`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`IBG LLC, INTERACTIVE BROKERS LLC, TRADESTATION
`GROUP, INC., TRADESTATION SECURITIES, INC.,
`
`Petitioners,
`
`v.
`
`TRADING TECHNOLOGIES INTERNATIONAL, INC.,
`
`Patent Owner.
`
`
`
`Case CBM2016-00054
`U.S. Patent 7,693,768 B2
`
`
`DECLARATION OF JAY KNOBLOCH
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Page 1 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`
`
`Table of Contents
`INTRODUCTION & BACKGROUND .......................................................1
`
`
`
`I.
`
`II.
`PATENT LICENSING ................................................................................1
`
`III. CONCLUDING STATEMENTS ................................................................6
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Page 2 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`
`
`I, Jay Knobloch, declare as follows:
`
`I.
`
`INTRODUCTION & BACKGROUND
`
`1.
`
`I currently serve as the Director of Intellectual Property (“IP”)
`
`Licensing and Litigation for Trading Technologies International, Inc. (“TT”). In
`
`this role, I oversee TT’s licensing of its IP assets and assist in the management of
`
`all aspects of TT’s IP litigation matters. Prior to my role as Director, I served as
`
`Patent Counsel at TT from February 2010 until February 2012.
`
`2.
`
` Before joining TT, I was employed by Brinks Hofer Gilson and
`
`Lione LLP, an IP law firm located in Chicago, Illinois, as a patent agent starting
`
`in February 2005. Upon completion of my law degree from DePaul University
`
`College of Law in December 2007, I transitioned into my role as a patent
`
`attorney at Brinks Hofer until deciding to join TT. Prior to law school, I attended
`
`Arizona State University and graduated in 2003 with a degree in electrical
`
`engineering.
`
`II.
`
`PATENT LICENSING
`
`3.
`
`As I noted above, a portion of my role at TT involves overseeing the
`
`licensing of TT’s IP assets, including the licensing of TT’s patents. Though I
`
`was not employed by TT until 2010, I am knowledgeable regarding TT’s licenses
`
`dating back to 2004, and in particular those relating to the technology claimed in
`
`the patents-in-suit.
`
`
`
`1
`
`Page 3 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`
`
`4.
`
`After U.S. Patent Nos. 6,766,304 and 6,772,132 issued in July and
`
`August of 2004, a number of companies in the industry were already copying TT’s
`
`MD Trader screen, which embodied the technology claimed in these patents. All
`
`versions of the MD Trader screen from the launch date in 2000 to the present time
`
`embody the technology claimed in U.S. Patent No. 7,693,768. Specifically, MD
`
`Trader has always included the following features that are set forth in claim 1 of
`
`the ‘768 patent: receives market data comprising bid and offer prices relating to a
`
`commodity from the exchange; dynamically displays a first indicator in one of a
`
`plurality of areas in a bid display region, with each area corresponding to a price
`
`level along a price axis; dynamically displays a second indicator in one of a
`
`plurality of areas in an ask display region, with each area corresponding to a price
`
`level along a price axis; displays an order entry region comprising a plurality of
`
`fixed locations for receiving single action commands to both set a plurality of
`
`parameter for the trade order and send the order to the exchange; whereas a first
`
`fixed location of the order entry region is associated with a first price level of the
`
`highest bid price at a first time, and remains associated with the first price level
`
`even if the market changes and there is a new highest bid price; whereas a second
`
`fixed location of the order entry region is associated with a second price level of
`
`the lowest ask price at a first time, and remains associated with the second price
`
`level even if the market changes and there is a new lowest ask price; updates the
`
`
`
`2
`
`Page 4 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`
`
`displayed market information (bid and offer indicators) such that the bids and offer
`
`indicators move relative to the price axis in response to receipt of new market
`
`information; and single action order entry that sets a plurality of parameters for a
`
`trade order relating to a commodity and sends a trade order to the exchange
`
`5.
