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`Page 1
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` IN THE UNITED STATES DISTRICT COURT
` NORTHERN DISTRICT OF ILLINOIS
` EASTERN DIVISION
`
`
`
` TRADING TECHNOLOGIES )
` INTERNATIONAL, INC., )
` )
` )
` Plaintiff, )
` )
` vs. ) No. 05-cv-4811
` )
` CQG, INC. and CQGT, LLC, )
` )
` )
` Defendants. )
`
` HIGHLY CONFIDENTIAL ATTORNEYS' EYES ONLY
`
`
`
` VIDEOTAPED DEPOSITION
`
` STEVEN VAN DUSEN
`
` January 20, 2015
`
` Chicago, Illinois
`
`
`
`Reported by:
`
`April M. Metzler
`
`Job no: 13170
`
`TransPerfect Legal Solutions
`212-400-8845 - Depo@TransPerfect.com
`
`Page 1 of 21
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`TRADING TECH EXHIBIT 2292
`IBG et al. v. TRADING TECH. - CBM2016-00054
`
`
`
`Page 1
`
` IN THE UNITED STATES DISTRICT COURT
` NORTHERN DISTRICT OF ILLINOIS
` EASTERN DIVISION
`
`
`
` TRADING TECHNOLOGIES )
` INTERNATIONAL, INC., )
` )
` )
` Plaintiff, )
` )
` vs. ) No. 05-cv-4811
` )
` CQG, INC. and CQGT, LLC, )
` )
` )
` Defendants. )
`
` HIGHLY CONFIDENTIAL ATTORNEYS' EYES ONLY
`
`
`
` VIDEOTAPED DEPOSITION
`
` STEVEN VAN DUSEN
`
` January 20, 2015
`
` Chicago, Illinois
`
`
`
`Reported by:
`
`April M. Metzler
`
`Job no: 13170
`
`TransPerfect Legal Solutions
`212-400-8845 - Depo@TransPerfect.com
`
`Page 1 of 21
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`TRADING TECH EXHIBIT 2292
`IBG et al. v. TRADING TECH. - CBM2016-00054
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`Page 2
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` The videotaped deposition of STEVEN VAN DUSEN,
`
` called by the Defendants for examination, taken pursuant
`
` to notice and pursuant to the Federal Rules of Civil
`
` Procedure for the United States District Courts
`
` pertaining to the taking of depositions, taken before
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` April M. Metzler, Certified Shorthand Reporter,
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` Registered Professional Reporter, Certified Realtime
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` Reporter, and Notary Public, at 300 South Wacker Drive,
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` Suite 3100, Chicago, Illinois, commencing at 9:07 a.m.
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` on the 20th day of January, 2015.
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`TransPerfect Legal Solutions
`212-400-8845 - Depo@TransPerfect.com
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`Page 2 of 21
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`TRADING TECH EXHIBIT 2292
`IBG et al. v. TRADING TECH. - CBM2016-00054
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`HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
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`Page 3
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` APPEARANCES:
` McDONNELL BOEHNEN HULBERT & BERGHOFF LLP
` MR. MICHAEL D. GANNON, ESQ.
` 300 South Wacker Drive
` Chicago, Illinois 60606
` Phone: (312) 913-0001
` E-Mail: gannon@mbhb.com
`
` On behalf of the Plaintiff;
`
`
`
`
`
` TRADING TECHNOLOGIES INTERNATIONAL, INC.
` MR. STEVEN F. BORSAND, ESQ.
` 222 North Riverside Drive
` Suite 1100
` Chicago, Illinois 60606
` Phone: (312) 476-1000
` E-Mail: steve.borsand@tradingtechnologies.com
`
` On behalf of the Plaintiff, via LiveNote.
`
`
` LOEB & LOEB LLP
` MR. WILLIAM J. VOLLER III, ESQ.
