UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`IBG LLC; INTERACTIVE BROKERS LLC;
`TRADESTATION GROUP, INC.; TRADESTATION SECURITIES, INC.;
`TRADESTATION TECHNOLOGIES, INC.;
`IBFX, INC.; CQG, INC.; and CQGT, LLC,
`
`Petitioners
`
`v.
`
`TRADING TECHNOLOGIES INTERNATIONAL, INC.,
`
`Patent Owner
`
`
`
`
`
`
`Case CBM2015-00179
`U.S. Patent No. 7,533,056
`
`
`
`DECLARATION OF PETER C. HART
`
`
`
`
`
`
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`
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`Page 1 of 28
`
`TRADING EXHIBIT 2181
`TRADESTATION v. TRADING TECH
`CBM2015-00179
`
`
`
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`IBG LLC; INTERACTIVE BROKERS LLC;
`TRADESTATION GROUP, INC.; TRADESTATION SECURITIES, INC.;
`TRADESTATION TECHNOLOGIES, INC.;
`IBFX, INC.; CQG, INC.; and CQGT, LLC,
`
`Petitioners
`
`v.
`
`TRADING TECHNOLOGIES INTERNATIONAL, INC.,
`
`Patent Owner
`
`
`
`
`
`
`Case CBM2015-00179
`U.S. Patent No. 7,533,056
`
`
`
`DECLARATION OF PETER C. HART
`
`
`
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`Page 1 of 28
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`TRADING EXHIBIT 2181
`TRADESTATION v. TRADING TECH
`CBM2015-00179
`
`
`
`Declaration
`Exhibit
`A
`B
`C
`D
`E
`F
`G
`H
`I
`J
`K
`L
`M
`N
`O
`P
`Q
`R
`S
`T
`U
`V
`W
`X
`Y
`Z
`AA
`BB
`CC
`DD
`EE
`FF
`
`Corresponding
`TT Exhibit
`1001
`2299
`2300
`2301
`2302
`2303
`2304
`2305
`2306
`2307
`2308
`2309
`2310
`2311
`2312
`2313
`2314
`2315
`2316
`2317
`2318
`2319
`2320
`2321
`2322
`2323
`2324
`2325
`2326
`2327
`2328
`2329
`
`
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`Page 2 of 28
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`i
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`
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`I, Peter C. Hart, declare as follows:
`
`I.
`
`INTRODUCTION
`1.
`
`I have been retained by Trading Technologies International, Inc.
`
`(“TT”) to serve as a consultant in connection with this proceeding before the Unites
`
`States Patent and Trademark Office (“USPTO”). I understand that this proceeding
`
`was initiated by IBG LLC, Interactive Brokers LLC, TradeStation Group, Inc.;
`
`TradeStation Securities, Inc., TradeStation Technologies, Inc., IBFX, Inc., CQG,
`
`Inc., and CQGT, LLC (collectively “Petitioners”). I also understand that this
`
`proceeding involves U.S. Patent No. 7,533,056 (“the ‘056 patent”) (Ex. A), of
`
`which I am an inventor.
`
`2.
`
`I have no ownership interest or financial interest in the ‘056 patent. I
`
`understand that TT owns all right, title, and interest in the ‘056 patent.
`
`3.
`
`I am being compensated by TT based on a retainer agreement only.
`
`My compensation from TT does not depend on the outcome of this proceeding.
`
`II. EDUCATION AND BACKGROUND
`4.
`
`I have bachelor of arts degrees in philosophy and history and received
`
`a bachelor of laws degree from the University of Toronto in 1969. I have not
`
`practiced law in Canada since 1974, and have never been licensed to practice law in
`
`any state in the United States.
`
`5.
`
`I practiced law briefly in the early 1970s with a firm that would later
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`1
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`become Fasken Martineau Walker in Toronto. After leaving law practice in 1974
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`to manage a group of companies in Australia for three years, I returned to Toronto
`
`and formed several technology companies in the late 1970s and 1980s. The
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`technology companies I formed were in the restaurant industry, such as Remanco
`
`Systems, and later the legal industry, such as Legalware. The companies I worked
`
`with during this time were not involved in trading or electronic trading.
