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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
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`GAIN CAPITAL HOLDINGS, INC.,
`Petitioner
`v.
`OANDA CORPORATION
`Patent Owner
`____________
`
`Case No. CBM2020-00021
`Patent 8,392,311
`____________
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`PATENT OWNER’S PRELIMINARY RESPONSE TO THE PETITION
`FOR COVERED BUSINESS METHOD REVIEW
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`Case No. CBM2020-00021
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`TABLE OF CONTENTS
`INTRODUCTION ........................................................................................... 1
`BACKGROUND ............................................................................................. 3
`A. OANDA AND ITS VISION OF MAKING CURRENCY TRADING MORE
`ACCESSIBLE FOR RETAIL INVESTORS. ............................................................... 4
`B. THE STATE OF THE PRIOR ART AT THE PRIORITY DATE OF THE ’311 PATENT.... 6
`1. Order Types ................................................................................................... 6
`2. Real-Time Pricing ......................................................................................... 9
`C. HOW THE ʼ311 PATENT ADDRESSED DEFICIENCIES IN THE PRIOR ART
`CURRENCY TRADING SYSTEMS. ......................................................................11
`LEVEL OF ORDINARY SKILL IN THE ART ........................................19
`GAIN FAILS TO ESTABLISH THAT THE ʼ311 PATENT IS
`ELIGIBLE FOR CBM REVIEW. ..............................................................19
`A. PETITIONER’S TECHNOLOGICAL INVENTION ANALYSIS IS INSUFFICIENT AS A
`MATTER OF LAW. ...........................................................................................21
`B. EVEN IF GAIN HAD ANALYZED THE CLAIMS AS A WHOLE, THERE IS NO
`BASIS TO CONCLUDE THAT THE ʼ311 PATENT IS NOT A “TECHNOLOGICAL
`INVENTION.” ...................................................................................................25
`1. The Claimed Subject Matter Recites a Technological Feature that is
`Novel and Non-Obvious Over the Prior Art ...............................................26
`2. The ʼ311 Patent Solves a Technological Problem Using a Technical
`Solution .......................................................................................................28
`THE CLAIMS OF THE ʼ311 PATENT ARE PATENTABLE
`UNDER 35 U.S.C. § 101. ..............................................................................32
`A. ALICE STEP 1: GAIN CANNOT ESTABLISH THAT THE ʼ311 PATENT CLAIMS
`ARE DIRECTED TO AN ABSTRACT IDEA ...........................................................33
`B. ALICE STEP 2: PETITIONER DID NOT SATISFY ITS BURDEN TO SHOW THAT THE
`PARTICULAR CLAIM IMPLEMENTATION DETAILS WERE WELL KNOWN,
`ROUTINE, OR CONVENTIONAL. ........................................................................35
`CONCLUSION .............................................................................................43
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`I.
`II.
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`III.
`IV.
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`V.
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`VI.
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`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Alice Corp. Pty. Ltd. v. CLS Bank Int’l,
`573 U.S. 208 (2014) .......................................................................... 32, 33, 35, 39
`Apple, Inc. v. ContentGuard Holdings, Inc.,
`No. CBM2015-00046, Paper 12, 2015 WL 3523684 (P.T.A.B.
`June 3, 2015) ....................................................................................................... 21
`Bascom Glob. Internet Servs., Inc. v. AT&T Mobility LLC,
`827 F.3d 1341 (Fed. Cir. 2016) .................................................................... 35, 39
`Belden Inc. v. Berk-Tek LLC,
`805 F.3d 1064 (Fed. Cir. 2015) .......................................................................... 25
`Berkheimer v. HP Inc.,
`881 F.3d 1360 (Fed. Cir. 2018) .............................................................. 35, 40, 43
`Bloomberg L.P. v. Quest Licensing Corp.,
`No. CBM2014-00205, Paper 16 (P.T.A.B. Apr. 7, 2015) .................................. 24
`DDR Holdings, LLC v. Hotels.com, L.P.,
`773 F.3d 1245 (Fed. Cir. 2014) .................................................................... 34, 35
`Emnos USA Corp. v. Dunnhumby Ltd.,
`No. CBM2015-00162, Paper 7 (P.T.A.B. Dec. 30, 2015) .................................. 21
`Enfish, LLC v Microsoft Corp.,
`822 F.3d 1327 (Fed. Cir. 2016) ........................................................ 33, 34, 39, 40
`IBG LLC v. Trading Techs. Int’l, Inc.,
`757 F. App’x 1004 (Fed. Cir. 2019) ............................................................. 25, 26
`Inv’rs Exch. LLC v. Nasdaq, Inc.,
`No. CBM2018-00038, Paper 9, 2019 WL 323691 (P.T.A.B. Jan.
