No. 04 € 5312 Page 20

the granting of licenses, a large market share for plaintiff, a minuscule share for defendant,
twelve major non-infringing competitors and the availability of a damages remedy were enough

to rebut the presumption in Rosemount, Inc. y. U.S. Int’| Trade Commission, 910 F.2d 819, 822

(Fed. Cir. 1990). Later, however, in Polymer Technologies, Inc. v. Bridwell, 103 F.3d 970 (Fed.

Cir. 1996), the bases for rebutting the presumption were limited to three (with a recognition
that “similar” exceptions might qualify): the infringer has ceased or will soon cease infringing,
the plaintiff has indicated a willingness to give up its exclusivity and has established the price
that will cause it to do so by granting non-exclusive licenses, or it has unduly delayed in

bringing suit. Neither the first nor the third basis is present here.

Accordingly,

we decline, for now, to issue a preliminary injunction. We emphasize “for now.” The views


No. 04 € 5312 Page 4

column 1202 will send an order to market to sell 17 lots at a price of 90”).' Thus, focus should
be placed on price levels, rather than prices.

Our construction of “order entry region” of the ‘304 patent is similar to that of the
analogous provision in the ‘132 patent. We construe the order entry region to mean an area
comprising a plurality of locations where users may enter commands to send trade orders, and
that each location corresponds to a price level along the common static price axis.

Finally, we construe “single action of a user input device” in the same vein as the similar
provision in the ‘132 patent. “Single action of a user input device” means 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. We disagree with defendant’s focus on the “computer command” rather than the
user action and its deconstruction of a single mouse click into separate acts.

The next step of the infringement analysis requires us to compare the construed claims
with the accused device. This comparison is a question of fact. Southwall Technologies, Inc. v.
Cardinal IG Co., 54 F.3d 1570, 1575 (Fed. Cir. 1995). Literal infringement occurs when “each
limitation of the claim [is] present in the accused device.” Telemac Cellular Corp. v. Topp
Telecom, Inc., 247 F.3d 1316, 1330 (Fed. Cir. 2001). “Literal infringement of a claim exists
when each of the claim limitations ‘reads on,’ or in other words is found in, the accused
device.” Allen Eng’g Corp., 299 F.3d at 1345. Under the doctrine of equivalents, the accused
product may also infringe if it has insubstantial changes from the patented device. Sofamor

Danek Group, Inc., 74 F.3d at 1221. As with validity, after defendant has raised substantial

'This interpretation of “price level” also applies to the ‘132 patent, in which plaintiff uses identical
language: “a right click in the BidQ column 1201 at the same price level of 87 would send a buy limit order to
the market for a quantity of 5 at a price of 87” (‘132 patent, col. 10, Il. 18-20); “a left click on the 20 in the

AskQ column 1202 will send an order to market to buy 17 lots at a price of 90” (‘132 patent, col. 10, II. 1-3).


No. 04 C5312 Page 5

a faster computer, with related software, was substituted for the first computer in February
1999. Thus, if the program was sufficiently perfected before March 2, 1999, to permit its
commercial exploitation, it is conceivable that it could have been so used. The evidence that it
was so used just is not there.

In the story Brumfield is quoted as saying, “I basically kept it to myself a little over a
year .... I didn’t mind giving the screen up because I made a killing on it for over a year.”
Defendant infers the “little over a year” refers to the period before the application, although
the more reasonable interpretation is that he was referring to the period prior to the interview,
presumably a few days prior to the publication of the story on August 28, 2000. This
interpretation is supported by Brumfield’s trading records — he did indeed make a killing in
July and August 1999.

The depositions of the three named inventors, programmer consultant Simon Tam, and
Farley Owens, who worked with Tam, have all been taken. They all disclose a consistent
version of events. A version of the software was installed in a computer in Brumfield’s office
in January 1999, although not the computer he used for trading. But the software was a mess
— it kept crashing and displaying inaccurate market data — until it finally was made usable in
the late spring or summer of 1999.