`
`6.
`
`In 1990 I began working in the area of negotiation and mediation in
`
`California. During the 1990s, I also began developing game simulations, first on
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`CD-ROMS and then on the internet. In late 1997 or early 1998, I met Rich Friesen
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`and was first introduced to trading.
`
`III. THE PRESENT CBM
`7.
`
`I understand that the Petitioners filed a petition for Covered Business
`
`Method (“CBM”) Review of the ‘056 patent, now dubbed CBM2015-00179. I
`
`understand that one of the grounds for review of the ’056 patent is based on a
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`reference called the Tokyo Stock Exchange (“TSE”). I understand that the
`
`Petitioners claim that the TSE reference dates back to August 1998 and is prior art
`
`to claims 1-15 of the ‘056 patent.
`
`8.
`
`I understand that all CBM reviews are performed by the Patent Trial
`
`and Appeal Board (“PTAB”) at the USPTO. I understand that as a part of the
`
`CBM review, the PTAB has construed some claim terms of the ‘056 patent, and
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`2
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`that Petitioners have also offered a construction of the same terms. My
`
`understanding of these constructions is as follows:
`
`Claim Term
`
`“price axis”
`
`(offer and bid) “indicators
`representing quantity”
`
`“default quantity”
`
`“indicators, icons, and
`tokens”
`
`“receiving a user input
`indicating a desired price
`for an order . . . by
`selection of one of a
`plurality of locations”
`
`“the desired price”
`
`“the default quantity
`working at the electronic
`exchange”(claim 7)
`
`9.
`
`Petitioners’ Proposal
`a reference line for
`plotting prices, including
`labeled, unlabeled, visible
`and invisible reference
`lines
`includes alphanumeric
`and graphical indicators
`a preset value or the
`user’s last entered value
`to be used for a
`transaction
`a symbol such as an
`alphanumeric characters
`or a graphic
`representation of an item.
`
`PTAB Construction
`a reference line for
`plotting prices, including
`labeled, unlabeled,
`visible, and invisible
`reference lines
`includes alphanumeric
`and graphical indicators
`
`a preset value or the
`user’s last entered value
`
`a symbol such as an
`alphanumeric character or
`a graphic representation
`of an item
`
`adjusting an order after it
`has been created
`
`adjusting an order after it
`has been created
`
`a price that is specified
`for an order placed by a
`user
`the unfilled portion of an
`order placed in claim 1
`
`a price that is specified
`for an order placed by
`user
`the unfilled portion of an
`order placed in claim 1
`
`I have been informed that under U.S. patent law, conception of an
`
`invention is the formation of a definite and permanent idea of the complete and
`
`operative invention in the mind of the inventor(s). I have also been informed that
`
`conception is complete when this idea is so clearly defined in the inventor's mind
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`3
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`that only ordinary skill would be necessary to reduce the invention to practice,
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`without extensive research or experimentation.
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`10.
`
`I have been informed that a reduction to practice may occur by either
`
`an actual reduction to practice or a constructive reduction to practice. I have been
`
`informed that an actual reduction to practice requires: (1) constructing an
`
`embodiment or performing a process meeting every limitation of the claim; and
`
`(2) demonstrating that the embodiment or process operates for its intended
`
`purpose. I have been informed that a constructive reduction to practice occurs
`
`upon the filing of the application from which the patent in question issued.
`
`11. Based on this, the conception of the invention claimed in the ‘056
`
`patent is no later than March 1998, and in any event no later than August 1998, the
`
`alleged date of the TSE reference. Moreover, the invention of the ‘056 patent was
`
`actually reduced to practice no later than November 30, 1998, and constructively
`
`reduced to practice on April 9, 1999, when the application to which the ‘056
`
`patent claims priority was filed.