`
`In an effort to protect its IP assets, TT entered into numerous types of
`
`deals with respect to patents that cover MD_Trader and its functionality, including
`
`the ‘304 and ‘132 patents, and continuation patents (such as the ‘768 patent), as
`
`can be seen in the demonstrative used at the CQG trial shown below:
`
`
`
`3
`
`
`
`Page 5 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`
`
`6.
`
` It was apparent that the industry competitors recognized that their
`
`products infringed the patents and utilized the same functionality as was set forth
`
`in MD Trader. The licensing and settlement agreements resulted directly from the
`
`merits of MD Trader, which is claimed in the ‘768 patent. For example, the
`
`licensing of the ‘768 patent by the above listed industry competitors was caused by
`
`the merits of the claimed features of MD Trader, which is set forth in the claims of
`
`the ‘768 patent. Accordingly, there is a nexus between TT’s licensing revenues
`
`and the claims of the ‘768 patent.
`
`7.
`
`For example, several companies agreed to remove their version of the
`
`patented trading screen from their product offerings. Companies that chose this
`
`option include Patsystems, RTS, Strategy Runner, Rolfe and Nolan, FFastFill,
`
`TransMarket, ORC, NYFIX, Peregrine Financial Group, and TradeMaven.
`
`8.
`
`As an example, Patsystems and RTS were main competitors of TT
`
`that both decided to remove their version of the MD Trader trading screen around
`
`2004. Both of these competitors, along with others that followed in a similar
`
`fashion (FFastFill, ORC, and NYFIX), changed the focus of their business to areas
`
`other than manual order entry and declined as competitors to TT.
`
`9.
`
`These agreements were particularly beneficial to TT on two fronts.
`
`First, it was beneficial to have a company agree that it would stop infringing and
`
`remove the infringing product from the market, thus directing customers back to
`
`
`
`4
`
`Page 6 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`
`
`TT. Second, since some of these companies were TT’s direct competitors, it was
`
`beneficial for TT to have them drop out and return the competitive edge to TT vis-
`
`à-vis the competitors themselves.
`
`10. As another option, several companies entered into a license agreement
`
`which would allow them to practice the patented technology. In return, these
`
`companies would pay TT royalties to continue using the copied trading screens.
`
`Companies that chose this option included Goldenberg Heymeyer, Kingstree,
`
`Ninja Trader, Direct Trading Institutional (“DTI”), RCG, OEC, Market Delta, 20
`
`LLC, Trademonster, and Trade Exchange. In some instances, these companies
`
`entered into a license agreement wherein they agreed to pay for past damages
`
`based on prior use. Also, some companies entered into a license agreement
`
`wherein they agreed to pay TT a royalty based on future use for the MD Trader
`
`patents that had issued, and future continuation patents such as the ‘768 patent. TT
`
`still collects royalty payments from several of these companies. Several of these
`
`companies approached TT requesting a license without having to be threatened by
`
`TT, e.g., Ninja Trader, DTI, Goldenberg Hehmeyer, Market Delta, 20 LLC,
`
`Trademonster, and Trade Exchange. Mr. Deux, the CEO of Ninja Trader, testified
`
`that
`
`
`
` Likewise, Goldenberg Hehmeyer admitted that
`
`
`
`
`
`
`
`5
`
`Page 7 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`
`
`
`
`11. Finally, several companies, such as Patsystems and Strategy Runner,
`
`chose to sign a license agreement that would give them the option to license and
`
`practice the claimed technology in the future, however neither availed themselves
`
`of it.
`
`12.
`
`In total, TT has received more than
`
` in royalty and
`
`settlement payments.
`
`13. Also, in 2004-2005, TT filed law suits against several competitors for
`
`infringement of the ‘132 and ‘304 patents based on their use of the patented
`
`technology. Though most of the litigations settled, several did not and progressed
`
`into litigation in the Northern District of Illinois.