Simon Tam and Farley Owens worked on the program primarily at plaintiff's offices
in Evanston. Owens lived in the building housing Brumfield’s office in Chicago, and he from
time to time worked on the program at Brumfield’s office before and after Brumfield was
engaged in trading. Tam did test-trading as part of the development, placing orders beyond
the market and then cancelling them. One time he placed a one-contract order, forgot to cancel

it, and the order was thereafter executed at a loss. A remote hookup permitted them to “talk”


No. 04 € $312 Page 21

expressed here may well cause defendant, as well as others plaintiff claims are infringing, to
reconsider their plans. And if defendant chooses instead to confront plaintiff in the
marketplace, then this court will have to reconsider its present belief that there has not been

a sufficient showing of irreparable harm.

Aro. econ

« JAMES B. MORAN
ior Judge, U. S. District Court

CL 4 2005.


No, 04 € 5312 Page 18

to read the “overlap” limitation into claim 1. The fact that defendant’s system allows order
entry in the bid and ask price columns, which do not overlap with the bid and ask display
columns, does not avoid infringement of claim 1.

Turning now to the “single action of a user input device” element that is present in both
patents, defendant focuses on its pop-up window and states that “there are multiple steps to
order entry” in its system. But those multiple steps are not user steps and are instead computer
steps that are related to its pop-up window, which, as discussed above, is an optional feature
that may be ignored for orders placed at the default quantity. When the user clicks on a cell,
defendant states that “this action sends a command that prompts the software to display the
pop up window, showing potential order quantities.” Defendant differentiates its system based
on what the software does and not the user’s actions. Defendant’s focus on the “computer
command” that follows a user action is clear from its proposed claim construction. After the
pop-up window appears, the user may place an order at the default level by simply releasing
the mouse button, which up to this point has been depressed. Any automatic movement of the
pointer to the pop-up window cannot be construed as a user action. It is true that the pop-up
window enables the trader to change the quantity of his order, but this is an optional, not a
required, step, and does not add a user action. If the pop-up window required more than
completing the mouse click, then defendant would have a much stronger case for multiple
action order entry. But as it stands, a user may complete an order with defendant’s system
with a single user action by clicking a mouse, and that fact evidences the lack of substantial
merit for the non-infringement defense as to the “single action of the user input device” element
of the ‘132 patent and ‘304 patents.

Even if defendant’s order entry technique could be construed as involving more than


No, 04 C 5312 Page 10

to the common static price axis;

displaying an order entry region comprising a plurality of

locations for receiving commands to send trade orders, each

location corresponding to a price level along the common static

price axis; and

in response to a selection of a particular location of the order entry

region by a single action of a user input device, setting a plurality

of parameters of a trade order relating to the commodity and

sending the trade order to the electronic exchange.
‘304 patent, claim 1, col. 12, ll. 35-67, col. 13, Il. 1-3. As is evident from the claims above, the
‘132 and ‘304 patents share common language. Our construction of the claims will focus on the
disputes over that language.

We first turn to the term “static display of prices,” which plaintiff construes as “a
display of prices which has price levels that do not normally change positions in response to
new market information.” Defendant construes the term as “a display of cells containing
prices, the values of which do not move or change unless the user enters a manual recentering
command.” In their constructions, both parties seem to anticipate the impact of defendant’s
automatic recentering feature. Plaintiffs version leaves open the possibility of movement, while
defendant’s version forecloses all but manual recentering. Turning to the language of the
claim, claim 1 mentions only that the static display of prices “does not move in response to a
change in the inside market.” Thus the claim provides only a situation in which the price
display does not move, and does not state that the display may never move. In its briefs
defendant ignores the qualification, “to a change in the inside market,” and gives the inaccurate
impression that claim 1 requires the static price display to “never move” under any and all
circumstances. The limitation that the static price display “never moves” is found in dependent

claim 55, which, as plaintiff correctly observes, may not be read to limit the independent claim.

See Innova/Pure Water, Inc., 381 F.3d at 1123 (quoting Karli h., Inc. v. Surgical


No. 04 C 5312 Page 7

trading computer, the developmental computer in his office, or the computer in Evanston.
Griffen and Owens suggest that the brief video clips of the software displayed on the monitor
could have come from their efforts in Evanston. They also could have come from Owens’ work
at Brumfield’s office or from Brumfield’s trying to make the program work. But they do not
tell us whether or not the software was working and, in one instance, it apparently indicates
that it was not working.

