Cedar Lane Tech Inc v. Prosperum Securities LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Cedar Lane Technologies Inc. (Canada)
  • Defendant: Prosperum Securities, LLC (Illinois)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 1:25-cv-15327, N.D. Ill., 12/17/2025
• Venue Allegations: Venue is alleged to be proper in the Northern District of Illinois because the Defendant has an established place of business in the district and has committed acts of alleged patent infringement there.
• Core Dispute: Plaintiff alleges that Defendant’s financial trading products and services infringe a patent related to systems for generating conditional trade offers for semi-anonymous participants based on their trading history.
• Technical Context: The technology at issue addresses electronic securities trading, where market participants are typically anonymous, by creating a system to allow liquidity providers to offer customized pricing to specific traders based on profiles derived from their past trading behavior.
• Key Procedural History: The complaint does not mention any prior litigation, Inter Partes Review (IPR) proceedings, or licensing history related to the patent-in-suit.

Case Timeline

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 8,577,782 - "Trading with conditional offers for semi-anonymous participants"

• Issued: November 5, 2013

The Invention Explained

• Problem Addressed: In modern electronic trading systems, the anonymity of participants prevents parties from setting prices based on knowledge of the counterparty (’782 Patent, col. 1:11-15; col. 2:50-54). This "one-price-fits-all" approach does not allow liquidity providers to differentiate pricing for different types of traders (e.g., "toxic traders" vs. "naive traders"), which can increase costs for all participants (’782 Patent, col. 6:32-47).
• The Patented Solution: The invention proposes a system where a trading entity, or "Taker," can use a "disposable profile identifier" when executing a trade (’782 Patent, col. 3:3-6). An exchange system associates this identifier with the Taker's trading history, allowing a "Liquidity Provider" to generate a profile based on that history (’782 Patent, col. 3:50-54; Fig. 1). Based on this profile, the Provider can generate a conditional offer with customized pricing that is only available to the Taker associated with that specific identifier (’782 Patent, Abstract; col. 2:25-31).
• Technical Importance: The described approach seeks to re-introduce informed pricing into anonymous electronic markets, potentially creating more efficient price matching and reducing the risks associated with trading against unknown counterparties (’782 Patent, col. 4:19-27).

Key Claims at a Glance

• The complaint does not specify which claims are asserted, instead referencing charts in an external exhibit (Compl. ¶11). The following analysis focuses on independent claim 1 as a representative claim.
• Independent Claim 1:
  • associating one of a plurality of trading entities with an identifier using a processor
  • acquiring trade history information including a history of trading transactions associated with said identifier
  • receiving an offer to buy or to sell a trading item from a liquidity provider based on a profile generated from said trade history information
  • the profile containing information that indicates whether said trading transactions associated with said trading entity would generate a profit
  • said offer being only made to said trading entity associated with said identifier
  • said offer being processed through an exchange that processes trading transactions for items having a bid/offer spread
• The complaint does not explicitly reserve the right to assert dependent claims.

III. The Accused Instrumentality

Product Identification

The complaint accuses "Exemplary Defendant Products" but does not name specific products or services in the body of the complaint (Compl. ¶11).

Functionality and Market Context

The complaint does not provide sufficient detail for analysis of the functionality of the accused instrumentalities. It alleges that the products "practice the technology claimed by the '782 Patent" and that Defendant sells them and distributes "product literature and website materials" for their use (Compl. ¶14, ¶16).

IV. Analysis of Infringement Allegations

The complaint alleges that the "Exemplary Defendant Products" infringe the '782 Patent but incorporates the specific infringement allegations by reference to claim charts in "Exhibit 2," which was not provided with the complaint (Compl. ¶16-17). Therefore, a detailed claim chart summary cannot be constructed. In prose, the complaint alleges that the accused products "satisfy all elements of the Exemplary '782 Patent Claims" through direct use, including internal testing, as well as by inducing infringement by customers (Compl. ¶12, ¶15, ¶16).

No probative visual evidence provided in complaint.

Identified Points of Contention

• Scope Questions: A central question may be whether the functionality of Defendant's trading platform constitutes the specific system architecture recited in the claims. For example, does Defendant's system "associate" a trader with an "identifier" for the express purpose of generating a "profile" and a "conditional offer" as the patent requires, or does it use trader identification for other conventional purposes (e.g., regulatory compliance, account management)?
• Technical Questions: The complaint lacks factual allegations explaining how the accused products perform the key claim steps. A point of contention will likely be whether the accused system actually generates a "profile containing information that indicates whether said trading transactions...would generate a profit" and then uses that specific profile to generate an "offer...only made to said trading entity," as required by claim 1 (’782 Patent, col. 11:1-5).

V. Key Claim Terms for Construction

The Term: "identifier"

• Context and Importance: The concept of an "identifier" that is distinct from a party's legal identity but is used to link their trading history is core to the invention's semi-anonymous framework. The scope of this term will be critical to determining whether standard account numbers or session tokens used in conventional trading systems meet this limitation.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification suggests the identifier's primary function is to "relate each trade performed" with a profile, without limiting its specific form (’782 Patent, col. 3:4-6). This may support an argument that any unique code linking a user to their activity could qualify.
  • Evidence for a Narrower Interpretation: The patent repeatedly describes the identifiers as "disposable profile identifiers" that Takers can "chose not to use," suggesting a voluntary, non-permanent, and purpose-built nature, distinct from a mandatory account number (’782 Patent, col. 3:3-8).

The Term: "profile"

• Context and Importance: Infringement hinges on whether the accused system generates a "profile" as claimed. The definition will determine if any collection of a user's trade data qualifies, or if it must be a specific analytical construct used to predict profitability and generate conditional offers.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification broadly defines "trading history" used for the profile as "any relevant information relating to the trader, including information relating to the past trades of the trader" (’782 Patent, col. 2:65-67). This could support viewing any stored record of a user's past transactions as a "profile."
  • Evidence for a Narrower Interpretation: Claim 1 requires the profile to contain "information that indicates whether said trading transactions...would generate a profit" (’782 Patent, col. 11:1-3). The specification provides specific examples of profile analysis, such as comparing execution prices to prices one minute later to calculate a simulated profit (’782 Patent, col. 4:50-62). This suggests the term requires more than just a raw log of trades; it implies a specific type of predictive, profitability-focused analysis.

VI. Other Allegations

Indirect Infringement

The complaint alleges induced infringement, stating that Defendant distributes "product literature and website materials" that instruct end users on how to use the accused products in a manner that infringes the ’782 Patent (Compl. ¶14-15).

Willful Infringement

The complaint asserts that Defendant has had "actual knowledge" of the ’782 Patent at least since the service of the complaint and corresponding claim charts (Compl. ¶13, ¶15). This forms the basis for an allegation of post-suit willful infringement.

VII. Analyst’s Conclusion: Key Questions for the Case

• A core issue will be one of technical implementation: Does the Defendant's trading system, as a factual matter, generate trader-specific "profiles" for the purpose of creating "conditional offers" as described in the patent? Or does it perform standard risk management and user identification that falls short of the patent’s detailed, profitability-driven profiling system?
• A key legal question will be one of definitional scope: Can terms central to the patent's semi-anonymous framework, such as "identifier" and "profile," be construed broadly enough to read on the features of a conventional, regulated securities trading platform, or are they limited by the specification to a more specialized, opt-in system for customized pricing?
• An immediate procedural question will be one of pleading sufficiency: Given the absence of specific factual allegations in the complaint body regarding the operation of the accused products, the initial phase of the case may focus on whether the complaint provides plausible grounds for infringement beyond conclusory statements that incorporate an unattached exhibit.