`22, 2019) ............................................................................................................. 24
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`McRO, Inc. v. Bandai Namco Games Am. Inc.,
`837 F.3d 1299 (Fed. Cir. 2016) .............................................................. 32, 33, 35
`Metalcraft of Mayville, Inc. v. The Toro Co.,
`848 F.3d 1358 (Fed. Cir. 2017) .......................................................................... 24
`Old Republic Gen. Ins. Grp. v. Intellectual Ventures II, LLC,
`No. CBM2015-00184, Paper 7 (P.T.A.B. Apr. 15, 2016) .................................. 21
`In re Sang-Su Lee,
`277 F.3d 1338 (Fed. Cir. 2002) .......................................................................... 28
`In re Stepan Co.,
`868 F.3d 1342 (Fed. Cir. 2017) .......................................................................... 24
`Tate & Lyle Ams. LLC v. Cargill, Inc.,
`No. IPR2014-00084, Paper 12, 2014 WL 1440440 (P.T.A.B. Apr.
`1, 2014) ............................................................................................................... 28
`Teradata Operations, Inc. v. Berkeley*IEOR,
`No. CBM2019-00009, Paper 7, 2019 WL 2306753 (P.T.A.B. May
`30, 2019) ....................................................................................................... 24, 30
`Other Authorities
`37 C.F.R. § 42.65 ..................................................................................................... 28
`37 C.F.R. § 42.301 ............................................................................................passim
`37 C.F.R. § 42.304 ................................................................................................... 20
`PTAB Consol. Trial Prac. Guide (Nov. 2019) ....................................................... 20
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`2004
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`2007
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`2008
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`2009
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`2001 Declaration of Erik Dykema In Support of Patent Owner’s Motion for Pro
`Hac Vice Admission of Erik Dykema Under 37 C.F.R. § 42.10(c)
`2002 Declaration of Ivan Zatkovich
`2003
`“Matchbook FX Holdings Inc. Trading Policies” – archived at
`https://web.archive.org/web/20000817031251/http://www.matchbookfx.co
`m/pdf/tradingpol.pdf on August 17, 2000
`“Deal Station 2000 Demo FAQ” – archived at
`https://web.archive.org/web/20001218073000/http://www.mgforex.com/d
`emo/default.asp?loc=DemoFaq on December 18, 2000
`2005 Declaration of Dr. Michael Stumm
`2006
`“Reuters Launches the Reuters 3000 xtra Service” – Reuters, March 23,
`1999, available at https://ir.thomsonreuters.com/news-releases/news-
`release-details/reuters-launches-reuters-3000-xtra-service
`“Reuters 3000 Xtra” – Reuters 2003, available at https://zbook.org/reuters-
`3000-xtra-brochure_MTYyMTAz.html
`“About Forex” – archived at
`https://web.archive.org/web/20000815201214/http://www.matchbookfx.co
`m/index/aboutforex.html on August 15, 2000.
`“Investing in Forex vs. Stocks” – Investopedia, 2020, available at
`https://www.investopedia.com/articles/forex/11/forex-or-stocks.asp
`2010 U.S. Patent No. 7,496,534
`2011 Dacorogna, Michel et al., AN INTRODUCTION TO HIGH-FREQUENCY
`FINANCE, pp. 1-9, Academic Press (2001)
`2012 C.V. of Ivan Zatkovich
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`PATENT OWNER’S EXHIBIT LIST
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`I.
`
`INTRODUCTION
`GAIN’s Petition seeks covered business method review of a patent (U.S.