` 321 North Clark Street
` Suite 2300
` Chicago, Illinois 60654
` Phone: (312) 464-3100
` E-Mail: wvoller@loeb.com
`
` On behalf of Defendants.
`
`
`
`
` ALSO PRESENT:
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` Mr. Christopher Thomas
`
` Mr. Jean-Louis Ziesch, videographer
`
` * * * * * *
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`Page 7
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` So the court reporter can only take down one
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` person at a time. So when I'm asking a question, I
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` would just ask that you wait for me to answer [sic]
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` before you start. And then when you're providing your
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` answer, I will try to wait until I ask the next
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` question, just so that we're not talking over each
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` other.
`
` Is that fair enough?
`
` A. Understood, yeah.
`
` Q. Okay. And then any time if you want to take a
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` break, that's fine. Just let me know.
`
` A. Okay.
`
` Q. The only thing I would ask is if there's a
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` question pending, I would like an answer to that prior
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` to the break. Is that fair?
`
` A. Absolutely.
`
` Q. Okay. Is there anything that would prevent
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` you from testifying truthfully and accurately today?
`
` A. No.
`
` Q. Who were you retained by in this case?
`
` A. Loeb and Loeb.
`
` Q. Okay. And when was that?
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` A. The first discussion was last spring, and then
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` I think I started doing work for these guys over the
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`TransPerfect Legal Solutions
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` summer, July or August.
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` Q. Okay. And who was it that contacted you? How
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` did that -- How did that initial contact come about?
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`Page 8
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` Would you --
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` A. Anne Kelly --
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` Q. -- describe that?
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` A. Anne Kelly's an attorney at Loeb and Loeb and
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` he's a neighbor --
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` Q. Oh.
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` A. -- and an acquaintance.
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` Actually, I was -- I was working in New York
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` City and my family stayed behind. I was commuting, and
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` he met my wife. And I think this is when I was in New
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` York and he found out I was a securities trader, and
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` then we had talked. We had met. I had never met him.
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` We met after that and he asked me if I would be
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` interested. And I said, Sure, I could help out.
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` Q. Okay. Are you guys neighbors?
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` A. He lives down the street.
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` Q. In -- In --
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` A. Yeah.
`
` Q. In Wilmette?
`
` A. Winnetka.
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` Q. Winnetka?
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`TransPerfect Legal Solutions
`212-400-8845 - Depo@TransPerfect.com
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`Page 5 of 21
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`Page 9
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` A. Yeah.
`
` Q. Are you and Mr. Kelly friends or --
`
` A. No. I would -- I would call us acquaintances.
`
` Q. Okay. And what is it that he asked you to do
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` when he -- when he contacted you?
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` A. He said, Would you be willing to offer, you
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` know, com- -- commentary on the needs of an electronic
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` trader and product knowledge, you know, things of that
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` nature.
`
` Q. Anything else?
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` A. No.
`
` Q. I'll mark as Plaintiff's Exhibit 2457, a
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` subpoena of Mr. Van Dusen.
`
` Mr. Van Dusen, I'm handing you what's been
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` marked as PDX2457. It's a subpoena to you for
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` documents.
`
` Do you recognize it?
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` A. This is the first time I've seen it.
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` MR. VOLLER: Do you have a copy, Counsel?
`
` MR. GANNON: Yeah, I do. I'm sorry.
`
` MR. VOLLER: Thank you.
`
` BY MR. GANNON:
`
` Q. So you've never seen this document before?
`
` A. No. Uh-uh.
`
`TransPerfect Legal Solutions
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` Q. On the last page of the document, there's a
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`Page 10
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` request for production.
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` Do you see that?
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` A. Mm-hmm (nodding).
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` Yes.
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` Q. So what that is, is, we ask that you look
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` through your files to see if you had any -- any of this
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` information in your files.
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` Did you ever look to see if you had any of
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` these documents?
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` A. I have not.
`
` Q. Okay.
