DCT

1:26-cv-00183

Cedar Lane Technologies Inc v. David Lerner Associates Inc

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Key Events
Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:26-cv-00183, E.D.N.Y., 01/13/2026
  • Venue Allegations: Venue is asserted based on Defendant having an established place of business within the Eastern District of New York.
  • Core Dispute: Plaintiff alleges that Defendant's unspecified financial trading products and services infringe a patent related to electronic trading systems that generate conditional offers for semi-anonymous participants based on their trading history.
  • Technical Context: The technology addresses risk and pricing in anonymous electronic financial markets by enabling customized trade offers based on a participant's historical trading profile without revealing their full identity.
  • Key Procedural History: The complaint does not mention any prior litigation, inter partes review proceedings, or licensing history related to the patent-in-suit.

Case Timeline

Date Event
2010-04-08 U.S. Patent No. 8,577,782 Priority Date
2013-11-05 U.S. Patent No. 8,577,782 Issue Date
2026-01-13 Complaint Filing Date

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

  • Patent Identification: U.S. Patent No. 8,577,782, titled "Trading with conditional offers for semi-anonymous participants," issued on November 5, 2013 (the ’782 Patent).

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

The Invention Explained

  • Problem Addressed: The patent's background section notes that the increasing automation and anonymity of electronic trading systems prevent participants from knowing the identity of their counterparties, precluding the ability to set prices based on information about that specific counterparty (’782 Patent, col. 1:5-15).
  • The Patented Solution: The invention describes a system where a trading entity ("Taker") is associated with an identifier, and their trading history is used to generate a profile (’782 Patent, col. 2:16-19). A "Liquidity Provider" can then analyze this profile to generate a conditional trade offer that is directed only to the specific Taker associated with that identifier, enabling "informed, semi-anonymous, trading" (’782 Patent, Abstract; col. 2:59-63). Figure 1 illustrates this architecture, showing a Liquidity Provider using a "Profile Analyzer" (24) and "Offer Generator" (26) to create offers based on "Trade History Profiles" (20) gathered from an exchange.
  • Technical Importance: This approach allows for more sophisticated pricing and risk management in anonymous markets, where a trader's past behavior (e.g., as a potentially informed "toxic trader") could be factored into the price they are offered (’782 Patent, col. 6:32-47).

Key Claims at a Glance

  • The complaint asserts infringement of one or more claims without specifying which ones, referring only to the "Exemplary '782 Patent Claims" (Compl. ¶11). Independent Claim 1 is representative of the patented method.
  • Essential Elements of Independent Claim 1:
    • Associating a trading entity with an identifier using a processor.
    • Acquiring trade history information associated with the identifier.
    • Receiving an offer from a liquidity provider based on a profile generated from that trade history.
    • The profile must contain "information that indicates whether said trading transactions associated with said trading entity would generate a profit."
    • The offer must be "only made to said trading entity associated with said identifier."
    • The offer is processed through an exchange that handles transactions for items with a bid/offer spread.
  • The complaint does not explicitly reserve the right to assert dependent claims.

III. The Accused Instrumentality

Product Identification

The complaint does not identify any accused product, method, or service by name (Compl. ¶11). It refers generally to "Exemplary Defendant Products" that are purportedly detailed in an "Exhibit 2" which was not filed with the complaint (Compl. ¶11, ¶16).

Functionality and Market Context

The complaint does not provide sufficient detail for analysis of the functionality of the accused instrumentalities. It makes only the conclusory allegation that the "Exemplary Defendant Products practice the technology claimed by the '782 Patent" (Compl. ¶16).

IV. Analysis of Infringement Allegations

The complaint alleges that Defendant’s products infringe the ’782 Patent but incorporates its specific infringement contentions by reference to a claim chart exhibit that was not provided with the public filing (Compl. ¶16-17). In the absence of this exhibit, the complaint's narrative theory is that the unidentified "Exemplary Defendant Products" satisfy all elements of the asserted claims (Compl. ¶16).

  • Identified Points of Contention: The lack of factual detail in the complaint raises foundational questions that will need to be resolved through discovery.
    • Evidentiary Questions: A primary question will be whether discovery reveals evidence that the accused systems perform the specific functions required by the claims. For example, what evidence demonstrates that Defendant's systems generate a "profile containing information that indicates whether said trading transactions... would generate a profit" and subsequently generate an offer that is "only made to" a specific trading entity based on that profile, as required by Claim 1?
    • Scope Questions: The dispute may turn on whether the functionality of Defendant's systems falls within the scope of the claims. For instance, does a general-purpose risk assessment or user categorization feature in a trading platform meet the specific "generate a profit" limitation of Claim 1?

No probative visual evidence provided in complaint.

V. Key Claim Terms for Construction

  • The Term: "profile containing information that indicates whether said trading transactions associated with said trading entity would generate a profit" (’782 Patent, Claim 1)

    • Context and Importance: This term is central to defining the invention. The infringement analysis will depend on whether the accused system creates a profile with this specific type of predictive or analytical information, as opposed to a more generic record of trade history or a simple risk score.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: Parties favoring a broader scope may argue that any metric correlated with profitability meets this limitation. The specification describes variables like "ACTPROF" (actual profit) as examples, which could be interpreted as illustrative rather than exhaustive ways to meet the claim element (’782 Patent, col. 5:1-4).
      • Evidence for a Narrower Interpretation: Parties favoring a narrower scope may point to the specification's detailed examples of calculating specific profit-related variables based on historical price movements after a trade (’782 Patent, col. 4:51-65). This could support an argument that the term requires a specific, calculated indicator of profitability, not just a generalized user classification.

  • The Term: "said offer being only made to said trading entity associated with said identifier" (’782 Patent, Claim 1)

    • Context and Importance: This limitation defines the conditional and targeted nature of the offer, distinguishing it from a general offer broadcast to an entire market. Practitioners may focus on this term because infringement will depend on whether the accused system technically restricts offer visibility or acceptance to a single targeted entity.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: A party could argue this is met if an offer is logically directed to a specific entity, even if it traverses a network where it is technically visible to other components before being matched by the exchange.
      • Evidence for a Narrower Interpretation: The patent states that "the offer may only be accepted by the trading entity associated with the identifier," suggesting a functional restriction on who can act on the offer (’782 Patent, col. 2:41-44). This could support a construction requiring an architectural or logical barrier preventing anyone other than the targeted entity from accepting the offer.

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 its products in an infringing manner (Compl. ¶14). The complaint references an unprovided Exhibit 2 for further details on these allegations (Compl. ¶14).
  • Willful Infringement: The allegation of willfulness is based on post-suit conduct. The complaint asserts that the service of the complaint itself "constitutes actual knowledge of infringement" and that any subsequent infringement by the Defendant is therefore willful (Compl. ¶13). No allegations of pre-suit knowledge are made.

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

  • A core issue will be one of evidentiary sufficiency: The complaint is devoid of specific factual allegations linking an identified product to the patent claims. The case will therefore depend entirely on whether discovery uncovers evidence that Defendant’s systems in fact perform the highly specific method of profiling traders based on profitability and generating exclusive, conditional offers as claimed.
  • A key legal question will be one of claim scope: The case may turn on the construction of the phrase "profile...that indicates whether said...transactions...would generate a profit." A central dispute will likely be whether this requires a specific, calculated metric of profitability as detailed in the patent’s embodiments, or if it can be read more broadly to cover common risk-scoring and client-categorization functionalities used in modern financial platforms.