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` UNITED STATES PATENT AND TRADEMARK OFFICE
` BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
` IBG LLC; INTERACTIVE BROKERS LLC;
` TRADESTATION GROUP, INC.; and TRADESTATION
` SECURITIES, INC.;
`
` Petitioner
`
` v.
`
` TRADING TECHNOLOGIES INTERNATIONAL, INC.
`
` Patent Owner
`
` CBM2016-00032 (Patent No. 7,212,999)
`
` Deposition of CHRISTOPHER H. THOMAS, taken at
` McDonnell Boehnen Hulbert & Berghoff LLP,
` before Donna M. Kazaitis, CSR, RPR, CLR, and
` CRR, commencing at the hour of 12:54 p.m. on
` Friday, January 27, 2017.
`
`____________________________________________________
` DIGITAL EVIDENCE GROUP
` 1730 M Street, NW, Suite 812
` Washington, D.C. 20036
` (202) 232-0646
`
`www.DigitalEvidenceGroup.com
`
`Digital Evidence Group C'rt 2017
`
`202-232-0646
`
`IBG 1066
`IBG v. TT
`CBM2016-00054
`
`
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`IBG vs. Trading Technologies
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`Christopher Thomas
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`Page 1
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` UNITED STATES PATENT AND TRADEMARK OFFICE
` BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
` IBG LLC; INTERACTIVE BROKERS LLC;
` TRADESTATION GROUP, INC.; and TRADESTATION
` SECURITIES, INC.;
`
` Petitioner
`
` v.
`
` TRADING TECHNOLOGIES INTERNATIONAL, INC.
`
` Patent Owner
`
` CBM2016-00032 (Patent No. 7,212,999)
`
` Deposition of CHRISTOPHER H. THOMAS, taken at
` McDonnell Boehnen Hulbert & Berghoff LLP,
` before Donna M. Kazaitis, CSR, RPR, CLR, and
` CRR, commencing at the hour of 12:54 p.m. on
` Friday, January 27, 2017.
`
`____________________________________________________
` DIGITAL EVIDENCE GROUP
` 1730 M Street, NW, Suite 812
` Washington, D.C. 20036
` (202) 232-0646
`
`www.DigitalEvidenceGroup.com
`
`Digital Evidence Group C'rt 2017
`
`202-232-0646
`
`IBG 1066
`IBG v. TT
`CBM2016-00054
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`
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`Page 2
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`APPEARANCES:
`ON BEHALF OF THE PETITIONER:
` STERNE KESSLER GOLDSTEIN FOX
` BY: ROBERT SOKOHL, ESQ.
` RICHARD M. BEMBEN, ESQ.
` 1100 New York Avenue, NW
` Washington, DC 20005
` 202.371.2600
` rsokohl@skgf.com
` rbemben@skgf.com
`
`ON BEHALF OF THE PATENT OWNER:
` MCDONNELL BOEHNEN HULBERT & BERGHOFF LLP
` BY: MICHAEL D. GANNON, ESQ.
` 300 South Wacker Drive
` Chicago, Illinois 60606-6709
` 312.913.2139
` gannon@mbhb.com
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` INDEX
` PAGE
`CHRISTOPHER H. THOMAS
` Examination by Mr. Sokohl 4
` Examination by Mr. Gannon 127
`
` EXHIBITS
`TRADING TECH PAGE
`Exhibit 2169 Declaration of Christopher 7
` H. Thomas (CBM2016-00032)
`IBG
`Exhibit 1001 U.S. Patent 7,212,999 6
`Exhibit 1027 One page from the 93
` specialist book
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`(Witness sworn.)
` CHRISTOPHER H. THOMAS,
`having been first duly sworn, was examined and
`testified as follows:
` EXAMINATION
`BY MR. SOKOHL:
` Q. Good afternoon, Mr. Thomas.
` A. Good afternoon.
` Q. Could you state your name for the
`record.
` A. Christopher Hugh Thomas.
` Q. We've done this a few times --
` A. Yes.
` Q. -- so I'm going to just go through
`some quick instructions.
` Are you on any medications today?
` A. No.
` Q. Any reason why you can't give truthful
`testimony?
` A. No.
` Q. We're going to take breaks hopefully
`every hour. If you want a break, just feel free
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`to ask.