`
`14. One example was a company named eSpeed, which was not a
`
`traditional competitor of TT’s, however they coincidentally launched their
`
`electronic trading screen at the same time the ‘132 and ‘304 patents issued. We
`
`viewed them as a significant threat because they were able to leverage off of their
`
`exchange business and offer this software for free. Mr. Ryan (TT’s general
`
`counsel) testified that he and Mr. Borsand attended a launch marketing event for
`
`the eSpeed product that embodied the patented invention and that at that event an
`
`eSpeed representative stated that the product was just like TT’s MD Trader and
`
`would be offered for free. Ex. 1 (Ryan Testimony, eSpeed Trial Tr. at 587:16-
`
`
`
`6
`
`Page 8 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`
`
`594:11, PTX 9)). In the lawsuit, several of eSpeed’s electronic trading screens
`
`were found to infringe TT’s patents.
`
`15. For those that settled, some of the settlement agreements entered
`
`consent judgments as means for establishing finality in the lawsuit. These consent
`
`judgments set forth that the patents-in-suit are valid and enforceable, that the
`
`defendant infringed the patents-in-suit, and that the defendant was permanently
`
`enjoined from making, using, selling, offering for sale, importing, facilitating
`
`connectivity for, or otherwise distributing the infringing electronic trading
`
`product. The existence of the consent judgments put “more teeth” behind the
`
`agreement and ensured that the matters would be put to rest. See, e.g., Ex. 2,
`
`Consent Judgment with NinjaTrader, LLC.
`
`III. CONCLUDING STATEMENTS
`
`16.
`
`In signing this declaration, I understand that the declaration will be
`
`filed as evidence in a contested case before the Patent Trial and Appeal Board of
`
`the United States Patent and Trademark Office. I acknowledge that I may be
`
`subject to cross-examination in this case and that cross-examination will take
`
`place within the United States. If cross-examination is required of me, I will
`
`appear for cross-examination within the United States during the time allotted for
`
`cross-examination.
`
`17.
`
`I declare that all statements made herein of my knowledge are true,
`
`
`
`7
`
`Page 9 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`
`
`and that all statements made on information and belief are believed to be true, and
`
`that these statements were made with the knowledge 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.
`
`
`
`Dated: January 17, 2017
`
`
`
`
`
`
`
`
`
`8
`
`Page 10 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Exhibit 1
`
`
`
`
`
`Page 11 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`489
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`TRADING TECHNOLOGIES INTERNATIONAL,)
`INC.,
`
`Plaintiff,
`
`))
`
`))
`
`)
`v.
`)
`eSPEED, INC., eSPEED INTERNATIONAL,)
`LTD., ECCO LLC, and ECCOWARE, LTD.,)
`)
`Defendants.
`)
`
`No. 04 C 5312
`
`Chicago, Illinois
`September 12, 2007
`1:30 o'clock p.m.
`
`VOLUME 3-B
`TRIAL TRANSCRIPT OF PROCEEDINGS
`BEFORE THE HONORABLE JAMES B. MORAN, and a JURY
`
`APPEARANCES:
`Trading Technologies
`International, Inc., by:
`
`and
`
`TRADING TECHNOLOGIES
`INTERNATIONAL, INC.,
`MR. STEVEN F. BORSAND
`222 South Riverside Drive
`Chicago, Illinois 60606
`312-476-1000
`steve.borsand@
`tradingtechnologies.com
`McDONNELL, BOEHNEN, HULBERT &
`BERGHOFF, LTD.
`MR. PAUL H. BERGHOFF
`MR. S. RICHARD CARDEN
`MR. CHRISTOPHER M. CAVAN
`MR. MICHAEL D. GANNON
`MS. JENNIFER M. KURCZ
`MR. MATTHEW J. SAMPSON
`MR. LEIF R. SIGMOND
`300 South Wacker Drive
`Chicago, Illinois 60606
`312-913-0001
`berghoff@mbhb.com
`kurcz@mbhb.com
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`Page 12 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`eSpeed, Inc., eSpeed
`International, Inc.,
`Ecco LLC, Eccoware,
`LTD., by:
`
`490
`
`WINSTON & STRAWN
`MR. GEORGE C. LOMBARDI
`MR. RAYMOND C. PERKINS
`MR. IMRON T. ALY
`MR. KEVIN BANASIK
`MS. ELIZABETH HARTFORD ERICKSON
`MR. ANDREW M. JOHNSTONE
`MS. TRACEY J. ALLEN
`MR. JAMES M. HILMERT
`35 West Wacker Drive
`Chicago, Illinois 60601
`312-558-5600
`glombardi@winston.com
`rperkins@winston.com
`LAW OFFICES OF
`GARY A. ROSEN, P.C.
