NovaSparks SA v. Enyxfpga Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: NovaSparks SA (France)
  • Defendant: EnyxFPGA, Inc. (Delaware) and Enyx SA (France)
  • Plaintiff’s Counsel: Foley Hoag LLP
• Case Identification: 1:17-cv-07745, S.D.N.Y., 10/10/2017
• Venue Allegations: Venue is asserted based on Defendant EnyxFPGA, Inc.'s principal place of business in New York, allegations that Enyx transacts business in New York, and that claims arise from that activity.
• Core Dispute: Plaintiff alleges that its former employees misappropriated trade secrets to form Defendant Enyx, which then improperly filed patent applications and obtained a patent on technology developed at and owned by Plaintiff, and seeks correction of inventorship and a declaration of ownership for the resulting patent.
• Technical Context: The technology concerns hardware-accelerated processing of financial market data using Field-Programmable Gate Arrays (FPGAs) to achieve the ultra-low latency critical for high-frequency trading applications.
• Key Procedural History: The complaint alleges that the parties entered a settlement agreement in January 2013, following an "infringement-seizure" at Enyx's premises, under which Enyx agreed not to file patent applications on technology possessed by NovaSparks before March 2011. The current lawsuit stems from Enyx's alleged violation of that agreement by filing the patent applications at issue.

Case Timeline

Date	Event
2009-01-01	Mr. Kodde joins NovaSparks and signs IP assignment agreement
2009-07-15	Mr. Kodde enters employment contract with NovaSparks
2011-04-19	Mr. Kodde leaves NovaSparks and forms Enyx
2013-01-09	NovaSparks and Enyx enter into a settlement agreement
2013-10-01	'702 Patent Priority Date (European Application Filing)
2014-09-30	Enyx files the U.S. Patent Application for the '702 Patent
2017-01-03	U.S. Patent No. 9,535,702 Issues
2017-10-10	Complaint Filed

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

U.S. Patent No. 9,535,702 - "Asset management device and method in a hardware platform"

The Invention Explained

• Problem Addressed: The patent describes the growing need for faster processing of large volumes of financial data, noting that traditional software-based systems using CPUs struggle with the latency and performance demands of high-frequency trading ('702 Patent, col. 1:20-34). Specifically, software-based hash tables, used to manage and retrieve financial order data, suffer from poor performance due to random memory access patterns and CPU cache misses ('702 Patent, col. 4:19-28).
• The Patented Solution: The invention is an asset management device and method implemented on a hardware platform, specifically an FPGA, to accelerate financial data processing ('702 Patent, col. 2:6-9). The system uses a pipelined architecture with distinct hardware cores for different tasks, such as generating memory addresses via a hash function, allocating new entries, and executing commands ('702 Patent, Fig. 3; col. 5:45-51). It separates the storage of "keys" (e.g., order IDs) and "data" (e.g., price, quantity) into different memories, which allows for parallel processing and efficient memory bandwidth usage to find, add, or modify order data with very low latency ('702 Patent, col. 6:26-44).
• Technical Importance: This hardware-based approach provides a solution for processing market data "one to two orders of magnitude faster than what is achievable with traditional software-based solutions," which is critical for maintaining a competitive edge in financial and investment industries (Compl. ¶14).

Key Claims at a Glance

• The complaint alleges ownership of U.S. Patent No. 9,535,702, which contains independent claims 1 (method) and 10 (device) (Compl. ¶39).
• Independent Claim 1 recites the core elements of the method:
  • An asset management method implemented on an integrated circuit having a keys memory and a data memory.
  • Receiving an input command for an asset.
  • Computing a first address to the keys memory by "calculating a hash" from the asset identifier.
  • Searching for and, if not found, allocating an entry in the keys memory based on that address.
  • Computing a data address to the data memory based on the location of the entry in the keys memory.
  • Reading data from the data memory and executing the command.
  • Writing the result back to the keys and data memories.
• The complaint does not specify dependent claims but seeks ownership of the patent and its underlying applications in their entirety (Compl. ¶39).

III. The Accused Instrumentality

Product Identification

The core dispute concerns the ownership of the technology described and claimed in U.S. Patent Application Ser. Nos. 14/502,243 (which issued as the ’702 Patent), 14/502,523, and 14/502,963 (Compl. ¶3). The "accused instrumentality" is primarily the act of filing these patent applications and obtaining the ’702 Patent on an invention Plaintiff claims to own (Compl. ¶39, ¶40).

Functionality and Market Context

The complaint alleges that the technology disclosed in the ’702 Patent is based on Plaintiff's trade secrets and work performed by its employees prior to March 2011 (Compl. ¶27-28). It further alleges that Defendant Enyx has deployed products embodying this trade secret technology to clients in and around New York and New Jersey, competing directly with Plaintiff's offerings (Compl. ¶21, ¶30). The technology enables "ultra-low deterministic latency Market Data solutions" for feed handling and trading algorithms, a key performance metric in the financial technology sector (Compl. ¶16).