`Patent No. 8,392,311) owned by its competitor, OANDA, asserting that the patent
`claims “merely describe a standard currency trade being performed by computers,”
`and amount to nothing more than “mere use of a generic computer to replicate a
`longstanding business practice.” These assertions, on which GAIN’s entire Petition
`is premised, fundamentally misconceive the ʼ311 Patent.
`It is undisputed that, as of the priority date of the ʼ311 Patent, there were
`several online platforms for the trading of currency over a computer network. But
`the ʼ311 Patent does not purport to claim protection over online currency trading
`generally, as GAIN contends. The ʼ311 Patent was instead directed to solving
`specific deficiencies in those prior art currency trading systems. Trades on those
`platforms required a trader to specify either a price to trade at or the time to trade
`at—but not both. The closest a trader could get to this was to execute a type of order
`that utilized a three-step process (also known as a three-way handshake) from
`initiation to execution:
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`(1) the trader specified to a dealer a price quote for a currency pair and the
`amount that the trader would want to trade (without specifying whether
`he would like to buy or sell);
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`(2) the dealer specified to the trader both a bid and an ask price, and gave
`the trader several seconds to respond, in order to protect against price
`fluctuations (the dealer not knowing whether the trader would buy, sell,
`or reject the offer); and
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`(3) the trader either rejected the offer or specified whether the trader was
`buying or selling (with his or her response having to occur within a
`timeframe of a few seconds).
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`This cumbersome process created various problems, including that potential
`internet delays might not allow the trader to respond within the few-seconds
`window, and that the trader would be unable to execute a trade at the originally
`quoted price. None of the prior art systems allowed the trader to specify precisely
`both when and at what price a trade would execute—a critical deficiency in an
`industry where rates can move on a second-by-second basis.
`The ʼ311 Patent is directed to fixing these issues by teaching specific
`technological improvements to computerized currency trading systems. The
`invention disclosed in the ’311 Patent allows for execution of currency transactions
`over a computer network with only two communications—instead of three—through
`a new trading order type, which is referred to in this submission as a Market Order
`with Requested Price (or “MORP”). This new order type allows a trader to
`determine both the timing and price of an order—eliminating the previous problems
`with timing lags and building in automated protections against price fluctuations.
`[See EX1001 (ʼ311 Patent), Claims 1 and 7.]
`When the invention of the ʼ311 Patent is viewed properly in the context of the
`prior art, there is no valid basis on which to grant GAIN’s Petition. First, the ʼ311
`Patent is not eligible for covered business method review pursuant to § 18(d)(1) of
`the Leahy-Smith America Invents Act (“AIA”) or 37 C.F.R. § 42.301 because it
`discloses a “technological invention.” GAIN’s argument against the technological
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`invention exemption is fatally flawed because GAIN fails to analyze the claims as a
`whole. Instead, GAIN improperly takes piecemeal elements of the challenged
`claims and asserts that these individual elements do not amount to technological
`inventions. When properly analyzed, the ʼ311 Patent’s claims recite technological
`features that are novel and unobvious over the prior art, and solve a technical
`problem using a technical solution.
`Second, the Petition should be denied because GAIN’s § 101 challenge fails
`both steps of the framework laid out by Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573
`U.S. 208, 217-18 (2014). As to step 1 of Alice, GAIN improperly tries to define the
`ʼ311 Patent at a high level of abstraction, contending that the claims are directed to
`the abstract idea of “currency trading.” The actual claim limitations refute that
`contention and make clear that the ʼ311 Patent is directed instead to a specific
`improvement in the functioning and operation of prior art computerized trading
`systems. As to step 2 of Alice, even if the ʼ311 Patent could be viewed as directed
`to the abstract idea of online currency trading (which it cannot), the patent claims
`include narrowing limitations—particularly the MORP limitations—that ensure the
`claims are much more than an effort to monopolize electronic currency trading.
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`GAIN’s Petition should thus be denied.
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`II. BACKGROUND
`This section proceeds in three parts. First, it provides some background on
`OANDA and its founders’ goal to make currency trading more accessible for a
`broader audience. Second, it describes the state of the prior art at the priority date
`of the ʼ311 Patent, including the various shortcomings in then-existing computer
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`network-based currency trading systems. Third, it describes the specific teachings
`of the ʼ311 Patent, and the ways in which the ʼ311 Patent provides advances over
`the prior art.1
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`A. OANDA and its Vision of Making Currency Trading More
`Accessible for Retail Investors.