`MR. GARY A. ROSEN
`1831 Chestnut Street, Suite 802
`Philadelphia, Pennsylvania
`19103
`215-972-0600
`
`Rosenthal Collins Group, DOWELL BAKER
`LLC, by:
`MR. GEOFFREY A. BAKER
`201 Main Street
`Lafayette, IN 47901
`765-429-4004
`gabaker@dowellbaker.com
`
`Court Reporter:
`
`MS. CAROLYN COX, CSR, RPR, CRR
`Official Court Reporter
`219 S. Dearborn Street, Suite 1854-B
`Chicago, Illinois
`60604
`(312) 435-5639
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`Page 13 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`575
`
`THE COURT:
`MR. CARDEN:
`are not all out.
`
`You may.
`Oops.
`
`I'm sorry.
`
`The binders
`
`- - -
`MICHAEL RYAN, DIRECT EXAMINATION
`BY MR. CARDEN:
`Good afternoon, Mr. Ryan.
`Q.
`Good afternoon.
`A.
`Could you state your full name for the record,
`Q.
`please?
`Michael Gerard Ryan.
`A.
`And who do you work for, Mr. Ryan?
`Q.
`Trading Technologies.
`A.
`And if I refer to it as TT today, you'll
`Q.
`understand that I'm referring to Trading Technologies?
`Yes.
`A.
`And I don't know if maybe you could raise
`Okay.
`Q.
`the microphone towards you a little bit, I think we
`might be having trouble.
`Is that better?
`A.
`Very much better.
`Q.
`Okay.
`A.
`How long have you been with TT?
`Q.
`Since November of 1999.
`A.
`And what is your current position there?
`Q.
`
`Thank you.
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`15:50:28
`
`15:50:30
`
`15:50:31
`
`15:50:31
`
`15:50:31
`
`15:50:31
`
`15:50:48
`
`15:50:49
`
`15:50:49
`
`15:50:51
`
`15:50:51
`
`15:50:53
`
`15:50:55
`
`15:50:57
`
`15:51:00
`
`15:51:02
`
`15:51:03
`
`15:51:04
`
`15:51:07
`
`15:51:09
`
`15:51:09
`
`15:51:11
`
`15:51:11
`
`15:51:12
`
`15:51:14
`
`Page 14 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`586
`
`BY MR. CARDEN:
`And could you read the patent numbers for us?
`Q.
`Yes.
`It's U.S. patent No. 6,766,304 and
`A.
`6,772,132.
`And is 6,76- -- -766,304 the number contained on
`Q.
`Exhibit 2 in your binder?
`Yes.
`A.
`And is 6,772,132 the number contained on
`Q.
`Exhibit 1 in your binder?
`Yes.
`A.
`Could we pull up 1989, please?
`Q.
`And could you describe for the jury again, this
`
`screen?
`This is the about box that I was talking
`Yes.
`A.
`about before that also has the patent numbers and also
`the date that the software was built.
`And could you refer the jury to the date that you
`Q.
`were referring -- you discussed earlier?
`Sure.
`It's right under the version number.
`A.
`says, Built, and then July 28, 2004 and the time.
`And, again, could you show the jury where the
`Q.
`patent numbers are here?
`Yes.
`Right down here at the bottom.
`A.
`And, again, '304 is Exhibit 2?
`Q.
`Yeah, '304 is Exhibit 2 and '132 is Exhibit 1.
`A.