And, Brumfield and the others are unanimous in stating it was not working well enough
to use it for commercial trading prior to March 2, 1999. Brumfield cannot now recall when he
first traded using the new software, but he is “stone certain” that when he agreed to March 2,
1999, as the critical date, he then knew he had done no commercial trading using that software
prior to that date. That recollection is akin to the evidence concept of past recollection
recorded. March 2, 1999, is a conservative date. The actual date when the software was
commercially usable and commercially used was probably well after that date.

The people involved in the development were not eccentric inventors unschooled in
patent law, see FMC Corp. v. Hennessy Indus., Inc., 650 F.Supp. 688 (N.D.Iil. 1986), vacated
in part on other grounds, 836 F.2d 521 (Fed. Cir. 1987). They were sensitive to the one year bar
rule, and it is highly unlikely that they would have taken risks with the filing date. We are not
persuaded that there is a substantial or even some likelihood that the invention was
commercially exploited before March 2, 1999.

We turn, then, to consideration of whether plaintiff has established that it is likely to
succeed on its contention that defendant infringes the patents. We conclude that it has. A
patent infringement analysis involves two steps. “First, a court must determine as a matter of

law the correct scope and meaning of a disputed claim term .... Second, the analysis requires


No. 04 € 5312 Page 6

to the development computer in Brumfield’s office.

Tam and others recall that he was employed at TradeLink after March 4, 1999, but he
returned to plaintiff for several days thereafter in order to get the software functioning and,
indeed, continued to work on the program before and after his work at TradeLink for a period
extending into the summer of 1999. Jay Twery, who is familiar with Tam’s employment at
TradeLink, has submitted two affidavits. In the first, he states that Tam went to work there
on February 16, 1999, took some time off to work on plaintiff’s software, and returned to
TradeLink for good on February 22, 1999. He based that affidavit on TradeLink’s records —
the events he described happened six years ago. In the second affidavit he notes that Tam
received some pay for the period February 16-28, 1999, that he returned to plaintiff for some
period, and that he cannot recall when Tam returned to TradeLink for good. While it is clear
that there was a period when Tam was dividing his time between TradeLink and plaintiff, we
are persuaded that the chronology stated by Tam is reasonably accurate.

In the aftermath of the hearing, plaintiff has come up with two more affidavits. One is
from Andrew Moak Griffen, who managed Brumfield’s office. Defendant complains that
Griffen was not identified as a witness with knowledge of the purported invention, and,
accordingly, to the limited extent that his representations relate to Brumfield’s lack of use of
the software, we disregard it. But he does tell us that Brumfield was using his prior software,
X_Trader, past the critical date, and, indeed, he continued to license that software through
April 1999,

Both that affidavit and another executed by Owens provide some information about the
video clips. Brumfield had a 50-inch plasma computer monitor. He recorded what was

displayed on that monitor. What was displayed on that monitor could have come from his


~ No. 04 C5312 Page 19

one mouse click, such action would be covered by plaintiff’s preferred embodiment, which
states, “any action by a user within a short period of time, whether comprising one or more
clicks of a mouse button or other input device, is considered a single action of the user for the
purposes of the present invention” (‘132 patent, col. 4, Il. 15-19; ‘304 patent, col. 4, Il. 19-23).
Plaintiff has thus shown that defendant’s non-infringement defense lacks substantial merit and
in light of its showing of validity has demonstrated likelihood of success on the merits.

The two most critical factors in determining whether to grant or deny a preliminary
injunction are the likelihood of success and irreparable harm. Reebok Int’l, Ltd. v. J. Baker,

Inc., 32 F.3d 1552, 1556 (Fed. Cir. 1994),

Defendant’s new programs have just entered the
market, and we do not know what success, if any, there may have been. Plaintiff is concerned
about loss of market share, particularly if defendant markets its programs at no cost or a
reduced price, linking its programs to a cash exchange in which it has proprietary rights. But
possible loss of market share and speculation that such losses might occur do not amount to
proof of special circumstances. Nutrition 21 v. United States, 930 F.2d 867, 871 (Fed. Cir. 1991).
Indeed, given the court’s assessment of plaintiff’s likelihood of success, defendant may hesitate
to attempt to penetrate the market in any meaningful way.

