Intercurrency Software LLC v. Robinhood Crypto LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Intercurrency Software LLC (Texas)
  • Defendant: Robinhood Crypto, LLC (Delaware)
  • Plaintiff’s Counsel: Garteiser Honea, PLLC
• Case Identification: 2:23-cv-00360, E.D. Tex., 08/04/2023
• Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendant maintains a regular and established business presence in the District, including physical locations and employees, and generates substantial revenue from its activities there.
• Core Dispute: Plaintiff alleges that Defendant’s cryptocurrency trading platform infringes patents related to a consolidated financial trading system that displays asset prices and settles transactions in a user's preferred currency.
• Technical Context: The technology addresses the financial risk and uncertainty faced by international investors from currency exchange rate fluctuations by integrating real-time conversion into the trading process.
• Key Procedural History: The complaint notes that the patents-in-suit claim priority to 2007 and that the patent applications were examined by the USPTO in technology classifications relevant to financial and trading systems. No prior litigation or post-grant proceedings are mentioned in the complaint.

Case Timeline

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

U.S. Patent No. 10,062,107, “Consolidated Trading Platform” (Issued Aug. 28, 2018)

The Invention Explained

• Problem Addressed: The patent’s background section describes the problem for investors trading assets in a foreign currency, such as a Chinese investor trading U.S. stocks. Because the asset transaction and currency conversion are separate events, the investor has "no certain knowledge of what profit or loss he was going to get because the currency exchange rate" can fluctuate significantly between the time of the trade and the time of currency conversion (Compl. ¶14; ’107 Patent, col. 1:52-60).
• The Patented Solution: The invention proposes a "consolidated trading platform" that integrates a brokerage, a market exchange, and a currency exchange into a "three-tier architecture" (’107 Patent, col. 2:25-33). This system allows a trader to view prices and conduct transactions in a "preferred currency," with the platform performing the currency conversion at the transactional level, thereby providing the trader with exact knowledge of the transaction's value in their own currency at the moment of execution (Compl. ¶¶ 17-18; ’107 Patent, Abstract).
• Technical Importance: The technology sought to remove the cost and risk associated with post-transaction bulk currency conversions, which were a source of uncertainty for investors operating in international markets (’107 Patent, col. 1:61-65).

Key Claims at a Glance

• The complaint asserts independent Claim 1 as exemplary (Compl. ¶34).
• The essential elements of Claim 1 include:
  • Receiving an indicator of a preferred currency from a trader.
  • Causing a client computer to display an asset in the preferred currency while the asset is traded in a market currency, which involves determining a prevailing exchange rate and displaying all costs and fees in the preferred currency.
  • Conducting a transaction of the asset by transmitting a request to a market exchange server.
  • Receiving a settlement notification and executing the transaction with a calculated prevailing exchange rate obtained "right before the transaction takes place" to prevent uncertainty.
  • Performing a currency conversion of the transaction from the market currency to the preferred currency using the calculated rate.

U.S. Patent No. 10,776,863, “Method And Apparatus For Displaying Trading Assets In A Preferred Currency” (Issued Sep. 15, 2020)

The Invention Explained

• Problem Addressed: As a continuation of the application leading to the ’107 Patent, this patent addresses the same problem of uncertainty in international financial transactions caused by fluctuating exchange rates (’863 Patent, col. 1:50-60).
• The Patented Solution: The invention describes a method where a trading server, coupled to currency and market exchanges, displays an asset to a user in their preferred currency. A key aspect is that the displayed valuation of the asset "changes in accordance with the prevailing exchange rate updated constantly even when a market value of the asset remains unchanged" (’863 Patent, Claim 1). This provides a real-time, dynamic view of the asset's value in the user's local currency.
• Technical Importance: This approach gives a trader continuous visibility into the real value of a foreign asset in their home currency, accounting for both asset price and exchange rate volatility in a single, unified display (’863 Patent, col. 2:13-19).

Key Claims at a Glance

• The complaint asserts independent Claim 1 as exemplary (Compl. ¶50).
• The essential elements of Claim 1 include:
  • Coupling a trading server to currency and market exchange servers.
  • Receiving an indicator of a preferred currency from a trader.
  • Causing a client computer to display the asset in the preferred currency by determining a prevailing exchange rate.
  • The valuation of the asset in the preferred currency changes with the exchange rate even if the market value of the asset is unchanged.
  • Conducting a transaction and executing it with a calculated exchange rate to prevent uncertainty.

Multi-Patent Capsule: U.S. Patent No. 11,449,930

• Patent Identification: U.S. Patent No. 11,449,930, “Method and Apparatus for Trading Assets in Different Currencies,” issued September 20, 2022.
• Technology Synopsis: This patent, another continuation in the same family, describes a system for trading assets across different currencies. The method involves calculating and displaying costs and fees for an asset in a user's preferred (first) currency, even though the asset is traded in a market (second) currency, with values dynamically updated based on a first prevailing exchange rate (’930 Patent, Claim 1). A settlement is later reached using a second prevailing exchange rate calculated immediately before the transaction, ensuring the final costs are not identical to the initially displayed costs but are locked in at the time of execution (Compl. ¶66; ’930 Patent, Claim 1).
• Asserted Claims: The complaint asserts independent Claim 12 as exemplary (Compl. ¶66).
• Accused Features: The complaint alleges that Defendant’s cryptocurrency platform, through its use of trading servers coupled with currency and market exchange servers, infringes the ’930 Patent (Compl. ¶66).