`
`It
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`16:03:37
`
`16:03:37
`
`16:03:39
`
`16:03:45
`
`16:03:48
`
`16:03:58
`
`16:04:06
`
`16:04:06
`
`16:04:11
`
`16:04:12
`
`16:04:13
`
`16:04:20
`
`16:04:22
`
`16:04:23
`
`16:04:25
`
`16:04:28
`
`16:04:31
`
`16:04:34
`
`16:04:37
`
`16:04:39
`
`16:04:44
`
`16:04:46
`
`16:04:47
`
`16:04:52
`
`16:04:55
`
`Page 15 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`587
`
`And, finally, could you turn to Plaintiff's
`Q.
`Exhibit 1991?
`Okay.
`A.
`And tell the jury what this screen is again.
`Q.
`This is the MD Trader window.
`A.
`And could you describe for the jury where the
`Q.
`marking occurs on this screen?
`Again, this occurs at the very bottom right here
`A.
`(indicating).
`And if we could just blow that up a little bit,
`Q.
`Brian?
`
`A little fuzzy, but, again, it appears to be the
`'304 patent and the '132 patent, which are Exhibits 1
`and 2 or vice versa?
`Yes, yes.
`A.
`Now, could you turn in your
`MR. CARDEN:
`binder to PTX 9.
`And again, your Honor, this is agreed,
`so if we could have that on the screen?
`BY MR. CARDEN:
`Can you tell me if you recognize this particular
`Q.
`document?
`I do.
`A.
`What is that document?
`Q.
`This is a sales brochure or marketing brochure
`A.
`from eSpeed, which I picked up one day on the floor of
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`16:04:59
`
`16:05:02
`
`16:05:05
`
`16:05:06
`
`16:05:08
`
`16:05:12
`
`16:05:14
`
`16:05:16
`
`16:05:20
`
`16:05:21
`
`16:05:24
`
`16:05:31
`
`16:05:35
`
`16:05:38
`
`16:05:40
`
`16:05:44
`
`16:05:46
`
`16:05:49
`
`16:05:49
`
`16:05:54
`
`16:05:56
`
`16:06:05
`
`16:06:07
`
`16:06:09
`
`16:06:13
`
`Page 16 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`588
`
`It's a copy of it.
`the Board of Trade.
`And you mentioned you picked it up on the Board
`Q.
`of Trade.
`Could you describe what the circumstances
`were for you picking that up?
`Sure.
`I recall one morning in August -- I think
`A.
`it was August 4th of 2004 -- my office at TT happened to
`be right outside of the sales group, which could be
`rather noisy from time to time.
`And on this particular
`morning there was a lot of talk going on, and that talk
`was about a booth that was up at the Board of Trade on
`the trading floor.
`I -- one of the salesmen told me about it and
`asked if I wanted to go see it.
`And I said, yes, I
`would.
`And the reason -- the reason for it and the
`reason for the booth is that they were displaying their
`new futures screen, which the sales people had been
`telling me looked like our MD Trader.
`Okay.
`Could we turn to page 30003 in the
`Q.
`Exhibit 9?
`Is this the screen that was being referred to?
`Yes, it is.
`A.
`And did you indeed see that screen on the floor
`Q.
`of the Board of Trade?
`I did, yeah.
`What happened was this salesman
`A.
`asked if I wanted to go see it.
`I indicated I did, went
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`16:06:17
`
`16:06:20
`
`16:06:23
`
`16:06:25
`
`16:06:26
`
`16:06:31
`
`16:06:36
`
`16:06:43
`
`16:06:46
`
`16:06:49
`
`16:06:54
`
`16:06:57
`
`16:07:02
`
`16:07:05
`
`16:07:07
`
`16:07:10
`
`16:07:13
`
`16:07:16
`
`16:07:21
`
`16:07:23
`
`16:07:32
`
`16:07:35
`
`16:07:37
`
`16:07:38
`
`16:07:43
`
`Page 17 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`589
`
`over to the Board of Trade with him, signed in at the
`security desk on the first floor at the Board of Trade
`building, went I believe -- I believe we went down -- I
`think you have to go down to get to the trading floor,
`signed in again at another security station, and walked
`into the trading floor.