` A. Okay.
` Q. Let's try not to speak over each
`other. I think we've done a fairly good job of
`that in the past.
` A. Yes.
` Q. You need to give verbal responses,
`like you just did.
` A. Yes.
` Q. You understand you're under oath?
` A. I do.
` Q. And you have to give truthful
`testimony today?
` A. Yes.
` Q. If I ask you a question and you don't
`understand it, just ask for clarification.
` A. I will.
` Q. If you answer the question, I'm going
`to assume you understand it.
` A. Correct.
` Q. Did you prepare for this deposition?
` A. I did.
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` Q. And how did you prepare?
` A. I reviewed my declaration that was
`filed in this CBM and the information I considered
`for it, met with counsel.
` Q. And counsel would be Mr. Gannon?
` A. Mr. Gannon.
` Q. Did you meet with anyone else?
` A. I think Jennifer Kurcz for a short
`amount of time.
` Q. What documents did you review in
`preparation for this deposition?
` A. My declaration, the patent, and the
`other documents that I referred that I considered,
`in my declaration.
` Q. Thank you.
` Let me hand you what's already been
`marked as IBG 1001, which is United States Patent
`7,212,999 to Friesen, et al. (Document tendered
`to the witness.)
` MR. SOKOHL: And on the record I'd
`just like to thank counsel for helping us get a
`couple of documents. Appreciate the
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`professionalism.
` MR. GANNON: You're welcome.
`BY MR. SOKOHL:
` Q. Do you recognize this document?
` A. Yes.
` Q. Let me just hand you your declaration,
`which has been marked as Exhibit 2169. (Document
`tendered to the witness.)
` Do you recognize that document?
` A. Yes.
` Q. Is that your signature on Page 32?
` A. It is.
` Q. And is this declaration -- is the
`subject of this declaration the U.S. Patent
`7,212,999?
` A. Yes.
` Q. And if I refer to this patent as the
`'999 Patent, will you understand what I'm
`referring to?
` A. Yes.
` Q. Listed on the front page of the '999
`Patent are two inventors. Do you see that?
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` A. I do.
` Q. Mr. Friesen and Mr. Hart?
` A. Yes.
` Q. Have you ever spoken to Mr. Friesen?
` A. No.
` Q. Have you ever spoken to Mr. Hart?
` A. No.
` Q. Have you ever asked to speak to
`Mr. Friesen?
` A. No.
` Q. And have you ever asked to speak to
`Mr. Hart?
` A. No.
` Q. Turning to your declaration. Did you
`prepare this declaration?
` A. Yes.
` Q. Are these words yours or someone
`else's?
` A. They're my words.
` Q. So someone didn't prepare this for
`you?
` A. No.
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` Q. Turning back to the '999 Patent.
` A. Okay.
` Q. Does the '999 Patent relate to
`electronic trading?
` MR. GANNON: Object to the form.
` THE WITNESS: Hold on one second.
` It says the present invention
`relates generally to the field of graphical user
`interfaces, and more particular to the field of
`graphical user interfaces for electronic trading
`systems.
` So it's a bit more specific than
`that. So it's the field of graphical user
`interfaces for electronic trading systems.
`BY MR. SOKOHL:
` Q. Thank you.
` And have you read the '999 Patent?
` A. Yes.
` Q. Do all the embodiments in the '999
`Patent relate to graphical user interfaces for
`electronic trading?
` MR. GANNON: Object to the form.
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` THE WITNESS: I wasn't asked to look
`at that as part of this declaration.
`BY MR. SOKOHL:
` Q. Do you have an opinion?
` A. I haven't formed an opinion on that.
`I mean I wasn't asked to do that, so I haven't
`done that yet.
` Q. In the field of electronic trading,
`can you place a trade without market data being
`provided to you?
` MR. GANNON: Object to the form.
` THE WITNESS: I just need a bit more
`information if you don't mind.
`BY MR. SOKOHL:
` Q. Absolutely.
` A. So if you're asking a trader connected
`to an electronic exchange, can they place an order
`on that electronic exchange without market data?
`Is that what you're asking?
` Q. Correct.
` A. I guess they could call a broker or
`they could, I mean --
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` Q. Electronically could they place a
`trade without market data, that trader?
