`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________
`
`TRADESTATION GROUP INC.; TRADESTATION SECURITIES, INC.; IBG
`LLC; and INTERACTIVE BROKERS LLC
`Petitioners
`
`v.
`
`TRADING TECHNOLOGIES INTERNATIONAL, INC.
`Patent Owner
`_________
`
`CBM2015–00172
`Patent 7,783,556
`___________________
`
`
`PETITIONERS’ ADDITIONAL BRIEFING IN LIGHT OF CQG AS AU-
`THORIZED BY THE BOARD’S JANUARY 23, 2017 ORDER
`
`
`
`
`
`
`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313–1450
`
`
`
`
`
`CBM2015–00172
`Patent 7,783,556
`The Federal Circuit’s nonprecedential opinion in Trading Techs. Int’l, Inc.
`
`
`
`v. CQG, Inc., 2017 WL 192716 (Fed. Cir. Jan. 18, 2017) (“CQG”) does not affect
`
`these CBMs. The parties are not contemplating settlement. And Petitioners are not
`
`aware of proceedings—other than CQG, these CBMs, and the CBMs’ underlying
`
`litigation—that could affect the challenged patents.
`
`I. The nonprecedential decision in CQG does not affect these proceedings
`because the records are entirely different.
`CQG does not control these CBMs. It involved a different party, in a district
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`court proceeding, without any record evidence, arguing that claims of two of the
`
`challenged patents reflect a different abstract idea than those addressed in these
`
`CBMs. Id. at *3. First, as non-parties, Petitioners are entitled to a full and fair op-
`
`portunity to litigate the issues. Depriving Petitioners of this opportunity would not
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`only be an improper use of offensive collateral estoppel, but it would also violate
`
`Petitioner’s due process rights. In re Trans Tex. Holdings Corp., 498 F.3d 1290,
`
`1297 (Fed. Cir. 2007). The Board has recognized the factual nature of the § 101
`
`analysis, and refused to apply collateral estoppel to prevent a petitioner—who lost
`
`a district court § 101 challenge—from challenging eligibility. Interthinx, Inc. v.
`
`Corelogic Solutions, LLC, CBM2012-7, Paper 58 at 5-7 (PTAB Jan. 30, 2014).
`
`Second, CQG is nonprecedential. Other Federal Circuit panels or lower tri-
`
`bunals may look to a nonprecedential decision for guidance, but are not bound by
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`its holdings. Fed. Cir. Rule 32.1(d); see Symbol Tech’s, Inc. v. Lemelson Medical,
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`- 1 -
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`
`
`
`
`CBM2015–00172
`Patent 7,783,556
`277 F.3d 1361, 1368 (Fed. Cir. 2002). Here, Petitioners presented compelling,
`
`concrete evidence that the claims cover an abstract idea and lack an inventive con-
`
`cept—evidence that the Federal Circuit advised must be considered, if it had been
`
`before them. CQG, at *4. With different parties and entirely different records, the
`
`Board can and should reach a different result.
`
`A. The ’556, ’056, and ’411 patent claims were not at issue in CQG and
`cannot be affected by its holding.
`CQG does not affect the ’556, ’056, and ’411 because those patents were not
`
`at issue in the case. See id. at *1. Eligibility under § 101 is analyzed on a claim-by-
`
`claim basis. Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014).
`
`None of the ’556, ’056, and ’411 claim a static price axis, which the Federal Cir-
`
`cuit held is the inventive concept in CQG. CQG., at *3. Indeed, the Court relied on
`
`this critical distinction of the ’411 in its decision in Trading Tech’s Int’l., Inc. v.
`
`Open E Cry, LLC, 728 F.3d 1309, 1315, 1320 (Fed. Cir. 2013). And, the ’556 and
`
`’056 patents are from a different patent family than the ’132 and ’304. The ’556 is
`
`directed to calculating and displaying profit and loss information; the ’056 is di-
`
`rected to an entirely different GUI than the ’132 and ’304. Neither the ’056 nor
`
`’556 purport to solve the alleged problem of a trader missing a price. Thus, CQG
`
`has no bearing on the ’056, ’556, or ’411 patents.