`What did you see there, Mr. Ryan?
`Q.
`At the trading floor?
`A.
`Yeah.
`Q.
`Well, the first thing I saw was the trading pit
`A.
`for agriculture products, which was -- it was
`interesting at the time, because it was very active.
`There were a lot of people there buying and selling and
`yelling at each other and using their hand signals to
`buy and sell the products.
`So that was an open outcry pit?
`Q.
`Yes, that was an open outcry pit; that's right.
`A.
`And what did you do next?
`Q.
`We then walked further on on the floor where
`A.
`we -- where at the far end, which we didn't quite get
`to, there was another open outcry pit, which I noticed,
`And it turns out
`even then, was not nearly as active.
`that that was one of the products that was actually
`But in
`being traded electronically more actively.
`between those two pits we saw this stand that had been
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`16:07:46
`
`16:07:49
`
`16:07:52
`
`16:07:56
`
`16:07:59
`
`16:08:03
`
`16:08:05
`
`16:08:07
`
`16:08:08
`
`16:08:09
`
`16:08:14
`
`16:08:19
`
`16:08:21
`
`16:08:23
`
`16:08:26
`
`16:08:27
`
`16:08:30
`
`16:08:32
`
`16:08:34
`
`16:08:40
`
`16:08:44
`
`16:08:47
`
`16:08:50
`
`16:08:51
`
`16:08:56
`
`Page 18 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`590
`
`set up by eSpeed.
`Did you go up to the stand?
`Q.
`Yes.
`When I first arrived there, I saw there
`A.
`were -- this was the stand.
`There were screens behind
`the stand where there was a display of software
`products, including the product that is displayed on
`this exhibit TT 30003.
`When I first walked up, there
`were other people right up at the stand getting a
`demonstration, and I recall kind of watching as they
`were getting their demonstration kind of looking over
`their shoulder.
`Could you describe for the jury what you saw as
`Q.
`you were looking over the shoulders?
`Well, sure.
`On one of the screens I saw this
`A.
`trading screen, which was notable to me, because, in
`fact, I agreed it looked a heck of a lot like MD Trader;
`as I noticed as the market would move, the bids and asks
`would move up and down, the price column and those
`prices would stay the same.
`And just so we can maybe give a little refresher
`Q.
`here, when you say bids and asks are moving, can you
`look at the screen here and remind us where you're
`talking about?
`The green column are the bids that are in
`Sure.
`A.
`the market; and the red column are the asks in the
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`16:09:02
`
`16:09:05
`
`16:09:06
`
`16:09:13
`
`16:09:15
`
`16:09:18
`
`16:09:21
`
`16:09:28
`
`16:09:29
`
`16:09:33
`
`16:09:36
`
`16:09:37
`
`16:09:39
`
`16:09:41
`
`16:09:44
`
`16:09:52
`
`16:09:56
`
`16:10:00
`
`16:10:04
`
`16:10:05
`
`16:10:08
`
`16:10:11
`
`16:10:13
`
`16:10:14
`
`16:10:19
`
`Page 19 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`591
`
`market, which basically means -- now that I'm up here,
`I'll probably screw this up, I'm not a trader -- but the
`bids are the orders in the market that people are
`willing to buy the product for and the asks are the
`orders that are in the market that people are willing to
`sell the product for.
`And the center column again?
`Q.
`That's the price column (indicating).
`A.
`So could you remind the jury what portion of the
`Q.
`screen was moving?
`Sure.
`Well, the center column the prices stayed
`A.
`the same.
`So, in other words, this 60 stayed right
`there.
`And then the bid and the ask quantities would
`either move up or down as the market moved up or down.
`Do you recall who was giving the demonstration?
`Q.
`I -- I don't recall who was giving the
`A.
`demonstration to the people in front of me, no.
`I mean, what happened next -- shall I?
`What happened next, Mr. Ryan?
`Q.
`What happened next was that when those people
`A.