Plaintiff does not, however, need to prove irreparable harm. When a patentee has made
a clear showing of patent validity and infringement, and we believe plaintiff has done so here,
irreparable harm is presumed, so as to protect its exclusivity rights. Amazon.com v.

Barnesandnoble.com, 239 F.3d 1343, 1350 (Fed. Cir. 2001). That presumption is rebuttable and


No. 04 C 5312

A method of placing a trade order for a commodity on an electronic exchange
having an inside market with a highest bid price and a lowest ask price, using a

graphical user interface and a user input device, said method comprising:
setting a preset parameter for the trade order

displaying market depth of the commodity, through a dynamic
display of a plurality of bids and a plurality of asks in the market
for the commodity, including at least a portion of the bid and ask
quantities of the commodity, the dynamic display being aligned
with a static display of prices corresponding thereto, wherein the
static display of prices does not move in response to a change in
the inside market;

displaying an order entry region aligned with the static display
prices comprising a plurality of areas receiving commands from
the user input devices to send trade orders, each area
corresponding to a price of the static display of prices; and
selecting a particular area in the order entry region through single
action of the user input device with a pointer of the user input
device positioned over the particular area to set a plurality of
additional parameters for the trade order and send the trade
order to the electronic exchange.

‘132 patent, claim 1, col. 12, Il. 2-27.

Claim 1 of the ‘304 patent reads as follows:

A method for displaying market information relating to and facilitating
trading of a commodity being traded in an electronic exchange having an inside
market with a highest bid price and a lowest ask price on a graphical user

interface, the method comprising:

dynamically displaying a first indicator in one of a plurality of
locations in a bid display region, each location in the bid display
region corresponding to a price level along a common static price
axis, the first indicator representing quantity associated with at
least one order to buy the commodity at the highest bid price
currently available in the market;

dynamically displaying a second indicator in one of a plurality of
locations in an ask display region, each location in the ask display
region corresponding to a price level along the common static
price axis, the second indicator representing quantity associated
with at least one order to sell the commodity at the lowest ask
price currently available in the market;

displaying the bid and ask display regions in relation to fixed price
levels positioned along the common static price axis such that
when the inside market changes, the price levels along the
common static price axis do not move and at least one of the first
second indicators moves in the bid or ask display regions relative

Page 9


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

TRADING TECHNOLOGIES )
INTERNATIONAL, INC., )
)
Plaintiff, )

) \

vs. ) No. 04 C 5312
)
eSPEED, INC., )
)
Defendant. )

MEMORANDUM OPINION AND ORDER

Plaintiff has two patents, U.S. Patent Nos. 6,766,304 (the ‘304 patent), and 6,772,132
(the ‘132 patent). Both relate to a software program for use in electronic trading in futures.
The software program combines a static ladder price column with moving bid and asked
market data, together with a single-action order entry. Defendant came into the market with
its own software program. It does not argue that its first program is non-infringing. Rather,
it changed its program and contends that the new program does not infringe. It also contends
that the patents are invalid because the “invention” is obvious, and because of prior public use
more than a year before the patent applications, and that there is no evidence of irreparable
harm. Plaintiff seeks a preliminary injunction. That motion is, for now, denied.

A preliminary injunction should be granted upon a showing of a reasonable likelihood
of success on the merits, irreparable harm if the injunction is not granted, a balance of
hardships tipping in favor of the plaintiff, and a tolerable effect on the public interest. We
turn first to likelihood of success on the merits.

Defendant contends that there is a substantial question of invalidity. We disagree. The


No. 04 € $312 Page 12

and ask displays be permanently wedded to a cell of the static price display. The dynamic bid
and ask values constantly move up and down along the price axis, and if those values were
“connected with and always unambiguously matched to a price value,” as defendant contends,
then the values in the price axis would be in constant motion, which is not the case. We
construe the “dynamic display” term to mean a display of a plurality of bids and a plurality of
asks that are aligned with and correspond to the static display of prices. In this sense, when the
bid and ask prices move up and down in their respective columns they are not unambiguously
matched with a specific price in the static price axis, although they are matched with some
price.