`
`B.
`
`The PTO is not bound by the court’s denial of judgment as a matter
`of law based on a record devoid of evidence.
`
`
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`- 2 -
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`
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`CBM2015–00172
`Patent 7,783,556
`The Federal Circuit’s reasoning in CQG extends only as far as the record be-
`
`fore the district court and, in turn, the Federal Circuit. Ballard Med. Prods. v.
`
`Wright, 821 F.2d 642, 643 (Fed. Cir. 1987) (“An appellate court may consider only
`
`the record as it was made before the district court.”). That record lacked any evi-
`
`dence showing that the subject matter had “long existed” and was “routine or con-
`
`ventional.” CQG, at *3. That is not the case here.
`
`While subject matter eligibility may ultimately be a question of law, it is
`
`“rife with underlying factual issues.” Ultramercial, Inc. v. Hulu, LLC, 722 F.3d
`
`1335, 1339 (Fed. Cir. 2013), vacated sub nom. WildTangent, Inc. v. Ultramercial,
`
`LLC, ––– U.S. ––––, 134 S.Ct. 2870 (2014). The relevant facts here involve
`
`whether the subject matter was well-known and routine or conventional. See CQG,
`
`at *4. Because these inquiries apply to both steps of the eligibility analysis, the
`
`Board must independently consider the evidence of record in these CBMs before
`
`reaching its determination on either step. Elec. Power Grp., LLC v. Alstom S.A.,
`
`830 F.3d 1350, 1353 (Fed. Cir. 2016).
`
`C. The CBMs’ records differ from the district court’s.
`Context is important: “the public interest in innovative advance is best
`
`served when close questions of eligibility are considered along with the under-
`
`standing flowing from review of the patentability criteria of novelty, unobvious-
`
`ness, and enablement ….” CQG, at *4. But in CQG, the defendant had made a stra-
`
`
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`- 3 -
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`
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`CBM2015–00172
`Patent 7,783,556
`tegic decision not to challenge the validity of the patents or to submit art for its
`
`§ 101 challenge. Thus, the Federal Circuit lacked any record of the prior art.
`
`Here, however, the records establish that TT merely appropriated a well-
`
`known way to display trading data and added conventional GUI functions. Weiss,
`
`for example, demonstrates that the claimed GUIs have a pre-electronic trading ana-
`
`log. Weiss describes a NYSE specialist’s book, which is a pencil and paper ap-
`
`proach to plotting bids and asks along a price axis in the same format as the GUIs
`
`in TT’s patents. (’182 Ex. 1020, 44-46.) Weiss also teaches that the NYSE dis-
`
`played this book on a CRT—demonstrating how conventional it was to put traders’
`
`pencil and paper plots on a display. (Id. at 46.) Gutterman demonstrates another
`
`pre-electronic trading analog, describing a system for arranging and displaying a
`
`broker’s deck on a touchscreen display that arranges bids and asks along a price
`
`axis in the same format as TT. (’182 Ex. 1011, 6:33-7:14; 12:1-56; FIGS. 2b, 2d.)
`
`TSE (’182 Ex. 1017), Intex (’182 Exs. 1046, 1047), Silverman (’182 Ex.
`
`1010) and Buist (’182 Ex. 1030) apply this well-known arrangement in the field of
`
`electronic trading. Intex’s electronic trading system that displayed bids and asks
`
`along a vertical price axis preceded TT’s GUIs by at least 15 years. (’182 Ex.
`
`1047.) Indeed, Thomas, TT’s expert, admitted that all of the claimed elements
`
`were known at the time of the invention. (’182 Ex. 2169, ¶99.) And Cooper (’182
`
`Ex. 1022) and Schneiderman (’182 Ex. 1023) show just how conventional the
`
`
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`- 4 -
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`
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`CBM2015–00172
`Patent 7,783,556
`claimed GUI functions are. The Federal Circuit had none of this evidence before it,
`
`and therefore its § 101 decision is largely inapplicable to these CBMs.