` A. I haven't actually thought about that.
`I haven't looked at that. I would have to think
`about that. I don't know.
` Q. You don't have an opinion as you sit
`here today?
` MR. GANNON: Object to the form.
` THE WITNESS: If they were -- I'd need
`a lot more information. For one reason, if they
`were placing an order at a price, they would need
`to know the price, they would need information.
` That's very general. It's very
`broad. I would need to look at that a lot
`further.
`BY MR. SOKOHL:
` Q. Do you consider yourself an expert in
`electronic trading?
` A. Yes.
` Q. Can you tell me today how a trader can
`make an electronic trade without market
`information?
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` MR. GANNON: Object to the form.
` THE WITNESS: And, again, what I'm
`saying is that's a very, very broad question and I
`would need to investigate that further because
`there's enumerable permutations that could happen.
`BY MR. SOKOHL:
` Q. Give me one example where an
`electronic trade could be made by a trader without
`market data, if you can.
` MR. GANNON: Object to the form.
` THE WITNESS: If they wanted to do a,
`perhaps a market order, they didn't care about a
`price, then they could send an order to an
`exchange at the market. But some exchanges do not
`take market orders.
` There's too many permutations or
`combinations to answer that question. I would
`need to study that.
`BY MR. SOKOHL:
` Q. Okay. So you don't have an opinion as
`to whether or not market data is essential to
`performing an electronic trade?
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` MR. GANNON: Object to the form,
`foundation.
` THE WITNESS: No. What I'm saying is
`I would need to study that to form an opinion. I
`haven't done that. It's not part of my
`declaration. And I would need time to study that
`and think about it to answer it completely.
`BY MR. SOKOHL:
` Q. Sure.
` Have you ever seen a trading GUI,
`graphical user interface, that does not display
`market data?
` MR. GANNON: Object to the form.
` THE WITNESS: Can you show me what
`you're proposing?
`BY MR. SOKOHL:
` Q. I'm asking you whether you've ever
`seen a graphical user interface for electronic
`trading that did not include market data.
` MR. GANNON: Object to the form.
` THE WITNESS: I will say that the
`types of graphical user interfaces I've seen for
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`electronic, that I've used and designed for
`electronic trading, use market data. But that
`doesn't mean you couldn't do it.
`BY MR. SOKOHL:
` Q. Have you seen or designed dozens of
`graphical user interfaces?
` A. Yes, dozens.
` Q. Hundreds?
` A. I don't think there are hundreds.
` Q. So dozens.
` A. Yes.
` Q. And all of the graphical user
`interfaces you've seen have included market data;
`correct?
` MR. GANNON: Object to the form.
` THE WITNESS: Again, I haven't studied
`this. I believe so, in some type or another.
`BY MR. SOKOHL:
` Q. When did electronic trading start?
` A. This is a very broad question too.
` Q. If you know.
` A. Yes. I'd like to explain it.
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` Q. Uh-huh.
` A. Electronic trading in the futures
`market probably started with a company called
`INTEX in maybe the end of the '80s or the
`beginning of the '90s. And then from there on it
`moved through to some of the European exchanges in
`the mid '90s for futures.
` In the U.S. it didn't start until
`1998, where at that time in the U.S. pit trading
`was still prevalent. In fact, pit trading hadn't
`changed at all, even until the mid 2000s.
`Electronic trading started in 1998 in the U.S. for
`the full regular session with the CME Globex 2
`system and the first contract was the Emini S&P
`500. And they made new contracts for electronic
`trading which traded side-by-side with the pits
`until -- in fact, the pits only disappeared really
`last year or the year before.
` So to answer your question, say in
`the mid '80s to early '90s, but with a caveat that
`there was no real takeup in the United States
`until 1998 where there was one contract, actually
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`two, and then it gradually increased
`exponentially, well, it was an exponential
`increase until two years ago.
` Q. You mentioned INTEX.
` A. Yes.
` Q. Didn't that start back in the '83, '84
`timeframe?
` A. It's possible, it's possible. I don't
`remember exactly.
` Q. You also mentioned electronic trading
`in the U.S. But certainly globally it started
`before the United States; correct?
` A. Yes.
