DCT

1:26-cv-00294

Cedar Lane Technologies Inc v. Morgan Stanley

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Key Events
Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:26-cv-00294, S.D.N.Y., 01/13/2026
  • Venue Allegations: Plaintiff alleges venue is proper because Defendant maintains an established place of business in the Southern District of New York and has committed alleged acts of patent infringement within the district.
  • Core Dispute: Plaintiff alleges that Defendant's electronic trading systems infringe a patent related to generating conditional trade offers for semi-anonymous market participants based on their trading history.
  • Technical Context: The technology involves using unique identifiers to track traders' histories and create profiles, allowing liquidity providers to make targeted, risk-adjusted offers in otherwise anonymous electronic markets.
  • Key Procedural History: The complaint does not mention any prior litigation, administrative patent challenges, 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
2026-01-13 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.

The Invention Explained

  • Problem Addressed: The patent describes a problem in modern electronic trading systems where increased automation has led to anonymity between buyers and sellers, preventing parties from setting prices based on knowledge of who they are trading with (e.g., their trading history or sophistication) (’782 Patent, col. 1:8-15).
  • The Patented Solution: The invention proposes a "semi-anonymous" trading system where a trading entity, or "Taker," is associated with a persistent identifier. An exchange or "Liquidity Provider" can then acquire the Taker's trading history associated with that identifier to generate a "profile." Based on this profile, the Provider can generate conditional offers that are directed only to that specific Taker, allowing for customized pricing without revealing the Taker's actual identity to the broader market (’782 Patent, col. 2:56-63; Fig. 1).
  • Technical Importance: This approach allows market makers to price their risk more accurately by distinguishing between different types of traders (e.g., "naive" versus "toxic" traders) based on their past trading patterns, which could lead to better pricing and increased market liquidity (’782 Patent, col. 6:40-57).

Key Claims at a Glance

  • The complaint asserts infringement of one or more claims of the ’782 Patent, exemplified in an unattached exhibit (Compl. ¶11, ¶16). Independent claim 1 is representative:
    • 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 sell a trading item from a liquidity provider based on a profile generated from said trade history information;
    • wherein the profile contains information indicating whether the trading transactions 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 transactions for items having a bid/offer spread.
  • The complaint does not explicitly reserve the right to assert dependent claims but references infringement of "one or more claims" generally (Compl. ¶11).

III. The Accused Instrumentality

Product Identification

  • The complaint does not identify specific accused products by name, referring to them generally as "Exemplary Defendant Products" that are detailed in an exhibit not provided 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 alleges, through incorporation of an unattached exhibit, that these products practice the technology claimed by the ’782 Patent (Compl. ¶16).

IV. Analysis of Infringement Allegations

The complaint incorporates by reference an external claim chart exhibit (Exhibit 2) to detail its infringement allegations; this exhibit was not provided (Compl. ¶16, ¶17). Therefore, a detailed claim chart summary cannot be constructed from the complaint document itself. The following analysis is based on the general allegations and the language of the asserted patent.

No probative visual evidence provided in complaint.

  • Identified Points of Contention: Based on the patent’s claims and the nature of the allegations against a large financial institution, the infringement analysis may raise several key questions:
    • Scope Questions: Does a standard client account number, used by a brokerage for regulatory, accounting, and general risk management, constitute the claimed "identifier" for the specific purpose of generating a "profile" to create conditional offers?
    • Technical Questions: What evidence links Defendant's analysis of client trading history to the generation of specific, conditional offers that are "only made to said trading entity" as required by the claim, as distinct from general market-making activities where pricing is available to a wider audience?

V. Key Claim Terms for Construction

  • The Term: "profile"

    • Context and Importance: This term is central to the invention, as it is the data structure that links a trader's history to the generation of a conditional offer. The scope of "profile" will determine what type of data analysis and storage constitutes infringement. Practitioners may focus on this term because its construction will dictate whether routine client risk analysis falls within the claim scope.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The specification states that "trading history" used to create a profile "means 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).
      • Evidence for a Narrower Interpretation: The language of claim 1 itself requires the profile to contain "information that indicates whether said trading transactions associated with said trading entity would generate a profit" (’782 Patent, col. 11:1-3). The specification provides specific examples of calculated variables for this purpose, such as comparing execution prices to prices one minute later ("SIMPROF") or calculating the actual profit earned by the liquidity provider from that taker ("ACTPROF") (’782 Patent, col. 4:51-61; col. 5:2-10).

  • The Term: "offer being only made to said trading entity"

    • Context and Importance: This limitation defines the targeted and exclusive nature of the patented method, distinguishing it from general offers broadcast to the market. The dispute will likely center on how exclusive an offer must be to meet this requirement.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: This could be construed to mean an offer that is technologically addressable or matchable only to a specific identifier within a broader data feed, even if not sent via a physically separate channel.
      • Evidence for a Narrower Interpretation: The specification describes a "trade matching system" that uses "Taker identifiers... to select trade offers specific to taker profiles represented by the identifier" (’782 Patent, col. 6:42-45). This suggests a system where the matching logic itself enforces the exclusivity, preventing the offer from being accepted by any other party.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges inducement of infringement, stating on information and belief that Defendant distributes "product literature and website materials inducing end users and others to use its products in the customary and intended manner that infringes the ’782 Patent" (Compl. ¶14).
  • Willful Infringement: Willfulness allegations are based on knowledge acquired from the service of the complaint itself. The complaint alleges that "service of this Complaint, in conjunction with the attached claim charts... constitutes actual knowledge," and that Defendant's continued infringement thereafter is willful (Compl. ¶13-14).

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

  • A core issue will be one of definitional scope: does Defendant's use of client identifiers and analysis of trading history for broad, internal risk management constitute the creation of a specific "profile" for the purpose of generating conditional offers, as claimed in the patent?
  • A key evidentiary question will be establishing a causal and exclusive link: what proof demonstrates that specific offers from the Defendant are not just generally available but are generated "based on" a specific trader's profile and are technologically restricted so they are "only made to" that trader, as the claim language requires?