`OANDA, a market leader in currency data and currency trading, was founded
`in 1996 by Dr. Michael Stumm and Dr. Richard Olsen. [EX2005, ¶5.] Dr. Stumm
`is a teacher, researcher, entrepreneur, and executive. As a professor in the University
`of Toronto’s Department of Electrical and Computer Engineering, he has published
`over 100 papers in top-tier conference proceedings and scientific journals. Dr.
`Richard Olsen is an academic, entrepreneur, and founder of Olsen Ltd., a leading
`econometric research and development firm. Dr. Olsen is the lead author of the
`textbook, An Introduction to High-Frequency Finance (Academic Press, 2001),
`which provides the first and only source of unified information about high-frequency
`finance, with a particular emphasis on foreign exchange (“forex”) markets.
`[EX2011.]
`Dr. Stumm’s and Dr. Olsen’s vision in founding OANDA was to make
`currency exchange rate information more accessible to a broader audience.
`
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`1 This background section, and the response generally, is supported by the
`Declarations of Ivan Zatkovich (“Zatkovich Decl.”), an expert in the field and Dr.
`Michael Stumm (“Stumm Decl.”), a founder of OANDA and a named inventor of
`the ’311 Patent. [EX2002 & EX2005.] Mr. Zatkovich is a leader in electronic
`trading systems, and has personally designed, implemented, and managed seminal
`electronic trading system projects, including for ETrade, Smith Barney, and Utility
`Partners. [EX2002, ¶¶4-11.]
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`[EX2005, ¶¶6-8.] By the mid-1990s, even with the advent of the Internet, there were
`no centralized, transparent exchanges for currencies accessible to retail investors,
`like those for stocks. [EX2005, ¶6.] That lack of transparency allowed large banks
`and currency dealers to maintain large “spreads” (the difference between the prices
`at which a dealer is willing to buy versus sell an underlying asset) for retail customers
`while trading amongst themselves at more favorable rates. [Id.]
`In 1996, OANDA launched the world’s largest and most accurate database of
`forex prices, employing Dr. Stumm’s technological expertise and Dr. Olsen’s
`expertise in currency markets. [EX2005, ¶5.] OANDA soon became the gold
`standard for forex prices and interbank exchange rates online, and was broadly relied
`upon by major corporations, auditing firms, and individual traders alike. [Id.]
`Although OANDA had made accurate exchange rates more available to the
`public, banks and currency dealers continued to charge consumers large spreads
`when trading currency. [EX2005, ¶6.] In 2000, Dr. Stumm and Dr. Olsen therefore
`conceived an online automated trading platform, through which they could offer
`individual investors the more favorable rates banks used to trade currency among
`themselves. [EX2005, ¶8.] While there were several existing online currency
`trading systems at that time, they suffered from various deficiencies (discussed
`further below) that made them cumbersome and inaccessible for the average retail
`investor. [EX2005, ¶6.] Thus, Dr. Stumm and Dr. Olsen used their combined
`expertise to invent systems and methods for online currency trading that overcame
`the deficiencies in the prior art, which inventions were disclosed in the ʼ311 Patent,
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`and embodied in OANDA’s pioneering currency trading platform, fxTrade, which
`launched in 2001. [EX2005, ¶¶7, 27.]
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`The State of the Prior Art at the Priority Date of the ’311 Patent
`B.
`As noted above, there were several computer-based foreign currency trading
`systems in and around the 2000 to 2001 timeframe of which a person of ordinary
`skill in the art would have been aware. It is important to understand what those
`systems were and were not capable of doing in order to appreciate the technical
`problems that the ʼ311 Patent was designed to solve. This section will therefore
`describe the state of the then-existing prior art with respect to: (1) the order types in
`use in online currency trading; and (2) the availability of real-time pricing.
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`1. Order Types
`At the priority date of the ’311 Patent there were three principal order types
`in use when trading currency over a computer network: “Request for Quote (RFQ)
`Orders,” “Market Orders,” and “Limit Orders.” [EX2002, ¶23.]
