Cedar Lane Tech Inc v. Clear Street LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Cedar Lane Technologies Inc. (Canada)
  • Defendant: Clear Street LLC (Delaware)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 1:25-cv-07846, S.D.N.Y., 09/22/2025
• Venue Allegations: Venue is alleged to be proper based on Defendant maintaining an established place of business within the Southern District of New York.
• Core Dispute: Plaintiff alleges that Defendant’s financial trading platforms and services infringe a patent related to generating conditional, customized trade offers for semi-anonymous market participants based on their historical trading data.
• Technical Context: The technology operates in the domain of electronic financial trading systems, addressing the challenge of pricing counterparty risk in markets where participants are largely anonymous.
• Key Procedural History: The complaint does not reference any prior litigation, inter partes review (IPR) 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 Issues
2025-09-22	Complaint Filed

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

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

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

The Invention Explained

• Problem Addressed: The patent’s background section notes that the trend toward automated, electronic trading systems has increased participant anonymity, preventing buyers and sellers from knowing the identity of the parties they are trading with ('782 Patent, col. 1:8-15). This anonymity prevents sophisticated parties like market makers ("Liquidity Providers") from pricing trades based on the historical behavior of a counterparty, exposing them to potential losses from informed or "toxic traders" ('782 Patent, col. 6:32-47).
• The Patented Solution: The invention proposes a system where a trading entity (a "taker") is associated with an identifier. This identifier allows a liquidity provider to acquire the taker's trade history, generate a profile based on that history (e.g., to assess profitability), and then generate a conditional offer that is tailored specifically for that identified taker ('782 Patent, Abstract). As depicted in Figure 1, the system allows a Liquidity Provider (12) to use a profile analyzer (24) to assess data from a trade history feed (22) and direct a customized offer via an offer generator (26) back to the exchange, enabling risk-adjusted pricing in a semi-anonymous environment ('782 Patent, Fig. 1; col. 4:26-50).
• Technical Importance: This approach allows for pricing mechanisms that account for counterparty risk—a feature of traditional face-to-face trading—to be implemented within the high-speed, anonymous framework of modern electronic exchanges ('782 Patent, col. 2:55-63).

Key Claims at a Glance

• The complaint does not specify which claims it asserts, referring generally to "one or more claims" and "Exemplary '782 Patent Claims" detailed in an external exhibit (Compl. ¶11, ¶16). Independent claim 1 is representative of the patent's core method.
• The essential elements of independent claim 1 include:
  • associating a trading entity with an identifier using a processor;
  • acquiring trade history information associated with that identifier;
  • receiving an offer from a liquidity provider that is based on a profile generated from that trade history;
  • the profile contains information indicating whether the trading entity's past transactions "would generate a profit";
  • the offer is "only made to said trading entity associated with said identifier"; and
  • the offer is processed through an exchange that handles transactions with a bid/offer spread.
• The complaint notes that Plaintiff may assert infringement of other claims, including by the doctrine of equivalents (Compl. ¶11).

III. The Accused Instrumentality

Product Identification

The complaint does not identify any accused products or services by name. It refers to them as "Exemplary Defendant Products" and states they are identified in charts incorporated into the pleading (Compl. ¶11). These charts, designated as Exhibit 2, were not attached to the publicly filed complaint.

Functionality and Market Context

The complaint does not provide sufficient detail for analysis of the accused instrumentality's functionality. It alleges in a conclusory manner that the accused products "practice the technology claimed by the '782 Patent" (Compl. ¶16), but offers no specific facts in the body of the complaint about how they operate. No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint states that detailed infringement allegations are contained within claim charts in Exhibit 2, which was not provided with the filed document (Compl. ¶16, ¶17). The complaint summarily alleges that the "Exemplary Defendant Products" satisfy all elements of the asserted claims (Compl. ¶16). Without access to Exhibit 2, a detailed analysis of the infringement theory is not possible.