`were finished, I walked up to the booth -- and I was the
`first person in line -- and before I said anything, one
`of the people behind the counter asked me if I was
`familiar with Trading Technologies.
`And what did you say?
`Q.
`
`But --
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`16:10:23
`
`16:10:27
`
`16:10:29
`
`16:10:34
`
`16:10:37
`
`16:10:39
`
`16:10:41
`
`16:10:43
`
`16:10:46
`
`16:10:48
`
`16:10:50
`
`16:10:53
`
`16:10:56
`
`16:11:01
`
`16:11:05
`
`16:11:09
`
`16:11:11
`
`16:11:15
`
`16:11:19
`
`16:11:20
`
`16:11:22
`
`16:11:24
`
`16:11:28
`
`16:11:31
`
`16:11:33
`
`Page 20 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`592
`
`Well, I was a little surprised, but I said, Well,
`A.
`yes, I am.
`And he said, Well, our screen is the exact
`same thing, which was --
`I'm sorry.
`I didn't mean to cut your answer off.
`Q.
`I was just going to say which was, again, a
`A.
`little bit surprising.
`Did you get the gentleman's name by any chance?
`Q.
`Yeah.
`His name was Scott Arnold.
`A.
`Was anyone else at the booth?
`Q.
`There were other people at the booth, but I don't
`A.
`recall the names.
`I remember two or three other people
`behind the booth.
`Did you speak to any of them?
`Q.
`No.
`A.
`So what happened after Mr. Arnold told you that
`Q.
`the screen was just like TT's?
`I mean -- again, he said it was the exact same
`A.
`thing, but he -- he gave me a little demo of it as I
`recall, again, just kind of showing me the same thing
`that I had already seen.
`But that didn't take very
`long, because what happened shortly after that is that
`I -- I saw somebody that I knew who was on the floor,
`somebody who used to work at TT with me, and I walked
`over and started to talk to him.
`In fact, he gave me a
`little bit of a tour of the trading floor.
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`16:11:35
`
`16:11:37
`
`16:11:40
`
`16:11:43
`
`16:11:45
`
`16:11:47
`
`16:11:48
`
`16:11:51
`
`16:11:53
`
`16:11:54
`
`16:11:59
`
`16:12:03
`
`16:12:03
`
`16:12:04
`
`16:12:05
`
`16:12:08
`
`16:12:11
`
`16:12:15
`
`16:12:19
`
`16:12:20
`
`16:12:23
`
`16:12:27
`
`16:12:30
`
`16:12:33
`
`16:12:36
`
`Page 21 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`593
`
`How did you get
`
`And I don't think I've heard.
`Q.
`the brochure?
`Well, after that tour, I remember coming back to
`A.
`the booth and I remember, again, Mr. Arnold indicating a
`couple things.
`One was the price of the product that
`was coming out, the futures product, as well as he also
`showed a cash screen, which was to be used for trading
`the cash product that eSpeed provided on their exchange.
`Why don't we talk about that, because I think you
`Q.
`said a couple things.
`Let's try to break it up a little
`bit.
`
`You mentioned the price of the futures product.
`What did he tell you about the price of the futures
`product?
`He told me that for people who were going to
`A.
`license the futures trading screen alone that the price
`was going to be $300 a month per screen.
`But that for
`those who would trade both the cash product and the
`futures product, it would be free.
`And can you remind us a little bit about the
`Q.
`difference between the cash and the futures product?
`Yeah.
`I mean -- again, I'm not a trader, so this
`A.
`is just my very basic understanding.
`But basically the
`futures product is a derivative of the cash product, or
`it's a -- yeah, it's a derivative of the cash product.