` Q. And it was widespread prior to the
`U.S., electronic trading was widespread globally
`before the U.S.; correct?
` A. Yes.
` Q. Earlier I asked you if -- before I ask
`that, I'll ask another question. Outside the
`futures market, when did electronic trading start
`globally?
` A. You're talking about in the equities
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`market?
` Q. Any markets other than futures.
` A. Equities was early '80s.
` Q. Which exchanges in the equities?
` A. Might have been NASDAQ, Instanet, some
`of the -- there were perhaps some exchanges in
`Europe, maybe one or two in Europe, well, one in
`Europe at that time in equities. I don't recall.
`I'm not sure.
` Q. Okay. And earlier you mentioned GUIs
`that you used or designed. And let's give it a
`timeframe.
` A. Right.
` Q. Prior to April 9, 1999 which is the
`filing date of the Friesen patents.
` A. Right.
` Q. Did those GUIs that you had either
`seen or designed, did they include bid and offer
`information?
` A. Some of them did.
` Q. And why would they not have included
`bid and offer information?
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` A. Because if they were for -- if they
`were also to be used in the trading floor, they
`wouldn't be, and those contracts for trading
`floor.
` I'll give you an example, the first
`one I did, Futures Online. So Futures Online was
`an order ticket type application. They could look
`at market data, but it was always the last trade.
`And through -- the CME had an API called a Tops
`API. Through that API an order could be sent by a
`user on the Internet to the trading pit. So there
`was no bid and ask information because that was
`not disclosed, it was just the last trade.
` And then later when the Globex 2
`arrived and the CME added the electronic
`contracts, then Futures Online did provide bid and
`ask information as it was disclosed by the
`electronic exchange. And I did design that
`application, that GUI tool, yes.
` Q. But other graphical user interfaces
`used for electronic trading did include the bid
`and offer information; correct?
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` A. Some of them.
` Q. You've worked for Trading Technologies
`for -- actually I'm going to rephrase that
`question.
` You've been retained by Trading
`Technologies for the last nine years as an expert;
`correct?
` MR. GANNON: Object to the form.
` THE WITNESS: 10 years, 10 years.
`BY MR. SOKOHL:
` Q. 10 years.
` A. Yes.
` Q. How many times have you been deposed
`generally?
` MR. GANNON: Object to the form,
`scope.
` THE WITNESS: In the Trading
`Technologies?
`BY MR. SOKOHL:
` Q. Generally how many times have you been
`deposed?
` A. Nine or ten times.
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` Q. And how many times have you testified
`at trial for Trading Technologies?
` A. Twice.
` Q. In your declaration I believe you
`stated that you're not a professional expert.
` A. Right.
` Q. Is that just because the only company
`you've worked for was Trading Technologies?
` A. No.
` MR. GANNON: Object to the form. Just
`let me get the objection in. Object to the form.
` THE WITNESS: No. It's because I do
`other things.
`BY MR. SOKOHL:
` Q. Okay. So are you suggesting that
`because an expert does other things, they're not a
`professional expert?
` MR. GANNON: Object to the form.
` THE WITNESS: Well, if it's not their
`profession, then I don't believe they are a
`professional expert.
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`BY MR. SOKOHL:
` Q. How much time would an expert have to
`spend before they're a professional expert?
` MR. GANNON: Object to the form.
` THE WITNESS: I would say if they're
`spending less than half their time or a great deal
`than less than half their time on doing that, then
`I wouldn't believe they're a professional expert.
`BY MR. SOKOHL:
` Q. How much has Trading Technologies paid
`you over the last nine years -- 10 years? Excuse
`me.
` MR. GANNON: Object to the form.
` THE WITNESS: Over a million dollars.
`BY MR. SOKOHL:
` Q. Over $2 million?
` A. No.
` Q. Over a million, less than 2 million.
` A. Yes.
` Q. I believe in your declaration you
`state that you're an expert in trading graphical
`user interfaces?
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` A. In graphical user interfaces for
`electronic trading, yes.
` Q. Do you consider yourself an expert in
`all types of graphical user interfaces and
`techniques?
` A. Well, I stated I'm an expert in
`graphical user interfaces for electronic trading.
` Q. And I'm asking if you would consider
`yourself to be an expert in the broader context of
`graphical user interfaces generally?
