Cedar Lane Tech Inc v. Safra Securities LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Cedar Lane Technologies Inc. (Canada)
  • Defendant: Safra Securities LLC (Delaware)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 1:25-cv-09533, S.D.N.Y., 11/14/2025
• Venue Allegations: Venue is alleged to be proper in the Southern District of New York because the defendant maintains an established place of business in the district and has allegedly committed acts of infringement there.
• Core Dispute: Plaintiff alleges that Defendant’s electronic trading systems infringe a patent related to generating conditional, semi-anonymous trade offers based on a counterparty's historical trading data.
• Technical Context: The technology addresses risk management in anonymous electronic securities markets by allowing market makers to create tailored pricing for specific traders based on their past performance profiles.
• Key Procedural History: The complaint does not reference any prior litigation, inter partes review 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: The patent describes a problem in modern electronic trading systems where the increasing anonymity of participants prevents parties from setting prices based on knowledge of their counterparties (’782 Patent, col. 1:5-15). This is particularly risky for liquidity providers when dealing with "toxic traders," who may possess special knowledge about a stock's future direction, leading to losses for the provider (’782 Patent, col. 6:32-46).
• The Patented Solution: The invention discloses a method and system where a trading entity, or "taker," is associated with a persistent but semi-anonymous identifier (’782 Patent, Abstract). A liquidity provider acquires the trading history associated with this identifier, generates a profile analyzing that history (e.g., for profitability), and then generates a conditional trade offer tailored specifically for that identified taker (’782 Patent, Abstract; Fig. 1). This allows the provider to adjust its pricing based on the perceived risk of a particular counterparty without knowing their actual institutional or personal identity (’782 Patent, col. 2:56-63).
• Technical Importance: The described technology aims to reintroduce counterparty risk analysis into otherwise anonymous electronic trading environments, enabling more dynamic and informed pricing that could increase overall trading volume (’782 Patent, col. 3:19-24).

Key Claims at a Glance

• The complaint states it is asserting "one or more claims" and references "exemplary claims" in an exhibit not attached to the pleading (Compl. ¶11). Independent claim 1 is representative of the core invention and its elements include:
  • 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; and
  • 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, but refers generally to infringement of "one or more claims of the '782 Patent" (Compl. ¶11).

III. The Accused Instrumentality

Product Identification

The complaint refers generically to "Exemplary Defendant Products" without naming any specific product, system, or service offered by Safra Securities LLC (Compl. ¶11).

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 "Exemplary Defendant Products practice the technology claimed by the '782 Patent" (Compl. ¶16). No description of how the accused products operate, their features, or their market positioning is provided in the pleading.

IV. Analysis of Infringement Allegations

The complaint incorporates by reference "charts comparing the Exemplary '782 Patent Claims to the Exemplary Defendant Products" contained in an Exhibit 2 (Compl. ¶¶16-17). As Exhibit 2 was not provided, a claim chart summary cannot be constructed.

The complaint’s narrative theory of infringement is that the Defendant’s unnamed products "satisfy all elements of the Exemplary '782 Patent Claims" (Compl. ¶16). The allegations cover direct infringement through Defendant’s making, using, and selling of the products, as well as through its own internal testing (Compl. ¶¶11-12).

No probative visual evidence provided in complaint.

• Identified Points of Contention:
  • Scope Questions: A potential dispute may arise over the meaning of an offer being "only made to said trading entity." The litigation could explore whether this requires a private, point-to-point communication or if it can be read on a publicly broadcast offer that is technologically restricted to be acceptable only by the targeted entity.
  • Technical Questions: A key factual question will be what evidence demonstrates that the accused systems generate a "profile containing information that indicates whether said trading transactions... would generate a profit." This raises the question of whether the Defendant's systems perform an explicit profitability calculation for counterparties, as the claim requires, or if they use a different metric (such as a general risk score) that Plaintiff may argue is equivalent.

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, col. 11:1-3).

  • Context and Importance: This term is central to the invention's mechanism for differentiating between traders. Its construction will determine whether the claim requires a specific, backward-looking profit calculation or if it can cover a broader range of predictive analytics about a trader's behavior.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification describes "trading history" as "any relevant information relating to the trader" (’782 Patent, col. 2:66-67), which may support an interpretation where any analytical output derived from that history qualifies as the claimed "profile."
    • Evidence for a Narrower Interpretation: The detailed description provides a specific example where the profile analyzer creates a variable named "ACTPROF which was equal to the actual profit which the Liquidity Provider earned from past cases" (’782 Patent, col. 5:1-4). This embodiment could be used to argue for a narrower construction limited to a direct profit-and-loss calculation.

• The Term: "said offer being only made to said trading entity" (’782 Patent, col. 11:4-5).

  • Context and Importance: This limitation defines the exclusivity and targeted nature of the conditional offer. The dispute will likely focus on the technical implementation of "only made to" within a trading exchange environment.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification notes that "the offer may only be accepted by the trading entity associated with the identifier" (’782 Patent, col. 2:42-44), which suggests the possibility that the offer could be broadcast but only actionable by the target, thus supporting a broader functional definition.
    • Evidence for a Narrower Interpretation: The abstract states the offer is "only made to the trading entity," and the summary describes the offer as being "only directed to the taker" (’782 Patent, Abstract; col. 2:30-31). This language may support a narrower construction requiring a private, non-public offer transmission.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement, asserting that the Defendant sells the accused products to customers and provides "product literature and website materials" that instruct them to use the products in a manner that infringes the ’782 Patent (Compl. ¶¶14-15).
• Willful Infringement: The complaint does not contain an explicit allegation of willful infringement. However, it alleges that service of the complaint provides Defendant with "actual knowledge of infringement" and that Defendant's continued infringement is despite this knowledge, which could form the basis for a future claim of post-suit willfulness (Compl. ¶¶13-14). No facts suggesting pre-suit knowledge are alleged.

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

• Evidentiary Challenge: A primary issue will be one of evidentiary access and proof. Given the typically proprietary and complex nature of financial trading platforms, a central question is whether the Plaintiff can obtain, through discovery, specific evidence detailing the internal operations of the accused systems to demonstrate that they actually create trader-specific profiles and generate exclusive offers as claimed.
• Definitional Scope: The case may turn on a question of claim construction and technical equivalence: can the claim limitation "profile... that indicates whether said... transactions... would generate a profit" be construed to cover modern risk or "toxicity" scores used in algorithmic trading, or is there a fundamental mismatch between the claimed method and the accused functionality?
• Pleading Sufficiency: An immediate procedural question is whether the complaint, which relies on an un-provided exhibit and lacks specific factual allegations about the accused products, meets the plausibility standard for pleading patent infringement under Federal Circuit precedent. This raises the question of whether the Plaintiff will need to amend its complaint to avoid a motion to dismiss.