DCT

1:25-cv-09488

Cedar Lane Tech Inc v. Bank Of New York Mellon Corp

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Key Events
Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:25-cv-09488, S.D.N.Y., 11/13/2025
  • Venue Allegations: Plaintiff alleges venue is proper in the Southern District of New York because Defendant maintains an established place of business in the district.
  • Core Dispute: Plaintiff alleges that Defendant’s financial trading systems infringe a patent related to generating conditional trading offers for semi-anonymous participants based on their trading history.
  • Technical Context: The dispute is situated in the field of electronic trading systems, where anonymity between counterparties is common and creates challenges for customized or risk-adjusted pricing.
  • Key Procedural History: The complaint does not allege any prior litigation, licensing history, or other procedural events related to the patent-in-suit.

Case Timeline

Date Event
2010-04-08 ’782 Patent Application Filing Date
2013-11-05 ’782 Patent Issue Date
2025-11-13 Complaint Filing Date

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

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

The Invention Explained

  • Problem Addressed: In modern electronic trading systems, the trend toward automation has increased participant anonymity, meaning buyers and sellers often do not know the identity of the party on the other side of a transaction. This prevents market participants from setting prices based on knowledge of the counterparty, such as their trading history or behavior ('782 Patent, col. 1:8-15).
  • The Patented Solution: The invention describes a system where a trading entity ("taker") is associated with an identifier. A "liquidity provider" acquires the taker's trading history associated with that identifier and generates a "profile." Based on this profile, the provider can generate a conditional trade offer that is only made to the specific trading entity associated with that identifier, allowing for customized pricing without revealing the taker's actual identity ('782 Patent, Abstract; col. 3:26-4:32).
  • Technical Importance: This approach allows liquidity providers to price trades more efficiently by distinguishing between different types of traders (e.g., "naive" versus "toxic traders") in an otherwise anonymous market, thereby managing risk and potentially improving pricing for certain participants ('782 Patent, col. 6:32-57).

Key Claims at a Glance

  • The complaint asserts infringement of one or more "exemplary claims" without specifying claim numbers (Compl. ¶11). Independent claim 1 is representative of the asserted technology.
  • Independent Claim 1 (Method):
    • 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; and
    • 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;
    • wherein the offer is only made to the trading entity associated with the identifier and is processed through an exchange that processes transactions for items having a bid/offer spread.

III. The Accused Instrumentality

Product Identification

The complaint does not identify any specific accused products by name. It refers generally to "Defendant products identified in the charts incorporated into this Count below (among the 'Exemplary Defendant Products')" and an "Exhibit 2" that is not attached to the filed complaint (Compl. ¶¶ 11, 16).

Functionality and Market Context

The complaint does not provide sufficient detail for analysis of the accused instrumentality's functionality. It makes only a 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 directly infringes the ’782 Patent by "making, using, offering to sell, selling and/or importing" the accused products (Compl. ¶11). The pleading states that infringement allegations are detailed in "charts of Exhibit 2," which are incorporated by reference but were not filed with the complaint (Compl. ¶¶ 16, 17). As a result, a detailed analysis of the infringement theory based on the complaint is not possible.

No probative visual evidence provided in complaint.

V. Key Claim Terms for Construction

  • The Term: "a profile...containing information that indicates whether said trading transactions associated with said trading entity would generate a profit" (from Claim 1).
  • Context and Importance: The definition of this term is central to the dispute, as it defines the core analytical component of the invention. The infringement analysis will turn on whether Defendant's systems generate a "profile" that performs this specific predictive profitability analysis, or if they perform a more generic risk assessment that Plaintiff argues falls within the claim's scope.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification defines "trading history" broadly as "any relevant information relating to the trader, including information relating to the past trades of the trader, the identity of the trader, a classification of the trader, etc." (’782 Patent, col. 2:65-col. 3:2). This could support an interpretation where any profile using historical data to assess future trade outcomes meets the limitation.
    • Evidence for a Narrower Interpretation: The specification provides specific examples of how the profile analyzer determines profitability, such as by creating a variable ("SIMPROF") that compares execution prices to prices one minute later or a variable ("ACTPROF") that tracks the liquidity provider's actual profit from past transactions with the taker (’782 Patent, col. 4:50-col. 5:10). This language may support a narrower construction requiring a specific, quantitative analysis of future or past profitability based on defined metrics.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges induced infringement, stating that since the service of the complaint, Defendant has had knowledge of the ’782 Patent and has induced infringement by selling the accused products and distributing "product literature and website materials" that instruct end users on their use (Compl. ¶¶ 14, 15).
  • Willful Infringement: The complaint does not use the term "willful." However, it alleges that Defendant has "Actual Knowledge of Infringement" from the date of service of the complaint and continues its allegedly infringing activities despite this knowledge (Compl. ¶¶ 13, 14). These allegations may form the basis for a future claim of post-suit willful infringement.

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

  1. A primary issue will be one of definitional scope: How will the court construe the claim term "a profile...that indicates whether said trading transactions...would generate a profit"? The case may depend on whether this requires a specific, forward-looking profitability calculation as detailed in the patent's embodiments, or if it can encompass more general risk or behavior-based trader profiles.
  2. The central dispute will be one of factual correspondence: As the complaint lacks any detail on the accused systems, a key evidentiary question will be what Defendant’s trading systems actually do. Discovery will be necessary to determine whether these systems create trader-specific profiles based on identifiers and then use those profiles to generate conditional, non-public offers in the manner required by the asserted claims.