Next we construe the “order entry region” section to mean an area that comprises a
plurality of locations where users may place orders by way ofa user input device, and that each
location corresponds to a price in the static display of prices. Defendant attempts to limit the
phrase so that cells into which users enter orders are always linked to a value in the static price
axis, but the claim does not include that limitation. The words “aligned” and “corresponding”
do not mean “unambiguously matched.” It is improper for “courts to say that [claims] contain
limitations which are not in them.” Intervet America, Inc. v. Kee-Vet Laboratories, Inc., 887
F.2d 1050, 1054 (Fed. Cir. 1989).

We construe the terms “single action of the user input device” as 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. In the specification, plaintiff states that terms are not limited to a click of the
mouse button, or even the use of the mouse as the input device (‘132 patent, col. 4, Il. 12-19).
Defendant’s proposed construction allows for multiple mouse clicks, but also states, “an act by

a user which sends a single computer command.” That phrase “computer command”


No. 04 C §312 Page II

Dynamics, Inc., 177 F.3d 968, 971-72 (Fed. Cir. 1999)).

With respect to manual recentering, the specification states that “static” means that the
values in the price column “do not normally change positions unless a re-centering command
is received” (‘132 patent, col. 7, Il. 46-48). Plaintiff also describes that recentering command
as a “one click centering feature,” which suggests that a user enters the command with a mouse
or similar device (‘132 patent, col. 8, II. 49-60). Dependent claims 24 and 34 mention
recentering, but do not express a manual command limitation. And dependent claim 44
requires that a user provide a recentering instruction. There is no clear indication that the
manual recentering command limits claim 1 or the definition of “static price axis.” Thus, we
construe “static display of prices” as a display of prices which has price levels or rows that do
not normally change positions in response to new market information. We add the term “rows”
as synonymous with “levels.” Defendant contends that neither “levels” nor “rows” should be
included in the definition of “static display of prices,” and posits that “the issue is what ‘prices’
means.” But the real issue is what “static display of prices” means, and we understand that
phrase to include price levels, which is where the prices are located and displayed. In other
words, the display of prices is a region in which prices, represented by numbers, are shown.
For the reasons stated above, we also reject defendant’s inclusion of a manual recentering
limitation in its proposed construction of the phrase, “the static display of prices does not move
in response to a change in the inside market.”

According to the claim, a “dynamic display” of a plurality of bids and asks is “aligned”
with the static display of prices that corresponds to the dynamic display. The parties disagree
as to how the displays of bids and asks are related to the display of prices. Defendant’s

proposed construction posits unnecessary limits, as nothing in the claims requires that the bid


No. 04 © 5312 Page 8

a comparison of the properly construed claims to the accused device, to see whether that device
contains all the limitations, either literally or by equivalents, in the claimed invention.” CCS
Fitness, Inc. y. Brunswick Corp., 288 F.3d 1359, 1365 (Fed. Cir. 2002) (internal citation

omitted). “Claim construction is a matter of law” (Allen Eng’g Corp. v. Bartell Indus. Inc., 299

F.3d 1336, 1344 (Fed. Cir. 2002)) that must begin with the language of the claim. Hockerson-

Halberstadt, Inc. vy. Avia Group Int’l, Inc., 222 F.3d 951, 955 (Fed. Cir. 2000). We presume

that the claim terms carry their ordinary meaning. Liebel-Flarsheim Co. v. Medrad, Inc., 358
F.3d 898, 913 (Fed. Cir. 2004); CCS Fitness, 288 F.3d at 1366. To determine that meaning, we
focus on the claims and other intrinsic evidence of record. Teleflex, Inc. v. Ficosa North
America Corp., 299 F.3d 1313, 1325 (Fed. Cir. 2002). We attribute to the claim “the meaning
it would have to a person of ordinary skill in the art at the time of the invention.” Innova/Pure
Water, Inc. v. Safari Water Filtration Sys. Inc., 381 F.3d 1111, 1116 (Fed. Cir. 2004). The
claims are central to the claim construction analysis because they “define the invention to which
the patentee is entitled the right to exclude.” Id. at 1115. The patentee, acting as his own