`
` MR. GANNON: Mr. Voller, are you going to be
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` looking to produce documents pursuant to this subpoena?
`
` MR. VOLLER: Mr. Gannon, as you know, TT has been
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` aware of Mr. Van Dusen's existence since the end of
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` 2014. We received the subpoena on Saturday evening. I
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` think it was close to 10:00 p.m. Today is Tuesday
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` morning. We haven't had time to meet with Mr. Van Dusen
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` nor has Mr. Van Dusen's schedule been conducive to allow
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` us to identify documents that may or may not be
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` responsive to this subpoena.
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` However, it is our intention to work with
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` Mr. Van Dusen to prepare and provide responsive
`
`TransPerfect Legal Solutions
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`Page 7 of 21
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`TRADING TECH EXHIBIT 2292
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` documents in a prompt manner.
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` MR. GANNON: Okay. That's fine.
`
` Do you have any documents today? I take it
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`Page 11
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` the answer is no to that.
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` MR. VOLLER: Not today.
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` MR. GANNON: Okay.
`
` BY MR. GANNON:
`
` Q. But, Mr. Van Dusen, you will at some point
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` take a look at the subpoena and see if there are
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` responsive documents and produce them?
`
` A. Of course.
`
` Q. Okay. Fair enough.
`
` Did you sign an engagement letter with Loeb
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` and Loeb?
`
` A. I believe so, yes.
`
` Q. When was that, do you recall?
`
` A. If I recall, it was in the summertime. I
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` can't remember the exact date.
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` Q. Do you know -- and we don't have your records,
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` obviously, and at some point we'll get them, but ...
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` Do you have any idea how much you've been paid
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` by Loeb and Loeb in this matter? And I'm -- I'm not
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` going to hold you, to -- obviously, to --
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` A. Yeah.
`
`TransPerfect Legal Solutions
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`Page 8 of 21
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`TRADING TECH EXHIBIT 2292
`IBG et al. v. TRADING TECH. - CBM2016-00054
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`HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY
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`Page 12
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` Q. -- an exact number.
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` A. I appreciate that.
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` Q. Yeah.
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` A. I'd guess it's less than 20,000. Like,
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` between -- between 15 and 20.
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` Q. Okay.
`
` MR. GANNON: Let's mark as Plaintiff's
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` Exhibit 2458 the report of Steven Van Dusen.
`
` BY MR. GANNON:
`
` Q. Mr. Van Dusen, I'm handing you what's been
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` marked as PDX2458.
`
` A. Thank you.
`
` Q. Do you recognize that document?
`
` A. Yes.
`
` Q. And that is your report in this case?
`
` A. Yep. Yes, it is.
`
` Q. In paragraph 4 of your report, you indicate
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` that you're being compensated at a rate of $300 per hour
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` for expert witness analysis and consultation work.
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` Is -- Is there a difference between the two,
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` expert witness analysis and consultation work?
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` MR. VOLLER: Form.
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` BY MR. GANNON:
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` Q. If you know.
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`TRADING TECH EXHIBIT 2292
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` A. To be honest with you, I'm not -- I come from
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` a family of attorneys, but -- but I'm not, so I don't --
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` I'm not sure I really understand the question.
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` Q. Okay. Well, I guess what I'm getting at is,
`
` aside from your work for Loeb and Loeb in this case, do
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` you do any consulting work for CQG?
`
` A. No.
`
` Q. Okay. That's what I was getting at because --
`
` A. Yes.
`
` Q. Have you ever done any consulting work for
`
` CQG?
`
` A. No. In fact, before this case, I had never
`
` met anyone from CQG. We used some -- I didn't. I used
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` Bloomberg at Getco, but we have traders that use their
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` analytics. And I -- I didn't even know anybody that
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` worked there.
`
` Q. Okay. So I take it you don't have any
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` professional relationship with CQG?
`
` A. No.
`
` Q. Or any other type of relationship with CQG?
`
` A. No.