`
`D. CQG’s abstract idea is different than those advanced in the CBMs.
`Petitioners’ proposed abstract ideas do not include an electronic exchange, a
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`critical distinction from CQG. There, the district court held that “placing an order
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`… on an electronic exchange, based on observed market information, as well as
`
`updating the market information,” is not “a fundamental economic or longstanding
`
`commercial practice,” and thus not abstract. Trading Techs. Int’l, Inc. v. CQG,
`
`Inc., 2015 WL 774655, *3-*4 (N.D. Ill. Feb. 24, 2015) (emphasis added). But this
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`is because an electronic exchange is merely a field of use limitation, not part of the
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`abstract idea, and that is why Petitioners did not propose it as one.
`
`E.
`
`TT could not assert that a static price axis is inventive in the CBMs.
`
`In the CBMs, because of the record created by Petitioners, TT could not as-
`
`sert that a static price axis is an inventive concept. The static price axis was the
`
`main basis for the Federal Circuit’s holding in CQG that the claims were patent el-
`
`igible. CQG, at *6-7. Here, to avoid the strong record created by Petitioners, TT
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`correctly abandoned any argument that a static price axis is an inventive concept,
`
`and asserts instead the same, generic inventive concept for each of the challenged
`
`patents: the structure, makeup, and functionality of the claimed GUI tool. TT’s in-
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`ability to articulate an inventive concept on Petitioners’ record dooms its analysis.
`
`
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`- 5 -
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`
`
`Date: January 30, 2017
`
`1100 New York Avenue, N.W.
`Washington, D.C. 20005–3934
`(202) 371–2600
`
`
`
`
`
`CBM2015–00172
`Patent 7,783,556
`
`Respectfully submitted,
`STERNE, KESSLER, GOLDSTEIN & FOX P.L.L.C.
`
`/Richard M. Bemben/
`Robert E. Sokohl (Reg. No. 36,013)
`Lori A. Gordon (Reg. No. 50,633)
`Richard M. Bemben (Reg. No. 68,658)
`Attorneys for Petitioners
`
`
`- 6 -
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`
`
`CBM2015–00172
`Patent 7,783,556
`CERTIFICATE OF SERVICE (37 C.F.R. § 42.6(e))
`The undersigned hereby certifies that the foregoing PETITIONERS’ AD-
`
`DITIONAL BRIEFING IN LIGHT OF CQG AS AUTHORIZED BY THE
`
`BOARD’S JANUARY 23, 2017 ORDER was served electronically via e–mail on
`
`January 30, 2017, in its entirety on Attorneys for Patent Owner:
`
`Erika H. Arner, Joshua L. Goldberg, Kevin D. Rodkey,
`Rachel L. Emsley, Cory C. Bell
`FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER, LLP
`Erika.arner@finnegan.com; Joshua.goldberg@finnegan.com;
`Kevin.rodkey@finnegan.com; Rachel.emsley@finnegan.com;
`Cory.bell@finnegan.com; Trading–Tech–CBM@finnegan.com
`
`Steven F. Borsand, Jay Q. Knobloch
`TRADING TECHNOLOGIES INTERNATIONAL, INC.
`tt–patent–cbm@tradingtechnologies.com
`jay.knobloch@tradingtechnologies.com
`
`Michael D. Gannon, Leif R. Sigmond, Jr., and Jennifer M. Kurcz
`MCDONNELL BOEHNEN HULBERT & BERGHOFF LLP
`gannon@mbhb.com
`sigmond@mbhb.com
`kurcz@mbhb.com
`
`Respectfully submitted,
`STERNE, KESSLER, GOLDSTEIN & FOX P.L.L.C.
`
`/Richard M. Bemben/
`Robert E. Sokohl (Reg. No. 36,013)
`Lori A. Gordon (Reg. No. 50,633)
`Richard M. Bemben (Reg. No. 68,658)
`Attorneys for Petitioners
`
`Date: January 30, 2017
`
`1100 New York Avenue, N.W.
`Washington, D.C. 20005–3934
`(202) 371–2600
`
`
`
`
`
`
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