`An RFQ Order occurs when a trader makes a request for a quote to a dealer
`for a pair of currencies. [EX2002, ¶24.] These are the types of orders that make up
`what is referred to as the “three-way handshake” process in the ʼ311 Patent Overview
`section. [Id.] In this process, “(1) the trader requests a quote, (2) banks respond
`with quotes, subject to a short time limit, and (3) the trader can choose to accept a
`quote (or not).” [EX2002, ¶25 (citing EX1008, ¶61); EX1001, 1:21-31.] During
`this process, the trader does not disclose whether he or she plans to buy or sell. [EX
`2001, ¶25.] The bank (or dealer) then presents buy and sell price quotes with an
`expiration time, which is typically very short—seconds—after the quote is provided.
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`[Id.] For example, one system described in an exhibit to the declaration of GAIN’s
`expert, Bernard Donefer (“Donefer”), Currenex FXtrades, allowed banks 25 seconds
`to provide a quote to a trader, and then gave the trader 5 seconds to decide whether
`or not to accept the price. [Id. (citing EX1013, 8).] If prices were not at levels where
`the trader wanted to trade, he or she did not trade. [EX2002, ¶25.] Instead, the trader
`requested a price requote, or performed another RFQ Order later. [Id.]
`This was a very tedious process, particularly in the absence of real-time price
`quotes. [EX2002, ¶26.] Even with real-time quotes, the process would be
`cumbersome unless the trader could execute the trade at the quoted price
`immediately and receive that price. [Id.]
`A Market Order is an order type in which a trader indicates a desire to buy
`or sell at the market price. [EX2002, ¶29.] Market Orders only execute at the foreign
`currency market price provided by the dealer at the time of the trade request, which
`may or may not be the price that was first quoted to the trader. [Id.] Generally, the
`delay between (i) the price quote from the dealer to the trader and (ii) subsequent
`trade execution results in the trade settling at a price that is different from the quote.
`[EX2002, ¶30.] Once the trader requests a Market Order, however, the trader has
`no ability to control the price at which the Market Order will execute. [Id.] And
`none of the systems that GAIN identifies as prior art, such as Matchbook FX or Deal
`Station 2000, had the capability to provide certainty in specifying a precise price and
`immediate execution using a Market Order. [EX2002, ¶¶29-32.]
`A Limit Order is an order that may execute if the Spot Rate (another term for
`current market rate) reaches a specified price, or limit. [EX2002, ¶33.] It is not an
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`order for immediate execution at a specified price. Rather, Limit Orders are
`available with certain timing restrictions (e.g., day only or good-till-cancelled), but
`do not execute at a specific time. [EX2002, ¶33.] Limit Orders may also not execute
`at exactly the price designated by the trader in volatile markets. [Id.] As noted in
`the Matchbook FX Trading Policies document, a Limit Order is:
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`An Order to establish an Open Position by selling or buying at a
`specified Spot Rate level. Although a Spot Rate level is specified upon
`entry of Limit Entry Orders, market conditions may often prevent the
`execution of an individual customer’s Limit Entry Order despite other
`dealing activity at that price level, and/or may require such Orders to
`be Filled at a substantially different Spot Rate, and customer agrees to
`accept the best rate which Matchbook FX, in its discretion, may assign
`to the Fill.
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`[Id. (citing EX2003, 2).] A trader does not have the ability to specify or control
`when the Limit Order executes, except for establishing parameters on when the
`Limit Order expires. [EX2002, ¶33.] A trader can also add a stop-loss or take-
`profit order to their original currency trade, which is an order similar to a Limit
`Order. Specifically, a trader can set the limit so as to sell an asset if the price of the
`asset declines to a specified point, to avoid exposure to additional loss through
`downward price movement of a held position (i.e., “stop the loss”), or where the
`limit is set so as to sell an asset if the price of the asset increases to a specified point,
`to extract a profit from a currently held position and avoid a future loss (i.e., “take a
`profit”). [EX2002, ¶34.]
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`Limit, stop-loss, and take-profit orders do not require real-time pricing from
`the dealer for execution because they are not dependent upon the market price at the
`time the trader requests that order. [EX2002, ¶35.] The trader simply specifies the
`“limit price” at which to buy or sell, and then makes the order. Trade execution then
`triggers when the price reaches the limit thresholds. [Id.] Although prior art systems
`referenced by GAIN were able to perform Limit Orders over a computer network,
`they were not able to provide the capability for the trader to specify precisely when
`and at what price a trade will execute using Limit Orders. [EX2002, ¶36.]