No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

This section is not applicable, as the complaint does not allege patent infringement but rather disputes inventorship and ownership of the ’702 Patent.

V. Key Claim Terms for Construction

While this is not an infringement case, the construction of key terms is relevant to defining the scope of the technology whose ownership is contested.

• The Term: "calculating a hash" (Claim 1)

• Context and Importance: The method of calculating the hash is central to the invention's performance. The complaint alleges the patented invention was conceived by NovaSparks's CTO (Compl. ¶33). The specific hash calculation method described in the patent—a "multiplicative hash" using an FPGA hardware multiplier—may become a focal point for determining whether the conception of this specific implementation occurred at NovaSparks or was a novel contribution by the named inventor. Practitioners may focus on this term to delineate the precise technical contribution at issue.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The claim language itself is broad, not specifying the type of hash. This could support an argument that any method of calculating a hash to generate a memory address is covered, potentially aligning with general concepts discussed at NovaSparks.
  • Evidence for a Narrower Interpretation: The specification provides a specific embodiment, describing a "multiplicative hash" generated "by using an FPGA hardware multiplier" and selecting the "middle bits" of the result to maximize variance ('702 Patent, col. 7:43-56; Fig. 4). This detailed description could be used to argue that the "invention" is this specific, efficient hardware implementation, not just the general idea of using a hash.

• The Term: "integrated circuit" (Claim 1)

• Context and Importance: The dispute centers on FPGA-based technology. The patent claims are directed to an "integrated circuit." The breadth of this term could be relevant to the scope of the prior settlement agreement, which forbade patenting technology "NovaSparks possessed before March 2011" (Compl. ¶24). Defining whether the "integrated circuit" of the claims is limited to the specific FPGA architecture described could be important.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: "Integrated circuit" is a generic term. The claims are not explicitly limited to FPGAs, which could support a view that the invention covers any hardware implementation of the method.
  • Evidence for a Narrower Interpretation: The entire detailed description is framed around FPGAs, which are described as "particularly suited for executing complex computation very fast" and form the basis of the patented solution ('702 Patent, col. 1:40-53). A party could argue that the invention is inseparable from the FPGA context in which it is described.

VI. Other Allegations

• Correction of Inventorship and Ownership: The complaint's primary counts seek a declaratory judgment to correct inventorship and establish ownership of the ’702 Patent and related applications. The claim for inventorship correction is based on the allegation that NovaSparks's CTO, Marc Battyani, conceived of the inventions and directed the named inventor, Mr. Kodde, to create the software code embodying them (Compl. ¶33). The ownership claim is based on allegations that Mr. Kodde was under a contractual obligation to assign all inventions to NovaSparks pursuant to an internship and employment agreement (Compl. ¶17, ¶37).
• Trade Secret Misappropriation and Willfulness: The complaint alleges that the subject matter of the ’702 Patent constitutes a trade secret owned by NovaSparks (Compl. ¶28). The basis for misappropriation is the allegation that Mr. Kodde disclosed these trade secrets to Enyx in violation of his confidentiality obligations (Compl. ¶47) and that Enyx knew or should have known the information was obtained improperly (Compl. ¶48). Willfulness is alleged based on Enyx's filing of patent applications in purported violation of a prior settlement agreement (Compl. ¶24-25) and with alleged knowledge that NovaSparks was the rightful owner of the technology (Compl. ¶40). The complaint alleges this conduct was "intentionally, willfully and maliciously" undertaken (Compl. ¶53, ¶65).

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

This case is not a standard patent infringement dispute; it is a battle over the ownership and inventorship of intellectual property. The outcome will likely depend on the resolution of the following questions:

• A primary issue will be one of evidentiary proof of conception: Can NovaSparks provide sufficient corroborating evidence to prove that its CTO, Mr. Battyani, conceived of the specific invention claimed in the ’702 Patent, and did so prior to Mr. Kodde's departure? The court will need to distinguish between contributing to the general project and conceiving the specific elements recited in the patent claims.
• A second core issue is one of contractual interpretation and timing: Do the employment and settlement agreements unambiguously transfer ownership of the specific patented invention to NovaSparks? This will involve determining precisely when the claimed invention was "developed" or "conceived" relative to the effective dates of those agreements, particularly the "before March 2011" cutoff in the settlement agreement.
• Finally, a key question for the trade secret claims will be one of public disclosure vs. misappropriation: Did Enyx’s filing of patent applications, which made the technology public, constitute misappropriation of a protected trade secret? This will turn on whether the technology was indeed a trade secret at the time of filing and whether Enyx acquired it through improper means, as alleged.