`
`IV. CONCEPTION OF THE ‘056 INVENTION
`12.
`
`In 1998, Rich and I formed ePit Systems (“ePit”). Initially, we
`
`worked on developing the front end graphical user interface (“GUI”) that a trader
`
`interacts with on a trading screen. However, we eventually began developing an
`
`entire trading system, including both a front end GUI to receive orders and a back
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`4
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`end system to manage and route orders received from multiple front ends.
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`13. Our goal was to create a system that could simulate the excitement
`
`and fast-paced nature of live trading in the trading pits on a front end GUI. One
`
`important criteria to accomplish this was to keep to a minimum the amount of user
`
`input that was necessary to place each order into the GUI. We felt that traders
`
`must be able to enter orders quickly.
`
`14. Rich wrote a specification for this GUI, which is dated September
`
`1997. Ex. B (PH00001249). We referred to the front end order entry GUI as the
`
`“Trading Game” because it would eventually allow traders to compete against each
`
`other, and was meant to be fast-paced and exciting. The GUI specification
`
`included a “combined trading and chart arena that allows traders to place their bids
`
`and offer[s]” with a “Y axis (vertical) [that] is the price of the product.” Id. at
`
`1255. It also allowed for a trader to “move[] his cursor from the steps to the token
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`area and drag[] a token to the pit.” Id. at 1256. The document also specified
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`“several size tokens such as 5, 10, 25 [etc.].” A trader could also “modify
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`bid/offer,” and thus the Trading Game could “allow changes in price or quantity.”
`
`Id. at 1257.
`
`15. We hired the software development company All of the Above, Inc.
`
`(“ATA”), to develop the software for the GUI based on our specification. Rich
`
`had several meetings with Mr. Kirk Knight and others at ATA between the time
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`5
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`that Rich wrote the specification in September 1997 and March 1998. During this
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`time, Rich and I refined many of the design concepts of the Trading Game
`
`specification which ATA used to program the front end GUI.
`
`16.
`
`In January 1998, Rich gave Mr. Knight a “go-ahead” to produce a
`
`“Design Document” based on the Trading Game specification and our additional
`
`input. Mr. Knight confirmed this in an email dated January 7, 1998, which I
`
`received. Ex. C (RF0006028)..
`
`17. ATA finished the Design Document for the Trading Game in March
`
`1998. Ex. D (PH00000001). Although ATA’s design document detailed some
`
`aspects of the Trading Game in detail, it did not include all of our ideas.
`
`Nonetheless, the following claim chart shows how the ATA Design Document
`
`includes the elements of claim 1 of the ‘056 patent and therefore shows that Rich
`
`and I had conceived of the invention of the ‘056 patent no later than March 1998.
`
`March 1998 Trading Game Design Document
`
`The Design Document for the Trading Game describes a GUI
`for trading on a computer. Ex. D at 1. The GUI facilitates
`trading on an electronic exchange, which would naturally
`include both bid and offer type orders. Id. at 1.
`
`Claim 1
`1. A method of
`operation used by
`a computer for
`displaying
`transactional
`information and
`facilitating
`trading in a
`system where
`orders comprise a
`bid type or an
`offer type, the
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`6
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`The GUI was designed to receive bid and offer information for
`a product from an electronic exchange. Id. The image below is
`an annotated screen shot of the figure on page 3 of the Design
`Document.
`
`
`method
`comprising:
`
`receiving bid and
`offer information
`for a product
`from an
`electronic
`exchange, the bid
`and offer
`information
`indicating a
`plurality of bid
`orders and a
`plurality of offer
`orders for the
`product;
`
`
`The red bars in this figure represent the plurality of offer orders
`received for the product and the blue bars represent the plurality
`of bid orders received for the product. Id. at 3.
`
`The blue bars in the figure above are the bid indicators. The
`length of each bar represents the quantity associated with each
`order. The bars are displayed at locations corresponding to the
`price levels of a price axis, which are depicted on the right-hand
`side. Id.