`
` Q. Have you had any dealings with CQG prior to
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` this case as --
`
` MR. VOLLER: Form.
`
`TransPerfect Legal Solutions
`212-400-8845 - Depo@TransPerfect.com
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`Page 10 of 21
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`TRADING TECH EXHIBIT 2292
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`Page 106
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` market. I believe that this -- this product is worth X,
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` so I'm going to bid below X and I'm going to offer above
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` X.
`
` Q. Okay. So is it fair to say that the TT
`
` patents are not trying to stop anybody from performing
`
` those strategies?
`
` MR. VOLLER: Form.
`
` BY MR. GANNON:
`
` Q. Is that a fair statement?
`
` MR. VOLLER: Form.
`
` BY THE WITNESS:
`
` A. Is it -- Is it fair to say that the T- -- TT
`
` patents are not attempting to prevent anyone from
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` performing those strategies? Aga- -- I'm really -- I'm
`
` not even sure what you mean. I'm not even sure how to
`
` answer that.
`
` Q. Well, you mentioned that the technology in the
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` patents --
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` A. Well, could I -- I mean --
`
` Q. Yeah.
`
` A. It seems so obvious, no, it doesn't seem like
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` that, but I guess I want to clarify what you mean.
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` I'm just wondering if there's something I'm
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` missing in the question.
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`Page 107
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` Q. Yeah. No, I understand. I'm just trying to
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` figure out ...
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` So do you understand that a patent gives
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` somebody the right to exclude others from doing what the
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` patent invention -- what's claimed in the patent? Do
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` you have a general understanding of that?
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` MR. VOLLER: Form and --
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` BY THE WITNESS:
`
` A. That's my --
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` MR. VOLLER: -- scope.
`
` BY THE WITNESS:
`
` A. That's my general understanding, yes.
`
` Q. Right.
`
` That you put information in a patent, and if
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` the patent gets issued, the inventor then can go out and
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` stop people from either making, using, or selling the
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` ideas that are in the patents?
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` MR. VOLLER: Form and scope.
`
` BY MR. GANNON:
`
` Q. Is that a fair statement?
`
` A. Based on my -- my limited understanding of the
`
` field, yes.
`
` Q. Yeah.
`
` So -- So getting back to what we were talking
`
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`Page 108
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` about with the strategies --
`
` A. Mm-hmm.
`
` Q. -- these general strategies --
`
` A. Right.
`
` Q. -- that you were talking about --
`
` A. Mm-hmm.
`
` Q. -- is it fair to say that the -- And you've
`
` reviewed the patents, right?
`
` A. (Nodding.)
`
` MR. VOLLER: Form.
`
` BY THE WITNESS:
`
` A. I looked at them, yeah.
`
` Q. Yeah. And you've talked about how they -- the
`
` patents deal with a static price column, a dynamic
`
` display of depth of bids and asks of each price and
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` single-click order entry?
`
` A. Yes.
`
` Q. Is it fair to say that the -- that the TT
`
` patents are not trying to stop or preclude anybody from
`
` doing these strategies of -- of which you've provided --
`
` A. The two -- The two that I mentioned?
`
` Q. Yeah.
`
` MR. VOLLER: Form.
`
` BY THE WITNESS:
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` A. I think that is a fair statement.
`
` Q. Okay. Is it fair to say that the TT patents
`
` do not attempt to prevent others from performing all
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` forms of electronic trading?
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` MR. VOLLER: Form, scope.
`
` BY THE WITNESS:
`
` A. I want to make sure I get this right. Could
`
` you please repeat that?
`
` Q. Sure.
`
` Is it fair to say that the TT patents do not
`
` attempt to prevent others from performing all different
`
` types of electronic trading?
`
` MR. VOLLER: Form, scope.
