DCT
1:04-cv-05312
Trading Tech Intl v. eSpeed Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Trading Technologies International, Inc. (Delaware)
- Defendant: eSpeed, Inc. (Delaware), eSpeed International Ltd. (United Kingdom), Ecco LLC (Illinois), and EccoWare Ltd. (United Kingdom)
- Plaintiff’s Counsel: McDonnell Boehnen Hulbert & Berghoff LLP
- Case Identification: 1:04-cv-05312, N.D. Ill., 12/22/2005
- Venue Allegations: Venue is alleged to be proper in the Northern District of Illinois because the Defendants conduct business, maintain offices, and market, license, and sell their trading software within the district, which provides access to local exchanges such as the Chicago Board of Trade.
- Core Dispute: Plaintiff alleges that Defendant’s electronic futures trading platforms infringe patents related to a graphical user interface featuring a static price display for click-based trading.
- Technical Context: The technology relates to graphical user interfaces for high-frequency electronic trading, where the speed and efficiency of order entry are critical to capitalizing on rapid market fluctuations.
- Key Procedural History: The complaint notes that Defendant eSpeed acquired Defendant Ecco on or about October 20, 2004. Subsequent to the complaint's filing, both patents-in-suit underwent ex parte reexamination proceedings at the U.S. Patent and Trademark Office, which concluded in 2009 with the confirmation of all originally issued claims.
Case Timeline
| Date | Event |
|---|---|
| 2000-03-02 | Priority Date for '304 & '132 Patents |
| 2004-07-20 | U.S. Patent 6,766,304 Issues |
| 2004-08-03 | U.S. Patent 6,772,132 Issues |
| 2004-10-20 | Defendant eSpeed acquires Defendant Ecco |
| 2005-12-22 | Second Amended Complaint Filing Date |
| 2009-03-31 | Reexamination Certificate for '304 Patent Issues, Confirming All Claims |
| 2009-03-31 | Reexamination Certificate for '132 Patent Issues, Confirming All Claims |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 6,766,304 - "Click Based Trading with Intuitive Grid Display of Market Depth"
- Issued: July 20, 2004
The Invention Explained
- Problem Addressed: The patent identifies the slowness of conventional electronic trading interfaces as a critical problem. In fast-moving markets, the time required for a trader to manually input multiple order elements (e.g., price, quantity, buy/sell) can cause them to "miss" a desired price as the market moves away (’304 Patent, col. 2:47-58).
- The Patented Solution: The invention is a graphical user interface that displays market information on a grid. Crucially, it features a "common static price axis"—a fixed column of prices that does not move or reorder. Alongside this static axis, indicators representing bid and ask quantities at those prices are dynamically displayed and move up or down the grid as the market fluctuates (’304 Patent, col. 3:8-24; Fig. 3). This configuration allows a trader to send a trade order with a "single action," such as a mouse click, on a desired price, dramatically reducing order entry time (’304 Patent, col. 4:55-61).
- Technical Importance: By targeting the manual order entry process, which the patent asserts is the slowest part of the trading cycle, the invention aimed to give traders a significant competitive speed advantage (’304 Patent, col. 2:39-46).
Key Claims at a Glance
- The complaint does not specify which claims are asserted but alleges infringement of "one or more of the claims" (Compl. p. 6, Relief Requested (A)). Independent claim 1 is representative of the method claims.
- Independent Claim 1 elements:
- A method for displaying market information and facilitating trading on a graphical user interface.
- Dynamically displaying a first indicator (e.g., buy quantity) in a bid display region corresponding to the highest bid price.
- Dynamically displaying a second indicator (e.g., sell quantity) in an ask display region corresponding to the lowest ask price.
- Displaying the bid and ask regions in relation to fixed price levels along a "common static price axis."
- When the inside market changes, the indicators move relative to the static price axis, which itself does not move.
- Displaying an order entry region corresponding to the price axis.
- In response to a "single action of a user input" on a location in the order entry region, setting parameters and sending a trade order to the exchange.
- The complaint reserves the right to assert other claims, including dependent claims.
U.S. Patent No. 6,772,132 - "Click Based Trading with Intuitive Grid Display of Market Depth"
- Issued: August 3, 2004
The Invention Explained
- Problem Addressed: As a member of the same patent family as the ’304 Patent and sharing an identical specification, the ’132 Patent addresses the same problem of slow, multi-step order entry in electronic trading (’132 Patent, col. 2:45-58).
- The Patented Solution: The patent describes the same graphical user interface with a static price axis and dynamic bid/ask indicators, enabling rapid trade placement via a single user action (’132 Patent, col. 3:8-23). The claims of the ’132 Patent are directed to the method of placing the trade order itself, as well as the client system and software for doing so.
- Technical Importance: The technical importance is identical to that of the ’304 patent: providing a speed advantage to traders by simplifying and accelerating the order entry process (’132 Patent, col. 2:39-46).
Key Claims at a Glance
- The complaint does not specify which claims are asserted. Independent claim 1 is representative of the method-of-placing claims.
- Independent Claim 1 elements:
- A method of placing a trade order for a commodity on an electronic exchange.
- Setting a preset parameter for the trade order.
- Displaying market depth via a dynamic display of bids and asks aligned with a "static display of prices," which does not move when the inside market changes.
- Displaying an order entry region aligned with the static prices.
- Selecting a particular area in the order entry region via a "single action of the user input device."