`
`
`displaying a
`plurality of bid
`indicators
`representing
`quantity
`associated with
`the plurality of
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`7
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`Page 9 of 28
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`bid orders, the
`plurality of bid
`indicators being
`displayed at
`locations
`corresponding to
`prices of the
`plurality of bid
`orders along a
`price axis;
`
`displaying a
`plurality of offer
`indicators
`representing
`quantity
`associated with
`the plurality of
`offer orders, the
`plurality of offer
`indicators being
`displayed at
`locations
`corresponding to
`prices of the
`plurality offer
`orders along the
`price axis;
`
`The red bars in the figure above are the offer indicators. The
`length of each bar represents the quantity associated with each
`order. The bars are displayed at locations corresponding to the
`price levels of a price axis, which are depicted on the right-hand
`side. Id.
`
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`8
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`Page 10 of 28
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`The GUI described in the Design includes a BuySelector and a
`SellSelector. Id at 12. There is also a BuyQuantityType field
`and a SellQuantityType field that allows for the input of the
`quantity of a user’s order. The user can input a quantity by
`using the drop down box and selecting from a list of pre-
`determined values, or by inputting the desired quantity directly
`in the text box. The value input remains the quantity until
`changed. Therefore, the GUI can receive a user input indicating
`a default quantity to be used to determine a quantity for each of
`a plurality of orders. Id.
`
`
`receiving a user
`input indicating a
`default quantity
`to be used to
`determine a
`quantity for each
`of a plurality of
`orders to be
`placed by the
`user at one or
`more price
`levels;
`
`receiving a user
`input indicating a
`
`The Design Document describes how a user can select one of a
`plurality of locations corresponding to price levels on the price
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`9
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`axis by manipulating the red arrow slider to be aligned with a
`desired price. Id. at 6, 11.
`
`
`The Design Document also details how a user could click the
`TRADE button to send an order. Id. at 2. The order would be
`sent at the default quantity established in the Buy or Sell
`QuantityType fields described above if the user has entered a
`quantity for a previous order and does not change it.
`
`
`desired price for
`an order to be
`placed by the
`user, the desired
`price being
`specified by
`selection of one
`of a plurality of
`locations
`corresponding to
`price levels along
`the price axis;
`and
`
`sending the order
`for the default
`quantity at the
`desired price to
`the electronic
`exchange.
`
`
`18. The ATA Design Document describes in detail one version of the
`
`front end GUI that Rich and I conceived between September 1997 and March
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`10
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`1998. Because of the detail included, reducing the ideas found in the ATA Design
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`Document to practice would have taken no more than ordinary skill. Therefore,
`
`the ATA Design Document demonstrates that Rich and I conceived of the
`
`invention of the ‘056 patent no later than March 1998.
`
`V. ACTUAL REDUCTION TO PRACTICE OF THE ‘056 INVENTION
`19. After working with ATA, and shortly after the ATA Design
`
`Document was produced, Rich and I hired Moses Ma and his company Business
`
`Bots (“BB”) to continue working on the project. On April 24, 1998, we signed a
`
`Technology Development Agreement that I wrote, under which BB would develop
`
`software prototypes of the Trading Game, among other ideas. Ex. E
`
`(PH00000367).
`
`20. Mr. Ma and BB began reducing our ideas to practice, and at some
`
`point shortly after signing the Technology Development Agreement, hired Tom
`
`Biddulph and Cliff Collins, either as consultants individually or via their company
`
`SkyWeyr Technologies, to assist with the software programming of the proposed
`
`GUI. By June 26, 1998, BB had produced a document entitled Design and
`
`Technical Specification listing the design parameters of some proposed GUIs,
`
`including some screenshots. Ex. F (PH00000461).
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`21. A screenshot of one of the proposed GUIs shown in the Design and
`
`Technical Specification is shown below. Id. at 525.