`
` BY THE WITNESS:
`
` A. My -- My response to that would be -- And I'm
`
` sorry I'm taking so long. It just seems obvious, so I'm
`
` just wondering if I'm missing something -- Yes,
`
` because -- When were the patients issued? I think,
`
` '04 -- '03/'04?
`
` Q. Yeah. And I have them here if you would like
`
` to look at them.
`
` A. That's okay. That's okay. And algorithmic
`
` trading continued to evolve and grow over that period,
`
` so obviously those patents did not inhibit that.
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` Q. Yeah. That's what I was getting at, yeah. I
`
` appreciate that.
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` Is it fair to say that the technology
`
` described in the patents is directed to a specific type
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` of graphical user interface for order entry?
`
` MR. VOLLER: Form, scope.
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` BY THE WITNESS:
`
` A. Based on my understanding, yes, point and
`
` click, static display of prices, dynamic indicators
`
` meaning the size has changed, single-click order entry,
`
` yes.
`
` Q. Right. So the -- Right.
`
` And so the -- the TT patents are directed to
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` that specific type of arrangement of elements on a
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` graphical user interface, is that a fair statement?
`
` MR. VOLLER: Form, scope.
`
` BY THE WITNESS:
`
` A. That's my understanding, correct.
`
` Q. Okay. Is it fair to -- in your view, to
`
` characterize the -- the specific type of graphical user
`
` interface in the TT patents as a -- as a trading tool?
`
` MR. VOLLER: Form, scope.
`
` BY THE WITNESS:
`
` A. Is it fair to describe the interface
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` depict- -- depicted in the patents as a trading tool?
`
` Q. Yes.
`
` A. I would say that's -- that's a fair statement,
`
` yes.
`
` Q. And -- And why is that? Just to get your
`
` understanding, why do you -- why do you think that?
`
` A. Well, there's many tools that you would use in
`
` trading. That's one of them that allows to you enter
`
` orders into the marketplace, allows you to, you know,
`
` lift an offer, allows you to place a bid.
`
` Q. Do you know whether the patents -- the TT
`
` patents can be used with liquid products?
`
` MR. VOLLER: Form, scope.
`
` BY THE WITNESS:
`
` A. Could you -- Could you clarify what you mean
`
` there? What do you mean by liquid products?
`
` Q. Yeah. That's -- That's a great question back
`
` to me. I should ask you: Do you have an understanding
`
` of what a liquid product is in trading versus an
`
` illiquid product?
`
` A. Yes.
`
` Q. Okay. So what's -- Let's go with your
`
` understanding.
`
` A. Okay. Liquid product would be the ten-year
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` future or the ZN, or the S&P 500 future, or -- or any
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` one of the -- any one of the first -- you know, first
`
` three or four years of Euro dollars would be highly
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` liquid.
`
` An illiquid product would be -- Let's talk
`
` about real estate. You know, that's not always very
`
` liquid. I cited that in my report. I even traded
`
` lumber. I play hockey with a guy that's down there in
`
` that pit and I understand that product can get illiquid
`
` too.
`
` Q. Can you give an example of objects that you
`
` trade with a -- with a GUI for an electronic trading
`
` that's in an illiquid product?
`
` You know, I don't know if that question made
`
` sense.
`
` A. No. No. No. Let me repeat it back and make
`
` sure I got it correctly.
`
` Can I give an example of a product that's
`
` illiquid where you can use a GUI to trade in?
`
` Q. Yeah, that's -- that's right. That's what I
`
` was asking. Very good.
`
` A. I'll give -- I'll give you an example.
`
` Q. Okay.
`
` A. Products can be liquid and then illiquid
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` Q. And if the inside market goes off the screen,
`
` doesn't that suggest that the price levels aren't
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` moving?
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` MR. VOLLER: Form, scope.
`
` BY THE WITNESS:
`
` A. I'm sorry. Could you repeat that question?
`
` Q. Sure.
`
` If the inside market goes off the screen,
`
` doesn't that suggest that the price levels aren't
`
` moving?