lexicographer, may limit or expand the meaning of a term. Teleflex, 299 F.3d at 1325, We are

not obligated to interpret the claims “conclusively and finally during [this] preliminary
injunction proceeding.” Sofamor Danek Group, Inc. v. DePuy-Motech, Inc., 74¥.3d 1216, 1221
(Fed. Cir. 1996). See Oakley, Inc. v. Sunglass Hut Int’l, 316 F.3d 1331, 1345 n.3 (Fed. Cir. 2003)
(quoting Jack Guttman, Inc. v. Kopykake Enters., Inc., 302 F.3d 1352, 1361 (Fed. Cir. 2002) (“a
district court can issue ‘tentative’ or ‘rolling’ claim constructions when ‘faced with construing
highly technical claim language on an expedited basis.’”)).

We turn to the language of the claims, beginning with claim 1 of the ‘132 patent, which

recites:


No. 04.€ 5312 Page 4

And it
questions the reasons for plaintiff's commercial success. But do these reasons raise a
substantial question regarding the vulnerability of the patent to an invalidity defense? We
think not.

We agree that the need of futures traders for increased speed and accuracy in electronic
futures trading is of relatively recent origin. But that does not necessarily mean that a
combination of two concepts known in the prior art to accomplish that purpose is obvious.
Changing needs and technological innovation may well lead, in time, to the introduction of new
and better devices, procedures and programs, and the patent system rewards the innovator
unless the invention was obvious to those skilled in the art. The PTO did not believe that
combination to be obvious. The copying was, apparently, widespread, and futures traders,
after an initial hesitation, have embraced the new program format enthusiastically. Indeed,
defendant points to that commercial success as a reason why plaintiff would not be irreparably
harmed if a preliminary injunction is denied. We are persuaded that defendant has not raised
a substantial question respecting validity.

Defendant’s contention that the invention was in public use for more than a year prior
to the filing of the patent applications is equally unpersuasive. It argues that a named inventor,
Harris Brumfield, commercially exploited the invention more than a year prior to the critical
date of March 2, 1999. It bases that argument on some undisputed facts, a story in an August
28, 2000, trade periodical , snippets of deposition testimony, and some video clips.

The undisputed facts are that Brumfield entered into a consulting agreement with
plaintiff on September 29, 1998, for the development of the software program, that a computer

with software related to that program was installed in Brumfield’s office in January 1999, and


No. 04 € 8312 Page 15

questions as to infringement, plaintiff must show that those substantial questions tack

substantial merit. National Steel Car, Ltd., v. Canadian Pac. Ry. Ltd., 357 F.3d 1319 (Fed. Cir.

2004).

Attempting to tiptoe the fine line between valid design around, and infringement,
defendant divided what was a single column of prices into two columns. Those columns are
bounded to the left and right by vertically cascading bid and ask columns. And the prices
within that bounded area still occupy price levels. Importantly, the prices in the middle two
columns do not overlap one another, meaning that two different prices will never be
horizontally adjacent to each other. Thus, the prices are still aligned with the corresponding
bid and ask prices. Further, by splitting the single column into two columns, defendant did not
change the number of price levels.

Defendant states that the prices in its device are not static because they move when the
inside market changes, and they also move when the market drifts off the top or bottom of the
screen. On the first front, defendant illustrates that after a trade is entered in its device, the
price on the price level at which the trade was entered moves horizontally from one internal
column to the other. But this horizontal adjustment occurs entirely within the region in which
the prices are shown, and is thus contained with the “display of prices,” which remains static.
Further, and as discussed below in more detail with respect to the ‘304 patent, the price levels
remain static, no matter the amount of internal lateral movement of prices it transpires, because
the price merely moves horizontally along the price level.

In its second argument defendant emphasizes that the ‘132 patent allows for manual
recentering, which means that when the inside market ascends or descends off the trader’s

screen, the trader may recenter that market by clicking the mouse (‘132 patent, col. 8, II. 49-60).