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`11
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`22. The GUI pictured above, which we called the “Trading Board,” would
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`
`
`allow traders to drag and drop tokens onto a graph to enter an order. The circle
`
`token was a “buy” token, and the cross-hair token was a “sell” token. Id. at 534.
`
`The Trading Board had a vertical axis for the price of the object being traded and a
`
`horizontal axis for quantity of a trade. Based on this, a trader could designate
`
`various parameters of a trade such as the type of order (buy or sell), price, and
`
`quantity, based on which type of token was selected and where the token was
`
`dropped on the graph. Figure 4 in the ‘056 patent is similar to the one shown
`
`above.
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`12
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`23.
`
`In early July 1998, Mr. Ma and BB had completed a working GUI
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`based on the Design and Technical Specification and Rich and I demonstrated it to
`
`a potential investor named Robert Leppo. Mr. Leppo was impressed, saying he
`
`was “blown away”, and I sent an email afterwards to Rich, Mr. Ma, and others
`
`with my own impressions and comments on the GUI. Exhibit J (RF0007872) On
`
`July 12, 1998, Rich replied to my email, responding to some of my comments and
`
`making his own comments on the current GUI. Id.
`
`24. One of my suggestions was to allow a trader to optionally show the
`
`quantity of an order by varying the size of the tokens in proportion to their
`
`quantity. I noted that this would be useful when one of the axes on the graph was
`
`time, rather than quantity. Id. at 7873.
`
`25.
`
`I also suggested an option where “the trader fix[es] the quantity so
`
`that this is one issue that the trader doesn’t have to be concerned about in
`
`manipulating the mouse” Id. at 7874. Rich responded “certainly there should be a
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`user default for quantity. If a trader only trades ‘10,’ the software should
`
`accommodate that volume as a default.” Id.
`
`26. The business relationship between ePit and Mr. Ma began
`
`deteriorating shortly after this demonstration to Mr. Leppo. We parted ways with
`
`Mr. Ma and BB, but agreed separately with Mr. Biddulph and Mr. Collins that they
`
`would continue working directly for ePit to continue the programming work on the
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`13
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`Page 15 of 28
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`GUI demo.
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`27. Our work on the GUI continued despite the separation with Mr. Ma
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`and BB. On August 6, 1998, I was copied on Rich’s response to an email from
`
`Jeffrey Schneider, a consultant working for ePit, who had stated that “[t]he
`
`interface we currently have is a pretty good representation of the ideas you
`
`proposed. Now comes the process of testing that interface.” Ex. K (RF0007926).
`
`In the late summer and fall of 1998, Rich and I sought programmers to help with
`
`the database aspects of the back end system as well as traders to show the demo
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`GUI to, while Mr. Biddulph and Mr. Collins continued to work on the front end
`
`GUI. As one example, Rich copied me on his August 27, 1998 response to an
`
`email from Mr. Schneider discussing the search for database programmers. Ex. L
`
`(RF0008012). Rich copied me on another email dated August 31, 1998, in which
`
`he was excited to report that we had a “tentative date for a preliminary demo” on
`
`September 8, 1998, for a Mr. Fred Federspiel from BIOS, Inc. Ex. N
`
`(RF0008021).
`
`28. We conducted additional demos and further testing and revising of the
`
`GUI throughout this time period. On September 26, 1998, Mr. Biddulph
`
`responded to my email requesting a demo be set up in Rich’s office, noting that the
`
`software was “ready to install.” Ex. O (RF0008080). As another example, Mr.
`
`Biddulph emailed Rich, Mr. Schneider, and me on October 8, 1998 with a link to
`
`14
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`Page 16 of 28
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`
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`instructions for setting up the GUI demo software. Ex. P (RF0008101). Further,
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`on October 13, 1998, Mr. Biddulph emailed Rich, Mr. Schneider, and me about the
`
`GUI prototype and said that he was “in the process of restructuring the GUI.” Ex.
`
`R (RF0008348).
`
`29.