Identified Points of Contention

Based on the language of the asserted patent and the general nature of the dispute, the infringement analysis may raise several technical and legal questions.

• Scope Questions: A potential issue is whether the accused system generates offers that are "only made to" a specific trading entity as required by the claim. The case may turn on whether the accused functionality involves truly exclusive, targeted offers or a more generalized, tier-based pricing system that applies to classes of users.
• Technical Questions: A key factual question will be what data the accused system uses to constitute "trade history information" and whether it generates a "profile" that performs the claimed function of indicating whether past transactions "would generate a profit." The complaint provides no facts on this point.

V. Key Claim Terms for Construction

"profile containing information that indicates whether said trading transactions associated with said trading entity would generate a profit" (from claim 1)

Context and Importance

This term is central to the invention's purported novelty, as it describes the analytical basis for generating a conditional offer. The dispute will likely focus on whether this requires a simple historical accounting of profitability or a more complex, predictive analysis.

Intrinsic Evidence for Interpretation

• Evidence for a Broader Interpretation: The specification describes embodiments where a "profile analyzer" calculates variables based on past performance, such as the difference between execution price and the price one minute later ("DIFF") or the actual profit earned by the provider from past trades ("ACTPROF") ('782 Patent, col. 4:50-col. 5:4). This may support a construction where a profile based on historical data is sufficient.
• Evidence for a Narrower Interpretation: The claim’s prospective language—"would generate a profit"—could be argued to require a forward-looking or predictive element. The patent's discussion of identifying "toxic traders" who possess "special knowledge about the direction of the price of a stock" may support a narrower construction requiring the profile to assess future risk, not just past performance ('782 Patent, col. 6:32-40).

"said offer being only made to said trading entity associated with said identifier" (from claim 1)

Context and Importance

This limitation defines the exclusivity of the conditional offer. Its construction will determine whether the offer must be communicated privately or can be part of a broader broadcast accessible only by the intended recipient.

Intrinsic Evidence for Interpretation

• Evidence for a Broader Interpretation: The specification suggests that offers may be "broadcast through a centralized exchange" where a "trade matching system" uses identifiers to match offers with the specific entities for which they are valid ('782 Patent, col. 3:30-38). This language may support a construction where an offer is considered "only made to" an entity if it is tagged with an identifier that makes it unacceptable by any other party, even if visible to others.
• Evidence for a Narrower Interpretation: The phrasing "only made to" could be interpreted to require a private, point-to-point communication channel where the offer is not broadcast. The abstract similarly states the "offer being only made to the trading entity associated with one of said identifiers," which could suggest a direct and exclusive transmission ('782 Patent, Abstract).

VI. Other Allegations

Indirect Infringement

The complaint alleges induced infringement "at least since being served by this Complaint" (Compl. ¶15). It further alleges that Defendant distributes "product literature and website materials" that direct end users to infringe, citing the missing Exhibit 2 for evidentiary support (Compl. ¶14).

Willful Infringement

While the complaint does not use the term "willful," it pleads that service of the complaint "constitutes actual knowledge of infringement" (Compl. ¶13). This allegation forms a basis for a claim of post-filing willfulness, which could support a request for enhanced damages.

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

• Evidentiary Sufficiency: A threshold issue may be whether the complaint, which outsources its core factual allegations for infringement to an unattached exhibit, meets the plausibility pleading standards. The court may need to determine if the complaint provides sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face.
• Definitional Scope: The case will likely turn on the construction of the claim phrase "profile containing information that indicates whether said trading transactions... would generate a profit." The core question is whether this requires a predictive analysis of a trader's future profitability or if a purely historical analysis of past performance is sufficient to meet the limitation.
• Functional Application: A central factual dispute will be whether the accused Clear Street platform generates offers that are "only made to" a specific trader based on their unique identifier, as the patent claims. The alternative may be that the platform uses a more generalized pricing model for categories of traders, raising the question of whether such a system falls within the scope of the patent's claims.