_ No. 04 € 5312 Page 17

Despite defendant’s addition of a pop-up window, plaintiff has shown that defendant’s
non-infringement defense as to the “order entry region” element of the ‘132 and ‘304 patents
lacks substantial merit. Defendant argues that its pop-up window is not aligned with or
corresponding to a the static price display and thus does not infringe the order entry region
element of the ‘132 patent. While the pop-up window may not correspond or align with the
price display, the fact remains that a user still enters an order by clicking in one of many cells
that serves as an area to receive orders. Defendant argues that clicking on such a cell only
activates the pop-up window, and that another action is required to enter an order. However,
a user may enter an order regardless of the pop-up window simply by clicking on an order
entry cell. To place an order at the default quantity, a user may disregard the pop-up window.
Defendant also argues that “the bid and ask price columns of the defendant system are not
separate from and do not correspond to a price column; they are the price columns.” But the
claim states that the plurality of areas each correspond “to a price of the static display of
prices,” which does not preclude the order entry region corresponding to a price level.

Defendant is correct to observe that the differences in language between the ‘304 patent
and the ‘132 patent are not material. Our conclusion with respect to the order entry pop-up
window is no different for the ‘304 patent. The doctrine of claim differentiation benefits
plaintiff with respect to the ‘304 patent. Dependent claim 15 states: “The method of claim 14
wherein the bid order entry region overlaps with the bid display region and the ask order entry
region overlaps with the ask display region” (‘304 patent, claim 15, col. 13, Il. 61-63). Claim 14,
which focuses on the order entry region, is dependent on claim 1. Claim 1 does not specify that
the order entry regions must overlap with the price display regions. Under the doctrine of claim

differentiation, the narrow claim (15) cannot limit the broader claim (1), and thus it is improper


No. 04. © S312 Page 3

Art Systems.” Thus, no prior art discloses both a static price column and single-action order
entry feature, and there was no clear motivation to combine those elements in a single product.
This may well be because the program was a different way of doing business which, plaintiff
persuasively argues, met with some initial resistance from traders because it was unlike the
procedures with which they were familiar. The validity of the patent does not have the

imprimatur of a litigated decision.

The obvious copying by defendant, as
well as others, provides further support. And the undisputed great commercial success of the
program is a secondary consideration of considerable force.

Defendant attacks these conclusions for a number of reasons. It points out that until
rather recently futures trading was primarily by open outcry in the pits, a practice that has
dramatically given way to electronic trading. There was, thus, no pervasive commercial
demand for the type of invention at issue until the explosion of electronic trading in the late
1990s. Previously, the exchanges and brokers preferred an inside market centric perspective
because their trading was at the market. Only when the futures traders left the pits and had
a need for greater speed and accuracy did the need to combine a static price axis and single-
action order entry become obvious. Further, a showing of copying is only equivocal evidence
of non-obviousness in the absence of more compelling objective indicia of other secondary

considerations. Ecolochem, Inc. v. Southern California Edison Co., 227 F.3d 1361, 1380 (Fed.

Cir. 2000).


No. 04 € $312 Page 2

patent is presumed to be valid, absent a showing of a substantial question. The patents were
reviewed twice by the U.S. Patent and Trademark Office (PTO), once through the usual
procedures and then again through a special quality review procedure.

Defendant does not raise a substantial question of invalidity based on obviousness.
Defendant and its expert point to a number of electronic trading systems used globally by
exchanges, ranging from the London International Financial Futures Exchange (LIFFE), the
Tokyo Stock Exchange (TSE), the Tokyo International Financial Futures Exchange (TIFFE),
and the International Futures Exchange (Intex) of Bermuda. Defendant also argues that two
patents, U.S. Patent Nos. 5,297,031 (the ‘031 patent), and 6,408,282 (the ‘282 patent), disclose
the elements in plaintiff’s patents. According to defendant, the trading systems and the two
patents used a ladder view (the vertical display of adjacent bid, ask, and price columns) and
single click trading capability. Significantly, neither patent nor any trading system combines
both features. We note again, with emphasis, that plaintiff's patents survived a rigorous
double examination by the PTO, which considered many of the trading systems above,
including the ‘282 patent, and it also evaluated plaintiff's X_Trader device, another trading
system that defendant includes in its obviousness argument. Plaintiff also observes that
defendant compares the prior art with plaintiff's patents, not on the level of claims but, instead,
on the visual appearance of the respective systems. By doing so defendant essentially ignores
the important details of plaintiff's patents. Despite defendant’s ongoing global search for prior
art that discloses the elements in plaintiff’s patents, it has not defeated the presumption of
validity to which plaintiff is entitled. This is especially true due to the uncertain tone
defendant’s arguments occasionally take, as communicated in the following heading from one