`
`In addition, in the fall of 1998, I continued to work on some of the
`
`ideas that Rich and I had discussed for the GUI earlier that summer. On October
`
`20, 1998, I sent an email to Rich, Mr. Biddulph, and Mr. Schneider, attaching a
`
`second version of “an alternative trading board design that grew out of a desire to
`
`visualize the quantity and priority of orders and the spread.” Ex. S (RF0008729).
`
`I also noted that I had previously prepared a first version, which Rich had reviewed
`
`and then made suggestions, which I incorporated. Id. I also asked if Mr. Biddulph
`
`thought any part of the alternative design would be difficult to develop. Id. The
`
`alternative trading board design I attached to this email is pictured below:
`
`15
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`Page 17 of 28
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`
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`Ex. T (PH00001393). Here, the size of each vertical bar indicates the size of the
`
`order’s quantity, and the bars for pending orders entered at the same prices are
`
`stacked on top of each other. See id. at 1.
`
`30. Mr. Biddulph responded to my email on October 20, 1998, with some
`
`questions about the alternative view, and I responded the same day. Ex. U
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`16
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`Page 18 of 28
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`
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`(RF0008734). Mr. Schneider then responded to my email, also on October 20,
`
`with some additional suggestions. Ex. V (RF0008736). A few days later, on
`
`October 23, 1998, Mr. Biddulph emailed Rich and me to inform us that he had
`
`completed a mock-up of my alternative view GUI idea. Ex. W (RF0008766). He
`
`said it was functional, but “there are LOTs of things we would need to do with it.”
`
`Id. Rich responded to Mr. Biddulph on the same day, copying me, with a
`
`suggestion to allow a trader to adjust the volume of an order before placing it by
`
`dragging the length of the order token before placing it on the screen. Ex. X
`
`(RF0008770).
`
`31.
`
`In a series of emails dated November 20, 1998,Mr. Biddulph indicated
`
`to Rich and me that he had completed a new working demo of the alternative view
`
`that included the new features that had been suggested. Mr. Biddulph refers to
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`“[b]oth the old and the to-be-installed clients” and also says “we could decide if
`
`you wanted to use it [the new demo] or the older one.” Ex. Y (RF0008809). I
`
`understand the “to-be-installed clients” to be the newly completed demo including
`
`the alternative view.
`
`32. On November 24 and December 16, 1998, ePit conducted demos
`
`where multiple traders competed against one another simultaneously using the
`
`demo GUIs. Rich observed them during the demos and took notes, which he
`
`emailed to me and others at the conclusion of each demo. Ex. Z (RF0008926); Ex.
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`17
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`Page 19 of 28
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`
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`AA (RF0009144). During these demos, each trader’s GUI was connected to a
`
`back end that simulated a live exchange, where one trader’s entered orders would
`
`appear on the other traders’ front end screens. Although the traders were not
`
`trading real money on a live exchange, the front end GUIs they were using would
`
`have functioned the same had they been connected to a real exchange.
`
`33. At each of the demos on November 24 and December 16, the traders
`
`used both the alternative view GUI, which we had started referring to as the
`
`“priority view” or “priority screen”, as well as the previous demo GUI, which we
`
`sometimes called the “trading board” or simply the “original.” For instance, Rich
`
`refers to the “priority view” in his notes from the December 16, 1998 demo. Ex.
`
`BB (RF0009145). Also, in an ePIT company newsletter Rich emailed on
`
`December 23, 1998, he mentioned the December 16 “trading contest” and
`
`mentioned that both “the original and Peter’s ‘priority view’ version” were used.
`
`Ex. CC (RF0041686). Mr. Biddulph may have made some changes to the GUI
`
`software between the two multiple-trader demos, for instance to address some of
`
`the issues Rich had noticed in the first demo. However, the functionality of the
`
`priority view GUI remained generally the same from one contest to the next.
`
`34.