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`Real-Time Pricing
`2.
`Prior to the invention disclosed in the ʼ311 Patent, real-time or near real-time
`pricing was only available via expensive, subscription-based trading platforms that
`were often provided using dedicated networks or direct satellite communications.
`[EX2002, ¶39.] These included systems such as those referenced by Donefer
`(Reuters Dealing 2000-2 and EBS) [EX1008, ¶¶58-59], as well as Reuters 3000
`Xtra, which replaced the Dealing 2000-2 service. [EX2002, ¶39.] These services
`required proprietary software and dedicated hardware, including for example,
`satellite links, which were impractical for, and typically unavailable to, retail
`currency traders. Instead, given the costs associated with these trading platforms,
`they targeted and were used by institutional currency traders. [Id.] Where retail
`traders typically buy and sell currency pairs in smaller volumes for their own
`accounts, institutional traders act on a bigger scale trading large sums on behalf of
`companies, insurance groups, investment funds and vehicles, and other institutions.
`[EX2002, ¶40.] With potentially millions of dollars on the line, institutional traders
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`are able to afford the costs associated with these subscription-based models. [Id.
`(citing EX2006 (Reuters Press Release); EX2007 (Reuters 3000 Xtra Brochure)).]
`Retail traders, however—lacking the sophisticated equipment, funds, and IT support
`needed to use these systems—had no way to access, and trade on, real-time prices.
`[EX2002, ¶40.] In fact, prior art online computer systems that were available to
`individual retail traders could only provide prices that were not real-time or were on
`request only. [EX2002, ¶42.] The conventional way for traders to request updated
`prices was to refresh a page in an internet browser. Due to the technological
`limitations of the prior art systems, platforms came in two varieties. A trader either
`had to manually refresh the browser window to get new, more current prices, or the
`platform auto refreshed at various intervals. Either way, the refresh requirement was
`a disruptive process, which resulted in prices that could still have been several or
`more seconds old. [Id. (citing EX2005, ¶6).]
`The primary prior art system relied upon by Donefer is the Matchbook FX
`system. [EX2002, ¶41 (citing EX1008, ¶¶63-67).] Matchbook FX, however, did
`not provide traders with the ability to trade at a quoted real-time price. Rather,
`traders would enter an order and Matchbook FX would “in its discretion” “assign”
`a price for that order. [Id. (citing EX1023, 4; EX2003, 2).] Furthermore, the system
`required minimum trades of $25,000 in January of 2000, which was well beyond the
`means of a typical individual or small Trader. [Id. (citing EX1023, 2).] And just a
`few months later, Matchbook raised the minimum trade amount to $100,000,
`revealing the apparent difficulty providers were having in providing small trade
`capability. [Id. (citing EX2008, 4).]
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`The lack of real-time pricing was not problematic for RFQ orders, Limit
`Orders, or Market Orders. [EX2002, ¶43.] As described, these order types did not
`require real-time or near real-time pricing to execute successfully. [Id.] But the lack
`of real-time pricing did, however, prevent executing orders at a specified real-time
`market price immediately. [EX2002, ¶44.] Without real-time pricing, traders cannot
`trade at a precise price at a precise time. In 2001, that capability was not available
`to individual customers in prior art trading systems using a computer network. [Id.]
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`C. How the ʼ311 Patent Addressed Deficiencies in the Prior Art
`Currency Trading Systems
`The ʼ311 Patent claims methods for providing: (1) real-time trading data; and
`(2) an improved trading order, referred to in this submission as a “Market Order with
`Requested Price” (MORP), which allows the trader to control both the timing and
`the price of a trade. [EX2002, ¶54.] As discussed above, trading systems at the time
`of the invention were limited to three types of orders—a 3-step RFQ Order, a Market
`Order, or a Limit Order—none of which required or relied upon the trader having
`access to real-time currency exchange rates, and none of which provided for
`immediate execution of trades at a specified price. [EX2002, ¶¶51-52.] The ’311
`Patent describes the system architecture and techniques necessary to provide both
`real-time pricing and the capability of executing a MORP. [EX2002, ¶54.]