of its briefs: “A Static Price Axis With a Moving Inside Market May Have Been Used In Prior


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improperly limits the terms, which focus primarily on the user’s actions.

Turning to the ‘304 patent, we construe “common static price axis” as a line of prices
comprising price levels that do not normally move when the inside market moves. The bid and
ask display regions correspond to the price levels in the static price axis, which is why the static
price axis is described as “common.” The parties disagree over the meaning of “axis.” In its
proposed construction defendant describes “common static price axis” as “a single straight line
of prices shared by the bid and offer quantity display regions, the values of each price cell do
not move or change unless the user enters a manual recentering command.” We reject the
“manual recentering command” limitation for the reasons stated above. We also disagree with
the description of the axis as a “line of prices” rather than “price levels,” which is the term used
in claim 1. Prices are the actual numbers that appear in the price levels. Defendant believes
that the term “price level” “refers generically to price values or amounts, in whatever form they
are displayed.” Contrary to defendant’s construction, that term is a generic reference to a
horizontal level on which a designated price resides and not to just that price as represented
by anumber. To illustrate, plaintiff explains that “a right click in the AskQ column 1202 in the
87 price row will send a sell order to market at a price of 87 and a quantity of 150” (‘304 patent,
col. 10, Il. 46-48). “Similarly, a right click in the BidQ column 1201 at the same price level of
87 would send a buy limit order to market for a quantity of 5 at a price of 87” (‘304 patent, col,
10, Il. 56-58). The price of 87 appears in neither column 1201 nor column 1202. Instead, it
appears in column 1203, the price column, Here “price level” signifies the cell in column 1201
or column 1202 that is along the same horizontal plane as the price of 87. When plaintiff
referred to a price, as in a specific number, rather than a horizontal level, it did not include the

words “level” or “row.” See ‘304 patent, col. 10, Il, 39-41 (“a left click on the 20 in the AskQ


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Defendant’s system uses automatic recentering, a feature that automatically recenters the inside
market in the event that it reaches the top or bottom of the trader’s screen. As discussed in the
claim construction section above, the manual recentering command does not limit the meanings
of “static display of prices” or “common static price axis.” But this does not mean that the
plaintiff's patents read on automatic recentering.

Even though automatic recentering may be an improvement on the static display of
prices and the common static price axis, it is not enough to raise a substantial question of
infringement. If no need for recentering arises, then the price display would remain static.
Recentering is a conditional and not a constant event. Automatic recentering does not
transform the price into a “moving target,” a common feature of prior art that incorporated
a dynamic price axis. In the vast majority of instances traders using defendant’s device will not
have the price move at the very moment when they enter orders. Plaintiff has shown that
defendant’s product infringes unless and until automatic recentering occurs, and that is enough
to demonstrate a lack of substantial merit in defendant’s claim.

With respect to the “common static price axis” of the ‘304 patent, defendant forcefully
argues that by creating two price columns, its system lacks an axis. However, splitting the
central column did not change the number of price levels, and it is the price levels that matter.
There remains one column/axis of price levels. Similarly, defendant also contends that it does
not infringe because its bid and ask regions do not correspond to a “common static price axis,”
as required by the ‘304 patent (‘304 patent, claim 1, col. 12, I. 44; col. 12, 1]. 51) because it lacks
a common axis. But defendant’s division of the single column into two columns affected no
substantial change, and the two columns together comprise a common axis of price levels to

which the adjacent bid and ask columns correspond.