the foregoing, and all types of commodities, such
`as grains, energy, and metals.” (Id. at 4:29-38; emphasis added.)
`The above-noted references all are inherently financial, and thus necessarily
`
`are “activities that are financial in nature, incidental to financial activity, or com-
`
`plementary to financial activity.”
`
`In short, no reasonable person could dispute that the ’556 patent satisfies the
`
`“financial product or service” requirement for CBM review standing. Indeed, in
`
`four other CBM review proceedings involving commonly assigned patents relating
`
`18
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`

`

`
`to essentially the same trading screen GUI, the Board found that the patents in
`
`Attorney Docket No. 41919-0002CP1
`CBMR of U.S. Patent No. 7,783,556
`
`questions satisfied the “financial” prong of the CBM eligibility inquiry.2
`
`
`
`B.
`
`The ’556 Patent Is Not Directed to a Technological Invent-
`ion
`
`The claims of the ’556 patent also meet Section 18’s threshold requirement
`
`that a CBM patent must have at least one claim that is not directed to a “technolog-
`
`ical invention.” See AIA § 18(d)(2). To qualify as a technological invention, a pa-
`
`tent must (i) have a novel, unobvious technological feature and (ii) solve a tech-
`
`nical problem using a technological solution. 37 C.F.R. § 42.301. The legislative
`
`history of Section 18 ind