`
`I understand that Mr. Biddulph was deposed on November 15, 2011
`
`as a part of the patent litigation between TT and GL Trade SA (“GL”). I have also
`
`been informed that two former ePIT employees, Rusty Rahm and Per Hjartoy,
`
`18
`
`Page 20 of 28
`
`
`
`received subpoenas from GL and produced software files in response to the
`
`subpoena. I have been informed that GL’s attorneys used Mr. Rahm’s and Mr.
`
`Hjartoy’s files to run a demo of the 1998 ePit priority view GUI. I have read Mr.
`
`Biddulph’s deposition transcript and I have watched part of the video file where
`
`Mr. Biddulph interacts with the demo of the 1998 ePit priority view GUI.
`
`35. The demo of the 1998 ePit priority view GUI operated by Mr.
`
`Biddulph during his deposition is the GUI that the traders used during the
`
`November 24 and December 16 demos that we conducted. I understand that Mr.
`
`Biddulph testified during his deposition that it was his practice to update the
`
`“About” screen in the GUI with each update he made to the software. Ex. DD
`
`(Biddulph Dep. Tr. 117:1-5). I also understand that the “About” screen of the 1998
`
`demo operated during Mr. Biddulph’s deposition listed a build date of November
`
`30, 1998. Id. at 117:1-5.
`
`36. The demo of the 1998 ePit priority view GUI was an actual reduction
`
`to practice of the ‘056 patent because it included every element of claim 1, as
`
`detailed in the claim chart below. The screenshots in the chart are still frames from
`
`Mr. Biddulph’s deposition video. Based on all of the information noted above, the
`
`actual reduction to practice of the ‘056 patent occurred at least as early as
`
`November 20, 1998, (see Ex. AA), but in any event no later than November 30,
`
`1998. See Ex. DD at 117:1-5.
`
`19
`
`Page 21 of 28
`
`
`
`
`
`Claim 1
`1. A method of
`operation used by a
`computer for
`displaying
`transactional
`information and
`facilitating trading in
`a system where orders
`comprise a bid type or
`an offer type, the
`method comprising:
`
`receiving bid and
`offer information for a
`product from an
`electronic exchange,
`the bid and offer
`information indicating
`a plurality of bid
`orders and a plurality
`of offer orders for the
`product;
`
`1998 ePit Priority View GUI Demo
`
`The 1998 ePit priority view GUI demo (“the priority view
`GUI”) is a GUI for trading on a computer. The GUI
`facilitates trading on an electronic exchange, which would
`naturally include both bid and offer type orders, even in a
`simulated exchange environment.
`
`The GUI was designed to receive bid and offer information
`for a product from an electronic exchange. The image
`below is an annotated screen shot of the GUI in operation.
`
`
`
`The red bars in this figure represent the plurality of offer
`orders received for the product and the blue bars represent
`the plurality of bid orders received for the product.
`
`20
`
`Page 22 of 28
`
`
`
`displaying a plurality
`of bid indicators
`representing quantity
`associated with the
`plurality of bid orders,
`the plurality of bid
`indicators being
`displayed at locations
`corresponding to
`prices of the plurality
`of bid orders along a
`price axis;
`
`displaying a plurality
`of offer indicators
`representing quantity
`associated with the
`plurality of offer
`orders, the plurality of
`offer indicators being
`displayed at locations
`corresponding to
`prices of the plurality
`offer orders along the
`price axis;
`
`The blue bars in the figure above are the bid indicators.
`The length of each bar represents the quantity associated
`with each order. The bottom edge of the red bars, and the
`top edge of the blue bars, are displayed at locations
`corresponding to the price levels of a price axis, which are
`depicted on the right-hand side.
`
`
`The red bars in the figure above are the offer indicators.
`The length of each bar represents the quantity associated
`with each order. The bars are displayed at locations
`corresponding to the price levels of a price axis, which are
`depicted on the right-hand side. Id.
