Trading Tech Patents Put To The Test

Posted on | July 29, 2009 | No Comments

2008-1392 Trading Tech Int'l v. eSpeed
ND/IL 04-cv-5312

Judge James
B. Moran

Summary of Argument from plaintiff Trading Technologies
International, Inc.  Paul H. Berghoff, Leif R. Sigmond,
Jr., Matthew J. Sampson, Michael D. Gannon, S. Richard
Carden, Jennifer M. Kurcz and Paul A. Kafadar of McDonnell
Boehnen, Hulbert & Berghoff LLP, Chicago; and Steven F.
Borsand of Trading Technologies International, Inc., on brief.

The heart of the dispute is the meaning of the claim term
“static.” This term is explicitly and unambiguously defined in the patent
specification as:

The values in the price column are static; that is, they do
not normally change positions unless a re-centering command is received …

Instead of simply adopting this clear definition, the court
erred by construing “static” much more narrowly by requiring that the values in
the price column:

never change positions [which the court interpreted as
precluding “any movement”] unless by manual re-centering or
repositioning.

There is no support in any of the intrinsic evidence (or
extrinsic evidence for that matter) for such a narrow reading of static. As
such, this Court should vacate the district court's construction and adopt the
definition set forth in the patent.

The court also erred in ruling that Dual Dynamic and
eSpeedometer do not literally infringe. This ruling was based solely on the
court's improper construction of “static.” Under its construction, any product
that has a risk of automatic re-centering (which cannot be turned off) does not
literally infringe the patents-in-suit. However, the proper construction of
static is not limited to any particular type of re-centering and thus
encompasses both manual and automatic re-centering. Therefore, these products
literally infringe the patents-in-suit.

Furthermore, the court improperly barred TT from asserting
DOE against eSpeedometer¹⁷ by ruling that “static” was narrowed by
amendment during prosecution.¹⁸ However, to reach this conclusion the
court did not apply its narrow construction of “static” that it used to find no
literal infringement. Rather, the court construed “static” broadly for purposes
of its estoppel analysis – in conflict with its Markman ruling. This
was error because once a claim term is construed, that same construction must
be applied uniformly. Under the court's unduly narrow construction, there can
be no narrowing amendment and thus no estoppel.

¹⁷ The court found that eSpeedometer infringed the
“static” claim term under DOE, even under its unduly narrow construction of
that term.

¹⁸ All of TT's DOE arguments are moot if this Court adopts TT's
construction and finds literal infringement.

Moreover, the court improperly barred TT from asserting DOE
against Dual Dynamic, ruling that doing so would vitiate the “static” claim
term. Vitiation is not applicable because there is only a subtle difference of
degree between the “static” claim element, as narrowly construed by the
district court, and the operation of the price axis in Dual Dynamic. Thus, TT
should not be barred from asserting DOE against Dual Dynamic.



Finally, the
court erred by entering JMOL overturning the jury's verdict of willful
infringement. The court did not and could not challenge the jury's finding that
eSpeed knew or should have known that its product was infringing a valid
patent. The court's ruling was based solely on its mistaken belief that there
was no evidence that eSpeed sold its infringing products after the
patents-in-suit issued. In fact, there is substantial undisputed evidence in
the record that eSpeed continued selling its infringing product after the
patents issued and that it had the ability to pull off the market existing
infringing product. Accordingly, the JMOL ruling should be reversed.

TT states that it “commercialized the invention in a product
called MD Trader, and began selling it around Labor Day of 2000 as part of TT's
X_Trader software suite.” (TT-Br.8) In fact, however, TT first commercialized
the invention of the Patents-in-Suit much earlier, selling custom software
embodying it to Brumfield, then one of the world's busiest futures traders, who
used it in his proprietary trading and kept it as the “toppest of toppest of
secrets that you can imagine,” until, after investing millions of dollars in
TT, he concluded that there might be bigger rewards in going the “patent
route.”



Brumfield and TT's decision to exploit the invention as a trade secret
until it became more financially advantageous to enter the patent system has
critical implications for the validity and enforceability of the
Patents-in-Suit.



First, more than one year passed between TT's commercial sale
of the custom software embodying the invention to Brumfield and its filing of
the Provisional on March 2, 2000, and the sale is therefore a §102(b) bar.



Second,
TT has stipulated that the Patents-in-Suit are invalid due to Brumfield's
intervening public use if they are not afforded the benefit of the Provisional
filing date. Every Asserted Claim includes the limitation “single action of a
user input device,” a term that does not appear and is not defined in the
Provisional. The court construed it broadly, paraphrasing an ad hoc definition
that was first set forth in the Non-Provisional expressly “for the purposes of
the present invention.” This broad construction -“an action by a user within a
short period of time that may comprise one or more clicks of a mouse button or
other input device” is not supported by the narrow disclosure of single mouse
click order entry in the Provisional and therefore, as TT stipulated,
Brumfield's pre-June 9, 1999 commercial use is also a §102(b) bar.



And
just as TT makes no mention of the existence, sale and use of Brumfield's
custom software in its brief, so too did TT fail to disclose this information
to the PTO during prosecution of the Patents-in-Suit. This information would
have been highly material, as it would have prompted the PTO to
consider in the first instance the on-sale and priority date issues now on
appeal. The district court, however, found that this information was not
material at all, and it did not go on to consider abundant evidence that its
nondisclosure was deliberately deceptive.



The “single action of a user input
device” limitation is also, as construed, indefinite, as it has no clear
meaning to a person of ordinary skill in the art, but rather depends upon the
subjective “perception” of each individual user.



Accordingly, this Court
should reverse, mandate the entry of judgment declaring the Asserted Claims
invalid, and remand for further proceedings on inequitable conduct.

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