- In response to the selection, setting additional parameters for the trade order and sending it to the exchange.
- The complaint reserves the right to assert other claims, including dependent claims.
III. The Accused Instrumentality
Product Identification
- The complaint identifies "Defendant eSpeed's futures trading products" generally, and specifically names "EccoPro and EccoSpreader" as infringing products (Compl. ¶¶25-26, ¶¶35-36).
Functionality and Market Context
- The complaint alleges that the accused instrumentalities are trading software products that provide access to electronic exchanges, including the Chicago Board of Trade (Compl. ¶¶11, 16). The complaint states that Defendants actively market, demonstrate, license, and sell this software (Compl. ¶¶11, 16). The complaint does not, however, provide specific details regarding the technical operation or user interface of the EccoPro or EccoSpreader products. No probative visual evidence provided in complaint.
IV. Analysis of Infringement Allegations
The complaint makes general allegations of infringement without providing a detailed, element-by-element comparison of the accused products to the patent claims. The infringement theory must be inferred from the nature of the patents and the general function of the accused products.
'304 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| dynamically displaying a first indicator in...a bid display region...and a second indicator in...an ask display region... | The complaint does not provide sufficient detail for analysis of this element. | ¶25 | col. 14:24-34 |
| 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...indicators moves... | The complaint does not provide sufficient detail for analysis of this element. | ¶25 | col. 14:35-46 |
| displaying an order entry region comprising a plurality of locations for receiving commands to send trade orders... | The complaint does not provide sufficient detail for analysis of this element. | ¶25 | col. 14:55-59 |
| 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 for a trade order...and sending the trade order... | The complaint does not provide sufficient detail for analysis of this element. | ¶25 | col. 14:60-65 |
Identified Points of Contention
- Technical Questions: A primary factual dispute will concern the actual operation of the accused EccoPro and EccoSpreader software. Does the user interface of these products, when used for futures trading, display bid and ask quantities that move dynamically relative to a fixed price scale? The complaint provides no evidence on this point, making it a central question for discovery.
- Scope Questions: Assuming the accused products feature a price-ladder display, a key legal dispute will be whether that display meets the "common static price axis" limitation. For example, if the accused display allows for re-centering, does that action negate the "static" nature of the axis as claimed in the patent?
V. Key Claim Terms for Construction
The Term: "common static price axis" (and "static display of prices")
Context and Importance
This term is the technological core of the asserted patents. The infringement case for both patents hinges on whether the accused products' price displays are "static" in the manner claimed. The definition will determine whether displays that can be re-centered or re-scaled fall within the scope of the claims.
Intrinsic Evidence for Interpretation
- Evidence for a Broader Interpretation: The specification contrasts the invention with prior art where the entire market grid changes, suggesting "static" could mean that the price levels themselves do not re-order or change value relative to one another during market fluctuations (’304 Patent, col. 9:8-13).
- Evidence for a Narrower Interpretation: The preferred embodiment describes the price column as a fixed list of price ticks where "the values in the price column are static; that is, they do not normally change positions unless a re-centering command is received" (’304 Patent, col. 8:64-67). A defendant could argue this explicit mention of a "re-centering command" as an exception implies that in normal operation, the axis is absolutely fixed, and that any display that automatically re-centers would not be "static."
The Term: "single action of a user input"
Context and Importance
This term defines how a user must interact with the interface to place a trade. Its construction is critical for determining whether the accused products, which may require different user inputs (e.g., double-click, click-and-confirm), meet this limitation.
Intrinsic Evidence for Interpretation
- Evidence for a Broader Interpretation: The specification explicitly states that the invention is not limited to a mouse click and that "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" (’304 Patent, col. 4:16-24). This language provides strong support for a broad construction.
- Evidence for a Narrower Interpretation: The patent repeatedly emphasizes speed and the reduction of steps, framing the invention around a "single click of a computer mouse button" (’304 Patent, col. 4:57-59). A defendant might argue that despite the broader definitional language, the context of the invention requires an interpretation limited to instantaneous, one-step actions.
VI. Other Allegations
- Indirect Infringement: The complaint alleges that Defendants actively induce infringement by promoting, advertising, and instructing customers on how to use the accused products in an infringing manner (Compl. ¶¶27, 37). It also makes a conclusory allegation of contributory infringement (Compl. ¶¶28, 38).
- Willful Infringement: The complaint alleges that Defendants' infringement is "willful and deliberate" (Compl. ¶¶29, 39). No specific facts are pleaded to support pre-suit knowledge of the patents-in-suit.
VII. Analyst’s Conclusion: Key Questions for the Case
- A key evidentiary question will be one of technical implementation: Does the software architecture and user interface of the accused eSpeed products, including EccoPro and EccoSpreader, actually incorporate the core claimed features? Specifically, discovery will need to establish whether these products display market data against a static price axis and allow for trade entry via a single user action, as the complaint's conclusory allegations leave this as a central unknown.
- A core issue will be one of definitional scope: How will the court construe the term "common static price axis"? The case may turn on whether this limitation is interpreted narrowly to mean a price scale that is absolutely fixed during trading, or more broadly to cover price-ladder displays that may permit user-initiated re-centering without reordering the price levels themselves.
- A final question will concern functionality: Does the order entry mechanism in the accused products constitute a "single action of a user input" as defined by the patent? The resolution will depend on whether the court adopts the patent’s broad explicit definition or a narrower interpretation based on the embodiments described.