`
` A. It suggests --
`
` MR. VOLLER: Form, scope.
`
` BY THE WITNESS:
`
` A. -- that they are moving.
`
` Q. The price levels?
`
` A. Well, yeah. If -- If the inside market goes
`
` off the screen, that suggests the prices are moving.
`
` MR. GANNON: Can we take a short break?
`
` MR. VOLLER: Okay.
`
` THE VIDEOGRAPHER: It is 2:22 p.m. We go off the
`
` record.
`
` (A short break was had.)
`
` THE VIDEOGRAPHER: This is the beginning of tape
`
` number 5 of testimony of Steve Van Dusen. It is
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` 2:37 p.m. We go -- We go on the record.
`
` MR. GANNON: Okay. We're back on the record.
`
` BY MR. GANNON:
`
` Q. Mr. Van Dusen, with regard to MD Trader -- and
`
` I don't want to mischaracterize or -- or misstate what
`
` you've already said about MD Trader, but I just wanted
`
` to raise the issue again and then ask you a follow-up
`
` question about it.
`
` Is it fair to say -- and I believe you
`
` testified about this earlier -- that MD Trader was an
`
` improvement over prior systems?
`
` MR. VOLLER: Form.
`
` BY THE WITNESS:
`
` A. That's my understanding, that's accurate.
`
` Q. And is it also fair to say that MD Trader
`
` enjoyed commercial success in the industry?
`
` MR. VOLLER: Form.
`
` BY THE WITNESS:
`
` A. Impossible for me to know, but would seem
`
` logical.
`
` Q. Okay. Why is that?
`
` MR. VOLLER: Form.
`
` BY THE WITNESS:
`
` A. Why would it seem logical? Just, you know,
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` the knowledge I know of the industry and the footprint.
`
` It seems, like, among that genre of traders, during that
`
` window of time when we were transitioning from open
`
` outcry and pit trading to electronic trading, it seemed
`
` to have a -- it seemed to have a pretty strong following
`
` among that genre.
`
` Q. Why is it that MD Trader was an improvement
`
` over prior systems?
`
` MR. VOLLER: Form.
`
` BY MR. GANNON:
`
` Q. I'm just asking if you know why.
`
` A. Yeah. It seems to me that the reason was, is
`
` it facilitated more precision in execution. Because the
`
` prices weren't moving, that axis was static, it allowed
`
` traders better precision in terms of their execution,
`
` which is an absolute must.
`
` Q. Did MD Trader have an impact on the
`
` industry -- the electronic trading industry?
`
` MR. VOLLER: Form.
`
` BY THE WITNESS:
`
` A. It's somewhat difficult for me to answer that
`
` because I didn't use it. It wasn't prevalent at the
`
` firms that I worked at. But it would seem logical for a
`
` window of time, when we were evolving from open outcry
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` and the guys were transitioning from the pits to sitting
`
` at desks upstairs, that it would have -- it would have
`
` been a -- a preferred mode of execution for them.
`
` Q. A preferred mode of execution for them over
`
`Page 176
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` what?
`
` MR. VOLLER: Form.
`
` BY THE WITNESS:
`
` A. Other types of point-and-click software.
`
` That's my impression from reading those decs. You know,
`
` guys cited competitors; they cited competitors coming
`
` and saying, we're going to replicate what they have. I
`
` have no reason to dispute that.
`
` Q. Okay. I'm going to go back to the changing
`
` the size of the -- of the Market Pane issue that we were
`
` talking --
`
` A. Sure.
`
` Q. -- before the break.
`
` Would your opinion change in any way if you
`
` learned that traders were actually instructed to make
`
` the Market Pane as large as the DOM Grid?
`
` MR. VOLLER: Form, scope.
`
` BY THE WITNESS:
`
` A. I wouldn't -- I wouldn't even know how to
`
` answer that because I don't know why you would instruct
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`TRADING TECH EXHIBIT 2292
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