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`16:12:40
`
`16:12:42
`
`16:12:44
`
`16:12:47
`
`16:12:53
`
`16:12:58
`
`16:13:03
`
`16:13:08
`
`16:13:12
`
`16:13:14
`
`16:13:16
`
`16:13:16
`
`16:13:18
`
`16:13:20
`
`16:13:21
`
`16:13:24
`
`16:13:29
`
`16:13:33
`
`16:13:36
`
`16:13:38
`
`16:13:41
`
`16:13:43
`
`16:13:46
`
`16:13:52
`
`16:13:55
`
`Page 22 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`594
`
`So on eSpeed people would trade actual bonds and
`notes, it's my understanding, treasury bonds and
`treasury notes, and then at the Board of Trade some of
`the most successful products that they trade are
`actually the future contracts of those exact same cash
`bonds and notes.
`Okay.
`So returning to Mr. Arnold's discussion of
`Q.
`price, it was people who traded cash on the eSpeed
`exchange would get a rebate, essentially, of the fee for
`trading on the futures side of the coin?
`Yeah.
`I mean, he said it would be free, yeah.
`A.
`And the other thing you mentioned was a cash
`Q.
`product.
`Can you tell us what you meant by that?
`The cash product?
`A.
`That Mr. Arnold told you about.
`Q.
`Oh, yeah.
`Yeah, they didn't have that product up
`A.
`on a computer screen, but what he showed me was a
`printout of the layout of what that product was going to
`And he indicated that that was going to be
`look like.
`available within a couple of weeks.
`I think he said two
`to three weeks.
`What did the screen shot look like?
`Q.
`It looked -- to me it looked identical to the
`A.
`futures screen that we see here up on the screens.
`And did he tell you anything else that day?
`Q.
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`16:13:58
`
`16:14:02
`
`16:14:05
`
`16:14:08
`
`16:14:11
`
`16:14:15
`
`16:14:16
`
`16:14:20
`
`16:14:22
`
`16:14:26
`
`16:14:30
`
`16:14:33
`
`16:14:36
`
`16:14:38
`
`16:14:40
`
`16:14:42
`
`16:14:47
`
`16:14:52
`
`16:14:55
`
`16:14:58
`
`16:15:01
`
`16:15:01
`
`16:15:03
`
`16:15:06
`
`16:15:10
`
`Page 23 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`595
`
`But it was at that time
`Not that I recall, no.
`A.
`that I picked up a brochure and other things that they
`had -- whatever they had at the booth, I picked up,
`including this brochure.
`Was that the -- did you do anything else at the
`Q.
`Board of Trade that day?
`No, I think I -- I think that was it.
`A.
`MR. CARDEN:
`I have no further questions for
`Mr. Ryan at this time.
`
`- - -
`MICHAEL RYAN, CROSS-EXAMINATION
`
`BY MR. ALY:
`May it please the Court, good afternoon,
`Q.
`Mr. Ryan.
`My name is Imran Aly.
`I represent the eSpeed
`defendants in this case.
`Good afternoon.
`A.
`You were describing to the jury a meeting that
`Q.
`you had at the Chicago Board of Trade on August 4th,
`2004; is that right?
`I mean, I don't know if -- I wouldn't call it a
`A.
`meeting, but, yeah, I was describing when I was there
`and what happened, yes.
`And when you went to the Chicago Board of Trade,
`Q.
`you said that you went through some security and then
`you saw some trading pits; is that right?
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`16:15:15
`
`16:15:18
`
`16:15:22
`
`16:15:24
`
`16:15:28
`
`16:15:30
`
`16:15:33
`
`16:15:37
`
`16:15:39
`
`16:15:39
`
`16:15:39
`
`16:15:45
`
`16:15:45
`
`16:16:03
`
`16:16:07
`
`16:16:08
`
`16:16:09
`
`16:16:12
`
`16:16:16
`
`16:16:18
`
`16:16:21
`
`16:16:23
`
`16:16:24
`
`16:16:27
`
`16:16:30
`
`Page 24 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 25 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 26 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 27 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 28 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 29 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 30 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 31 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 32 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Exhibit 2
`
`Page 33 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 34 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 35 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 36 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`
`
`Page 37 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 38 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 39 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 40 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 41 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 42 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 43 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 44 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 45 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 46 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 47 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 48 of 48
`
`TRADING TECH EXHIBIT 2172
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