` MR. GANNON: Object to the form,
`vague.
` THE WITNESS: I haven't really thought
`about that.
`BY MR. SOKOHL:
` Q. Do you not know if you're an expert
`generally in graphical user interfaces?
` MR. GANNON: Object to the form.
` THE WITNESS: I would need to look at
`what is required for that or another field of
`graphical user interfaces. I haven't considered
`that.
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`BY MR. SOKOHL:
` Q. Just asking your opinion as to whether
`or not you consider yourself to be an expert in
`graphical user interfaces generally.
` MR. GANNON: Object to the form, asked
`and answered.
` THE WITNESS: I don't know. As I sit
`here right now, I don't have an opinion that.
`BY MR. SOKOHL:
` Q. So you're not testifying here today as
`a graphical user expert generally?
` MR. GANNON: Object to the form,
`foundation.
` THE WITNESS: I am testifying here
`today regarding the declaration that I filed in
`this CBM proceeding in which I have been retained
`as an expert in graphical user interfaces for
`trading, electronic trading.
`BY MR. SOKOHL:
` Q. So that would be No?
` MR. GANNON: Object to the form.
` THE WITNESS: No. It's just exactly
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`what I said.
`BY MR. SOKOHL:
` Q. Do you know what a market maker is?
` A. Yes.
` Q. Is a market maker a trader?
` MR. GANNON: Object to the form.
` THE WITNESS: A market maker effects
`trades.
` THE REPORTER: "Effects"?
` THE WITNESS: Undertakes trades,
`effects trades, usually on behalf of other people.
`Well, now, I would actually like to -- you mean a
`market maker, a specialist, or what? There's
`differences.
`BY MR. SOKOHL:
` Q. Why don't you tell me what those
`differences are.
` A. A market maker can be a member of an
`exchange who is responsible for making two-way
`markets in whatever issue they're a market maker
`in. They have to provide a bid and an offer at
`all times.
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`Page 25
` For example, when I was at Stafford
`Trading, Stafford Trading was a market maker at
`the Chicago Board of Options Exchange in various
`issues there, and we had to at all times make
`two-way markets. That's a market maker.
` As a specialist, that may or may
`not make two-sided markets and who will undertake
`or execute, who will undertake orders for other
`members of the exchange or other parties, but not
`for themselves.
` Q. Is it fair to say that Mr. Friesen and
`Mr. Hart did not invent electronic trading?
` MR. GANNON: Object to the form.
` THE WITNESS: I don't think -- nothing
`is claimed about electronic trading. I'm not
`claiming electronic trading.
`BY MR. SOKOHL:
` Q. Simple question. Is it fair to say
`that they did not invent electronic trading?
` MR. GANNON: Object to the form.
` THE WITNESS: Right, yes, they didn't.
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`BY MR. SOKOHL:
` Q. Is it also fair to say they did not
`invent displaying bid and offer data on a
`graphical user interface?
` MR. GANNON: Object to the form.
` THE WITNESS: That's not what's being
`claimed in the claims of the '999 Patent. So I
`would say that's fair.
`BY MR. SOKOHL:
` Q. Did the inventors of the '999 Patent
`invent moving an icon with drag and drop?
` MR. GANNON: Object to the form,
`outside the scope.
` THE WITNESS: Now, when we talk about
`drag and drop, I use that term in my declaration
`but I have a very specific meaning for it. And I
`just want to make sure that when you refer to drag
`and drop, that you're talking about it the same
`way as I am.
`BY MR. SOKOHL:
` Q. Well, if there's a specific part of
`your declaration that you recall or you want to
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`provide me with that definition, I'll clarify my
`question.
` A. I don't think there's a definition
`but -- hold on a second.
` Q. Sure. Paragraph 37. It might not be
`the only place that appears.
` A. No. That's what I was thinking about.
` Okay. So in my declaration I say
`this -- it's in Paragraph 37. I say "the claimed
`invention improves the display of market
`information to a user while facilitating order
`entry via selecting an order icon and moving the
`order icon to a location associated with a price
`along the first axis of prices to which the order
`icon was moved, hereinafter referred to as drag
`and drop."