`Real-Time Pricing: There are three primary tasks needed to provide currency
`exchange pricing in real-time. These are to Collect, Calculate, and then Distribute
`pricing in real time. [EX2002, ¶74.] All three of these tasks are performed
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`continuously and simultaneously on the ʼ311 Patent’s claimed Trading System
`Server, by the following components:
` Rate Server – Collects exchange rates from multiple data feeds;
` Pricing Engine – Calculates the incoming exchange rates to determine what
`pricing will be quoted to traders; and
` Server Front-end – Continuously distributes pricing directly to traders in real
`time.
`[EX2002, ¶74.]
`As shown in figure 3 of the ʼ311 Patent, the invention discloses a specialized
`configuration of computer systems in a network, where the functions and
`collaboration of the above three components are necessary to deliver continuous
`pricing directly to traders in real time. [EX2002, ¶75.]
`The Rate Server and Pricing Engine are two separate modules that run
`concurrently and work collaboratively to provide continuous real-time pricing
`directly to traders. [EX2002, ¶76 (citing EX1001, 7:7-29).] “The Rate Server
`obtains currency exchange rate information from a variety of external rate sources
`and stores it locally.” [Id. (quoting EX1001, 7:7-9).] For these external rate sources,
`the invention utilizes “Partners,” which consist of “financial institution(s) through
`which real currency exchange trades are executed, and from which real-time data
`feeds are obtained.” [Id. (quoting EX1001, 3:39-42).] The Pricing Engine then
`“computes the currency exchange rates that the traders see and that are used for
`trading.” [Id. (quoting EX1001, 7:9-11).]
`
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`For efficiency and “fast response time, the Rate Server caches in memory all
`of the frequently and recently requested rates so as to minimize the number of disk
`accesses required.” [EX2002, ¶77 (quoting EX1001, 7:27-29).]
`While the Rate Server and Pricing Engine continually collect and calculate
`the currency pricing, the Server Front-end continually updates and distributes real-
`time pricing to the traders. [EX2002, ¶78.] The Server Front-end is also multi-
`threaded so that it can handle multiple concurrent requests from multiple Trade
`Stations. This allows all traders to receive their pricing data in parallel. [Id. (citing
`EX1001, 7:3-6).]
`For the continuous update of real-time pricing data, the Server Front-end
`maintains a “persistent connect” to each of the Trade Stations to allow a necessary
`faster response time. [EX2002, ¶79 (citing EX1001, 6:33-38).]
`Market Order with Requested Price: The invention claims methods that
`enable an improved trading order—the MORP—which allows the trader to control
`both the timing and the price of a trade. [EX2002, ¶80.] In this system, a trader
`receives continuous real-time pricing, so that at any given time the trader knows the
`price at which a currency pair is trading, and is able to trade on that price
`immediately. [Id.] This type of trade is defined directly within the claims, as well
`as being enabled by the Specification. [EX2002, ¶81.] First, claim elements 1(i) &
`(ii) of the ʼ311 Patent identify the requirement for real-time pricing (current
`exchange rates). [Id.] The trading system server must continuously maintain
`(“dynamically maintaining”) the real-time pricing and transmit that pricing directly
`to the trader’s Trade Station (“trading client system”):
`
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`Patent Owners’ Preliminary Response
`(i) at the trading system server, determining and dynamically
`maintaining a plurality of current exchange rates, each current
`exchange rate relating to a pair of currencies and including a first
`price to buy a first currency of the pair with respect to a second
`currency of the pair and a second price to sell the first currency of
`the pair with respect to the second currency of the pair;
`(ii) transmitting data from the trading system server to a trading client
`system, the transmitted data representing at least one current
`exchange rate at the time of the transmission;
`
`[EX2002, ¶81 (quoting EX1001, 17:57-67 (Claim 1) (emphasis added)).]
`Once real-time pricing has been established and is transmitted to the trader’s
`Trade Station, the trader can use that current pricing information to issue a trade
`request. [EX2002, ¶82.] Claim elements 1(iv) & (v) identify that the trader selects
`a currency pair and transmits a trade request to the server for immediate execution.