`
`
`21
`
`Page 23 of 28
`
`
`
`receiving a user input
`indicating a default
`quantity to be used to
`determine a quantity
`for each of a plurality
`of orders to be placed
`by the user at one or
`more price levels;
`
`The priority view GUI allowed a user to resize a bid or
`offer token to adjust the desired quantity of an order. The
`user could then drag the resized token onto the board and
`release it. The resized bid or offer order entry token would
`remain the same size for subsequent orders, which would
`be placed at the same quantity.
`
`The following screen shots illustrate this process. At Time
`1, the user’s cursor is below the red offer token. The offer
`token is relatively small, indicating a relatively small
`quantity.
`
`
`22
`
`Page 24 of 28
`
`
`
`Time 1
`
`
`At time 2, the user has dragged the bottom of the red offer
`token down to make the token longer, and thereby
`provided an input indicating a default quantity to be used
`for a plurality of trade orders to be placed by the user.
`
`
`Time 2
`
`23
`
`Page 25 of 28
`
`
`
`
`At time 3, the red offer token remains at the user specified
`size while the user drags an offer order onto the board at
`the specified quantity. This illustrates that the default
`quantity that was input by the user, by virtue of resizing the
`token, can be used by the trader to submit subsequent
`orders without having to resize the token again.
`
`
`Time 3
`
`
`These screenshots show that the priority view GUI could
`receive user input indicating a default quantity to be used
`to determine a quantity for each of a plurality of orders.
`
`
`
`receiving a user input
`indicating a desired
`price for an order to
`be placed by the user,
`the desired price
`
`The priority view GUI could receive a user input indicating
`a desired price for an order to be placed by the user, the
`desired price being specified by selection of one of a
`plurality of locations corresponding to price levels along
`the price axis.
`
`24
`
`Page 26 of 28
`
`
`
`being specified by
`selection of one of a
`plurality of locations
`corresponding to price
`levels along the price
`axis; and
`
`sending the order for
`the default quantity at
`the desired price to
`the electronic
`exchange.
`
`
`As shown in the time 3 screenshot above, the user could
`select a location corresponding to a price level along the
`price axis by dragging and dropping the token at a
`particular vertical position on the board. As indicated by
`the price axis on the right-hand side, the vertical position
`on the board corresponded to price levels along the price
`axis.
`
`The priority view GUI could send the order for the default
`quantity at the desired price to the electronic exchange, in
`this case a simulated exchange.
`
`As shown in the time 3 screenshot above, upon dragging
`and dropping the previously resized bid or offer token at a
`particular vertical position on the board, a confirmation
`window popped up, allowing the user to send the order by
`clicking on the OK button.
`
`
`
`VI. CONSTRUCTIVE REDUCTION TO PRACTICE
`37. Rich and I wanted to obtain patent protection for our ideas, which I
`
`had indicated as early as my email attaching the alternative trading board design in
`
`October 1998. See Ex. S. On December 11, 1998 Rich sent me an email with a
`
`draft company newsletter. In the draft newsletter, he notes that he had a long
`
`initial meeting with an IP attorney that week, Mr. Robert Sachs of the Fenwick &
`
`West law firm. Ex. EE (RF0033245). I was also present at that initial meeting
`
`with Mr. Sachs. Rich and I proceeded to work with Mr. Sachs on the patent
`
`application process which eventually led to the filing of U.S. Patent Application
`
`No. 09/289,550 (“the ‘550 application”) on April 9, 1999. The ‘056 patent is a
`
`25
`
`Page 27 of 28
`
`
`
`continuation of the ‘550 application. Therefore, the ’056 patent was constructively
`
`reduced to practice no later than April 9, 1999.
`
`VII. CONCLUSION
`
`38.
`
`I declare that all statements of my knowledge made herein are true,
`
`and that all statements made on information and belief are believed to be true, and
`
`that all statements were made with lmowledge that willful false statements and the
`
`like so made are punishable by fine or imprisonment, or both, under Section 1001
`
`of Title 18 of the United States Code.
`
`<”>
`
`Peter C. Hart
`
`26
`
`Page 28 of 28
`
`Page 28 of 28
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