` So when I'm referring to drag and
`drop, I'm referring to selecting the order icon,
`moving the order icon to a location along the
`price axis, to a price along the first axis of
`prices. That's what I'm referring to drag and
`drop.
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` Q. Okay. I'm going to generalize that.
`Have you used a mouse?
` A. Yes.
` Q. And have you used it to drag and drop
`an object?
` MR. GANNON: Object to the form,
`scope.
` THE WITNESS: Just for clarity, when
`you say "drag and drop," you mean taking an
`object, moving that object, releasing the mouse?
`Is that what you mean?
`BY MR. SOKOHL:
` Q. That is correct.
` A. Have I done that?
` Q. Uh-huh.
` A. Yes.
` Q. And you're familiar with that
`functionality of a computer and a mouse; correct?
` A. In certain operating systems, yes.
` Q. And I'm asking you whether or not the
`inventors of the '999 patent invented using drag
`and drop functionality of a mouse to move an
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`object on a graphical user interface?
` MR. GANNON: Object to the form,
`vague, scope.
` THE WITNESS: That is not what's
`being -- drag and drop is an element of the claims
`of the invention, but that's not what the
`invention is.
` So I would say that the
`inventors -- I would say that they did not invent
`taking a mouse and moving an object to a different
`location. That's not what's being claimed in the
`patent.
`BY MR. SOKOHL:
` Q. Understood. But they did not invent
`using drag and drop to move an object?
` MR. GANNON: Object to the form,
`vague, outside the scope, asked and answered.
` THE WITNESS: I don't want to use the
`term "drag and drop" because it conflicts with my
`terminology of "drag and drop" in my declaration.
`BY MR. SOKOHL:
` Q. But --
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` A. I just want to be clear.
` Q. You understand that drag and drop is a
`-- as an expert in graphical user interfaces, are
`you saying that the term "drag and drop" only
`means what you said in this declaration?
` MR. GANNON: Object to the form.
` THE WITNESS: No.
`BY MR. SOKOHL:
` Q. Okay.
` A. But I understand that I probably
`created a bit of confusion by saying that. But I
`just want to be clear that when I refer to "drag
`and drop" in my declaration, that is what I mean.
` Q. Fair enough. Again, I'll generalize
`it. Is it fair to say that the inventors of the
`'999 Patent didn't invent using a mouse to move an
`object, such as an icon, from one part of a
`graphical user interface to another?
` MR. GANNON: Object to the form,
`vague, scope.
` THE WITNESS: And I will say that is
`not what's being claimed in these patents. So I
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`Page 31
`would say that -- that is not what's being claimed
`in the '999 Patent. I would say they did not
`invent that.
`BY MR. SOKOHL:
` Q. Were the inventors of the '999 Patent
`the first to use an axis of prices --
` MR. GANNON: Object to the form.
`BY MR. SOKOHL:
` Q. -- as that --
` MR. SOKOHL: My apologies. You were
`right. I'm going to start over.
`BY MR. SOKOHL:
` Q. Were the inventors of the '999 Patent
`the first to use an axis of prices, as that term
`is used in Claim 1 and 35 of the '999 Patent?
` MR. GANNON: Object to the form,
`scope.
` THE WITNESS: Now, I was not asked to
`render an opinion on that in my declaration, and I
`have not provided any claim construction for "axis
`of prices." So I mean I haven't studied that.
` Are you asking me were they the
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`Page 32
`first people to do that? Is that what you asked?
`Sorry. I apologize.
`BY MR. SOKOHL:
` Q. I'm asking whether or not the
`inventors of the '999 Patent were the first to use
`an axis of prices.
` MR. GANNON: Object to the form,
`scope.
` THE WITNESS: Like I said, I was not
`asked to do that for the purpose of my
`declaration. I have not studied that.
` My understanding of a -- like I
`said, I did not provide a definition of that in my
`declaration. I didn't believe it was pertinent to
`what I was asked to do. But for completeness, the
`understanding that I used of "price axis" for my
`analysis I'd say is a reference line against which
`bids and asks can be plotted and which does not
`skip prices or price levels. I haven't done that
`analysis.
`BY MR. SOKOHL:
` Q. Fair enough. Do you know if the
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`IBG vs. Trading Technologies
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`Christopher Thoma
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