III. The Accused Instrumentality

• Product Identification: The complaint identifies the "Accused Instrumentalities" as Defendant’s "cryptocurrency trading and exchange platforms and systems" (Compl. ¶29).
• Functionality and Market Context: The complaint alleges that the accused platform functions as a "consolidated trading platform" that allows users to buy and sell cryptocurrency (Compl. ¶¶ 29, 34). The complaint includes a screenshot from Defendant's website advertising the ability to "Buy & sell crypto with no commission fees" (Compl. ¶29). This screenshot shows a mobile interface displaying a price for Bitcoin, illustrating the platform's engagement in crypto trading (Compl. ¶29). The complaint asserts that Defendant "generates substantial financial revenues and benefits" from operating these services (Compl. ¶33).

IV. Analysis of Infringement Allegations

’107 Patent Infringement Allegations

The complaint alleges infringement of Claim 1 of the ’107 patent but does not provide a detailed, element-by-element infringement theory for this claim corresponding to the one provided for the ’107 patent. The infringement allegation for the ’863 patent is limited to the general assertion that Defendant provides a trading server coupled to currency and market exchange servers (Compl. ¶50). Therefore, a claim chart is not presented for the ’863 patent.

• Identified Points of Contention:
  • Scope Questions: The patents-in-suit, with a 2007 priority date, describe their invention in the context of traditional financial markets involving fiat currencies (e.g., USD, Yen) and securities (e.g., stocks, oil) (’107 Patent, col. 1:26-60). The accused instrumentality is a cryptocurrency platform. This raises the question of whether claim terms such as "currency", "market currency", and "currency exchange server" can be construed to read on decentralized digital assets (e.g., Bitcoin, Ethereum) and the exchanges where they are traded.
  • Technical Questions: Claim 1 of the ’107 Patent requires calculating a "prevailing exchange rate" from "one or more currency exchange servers" at a specific time—"right before the transaction takes place"—to prevent "uncertainty." What evidence the complaint provides that the accused Robinhood platform performs this specific, timed calculation based on data from distinct sources that function as "currency exchange servers," as opposed to using an integrated price feed, will be a central technical question. The marketing screenshot provided in the complaint promotes "no commission fees" but does not illuminate the underlying technical architecture or the specific timing of exchange rate calculations (Compl. ¶29).

V. Key Claim Terms for Construction

• The Term: "currency" (including "preferred currency" and "market currency")

  • Context and Importance: The applicability of the patents to the accused cryptocurrency platform may depend on the construction of this term. Practitioners may focus on this term because the patent's specification was written before the widespread emergence of cryptocurrencies, and its examples are limited to fiat currencies.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The patent does not explicitly limit the term to sovereign-issued money. The claims use the general term "asset" and describe it broadly to include "stocks, bonds, options, commodities," suggesting an intent to cover a wide array of tradable items (’107 Patent, col. 2:20-24). A party may argue that "currency" should be interpreted just as broadly to mean any medium of exchange.
    • Evidence for a Narrower Interpretation: The patent’s background and embodiments exclusively discuss traditional finance, citing examples like Charles Schwab, NASDAQ, US dollars, and Chinese RMB (’107 Patent, col. 1:26-44, 5:9-12). A party may argue that a person of ordinary skill in the art in 2007 would have understood "currency" in this context to refer only to fiat currencies.

• The Term: "currency exchange server"

  • Context and Importance: The patents describe a "three-tier architecture" that includes a distinct "currency exchange server" (’107 Patent, Fig. 2B). Whether the accused platform's architecture maps onto this claimed structure will be a key point of dispute.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification describes server 206, the currency exchange, as potentially being a "bank, an exchange agency, a multibank portal or a matching service," which suggests the term is not limited to a single type of entity or technical implementation (’107 Patent, col. 5:1-3).
    • Evidence for a Narrower Interpretation: Figure 2A depicts the "currency exchange server" (206), "brokerage" (208), and "market exchange" (210) as separate structural components connected via a network. A party may argue that this disclosure requires a physically or logically distinct server component dedicated to currency exchange, and that a more integrated or monolithic platform would not meet this limitation.

VI. Other Allegations

• Indirect Infringement: The complaint alleges inducement, stating that Defendant’s advertising and provision of the accused platform encourages and enables infringing use by its customers (Compl. ¶¶ 39, 42). The allegations point to Defendant's marketing activities as evidence of intent (Compl. ¶35).
• Willful Infringement: The complaint pleads willfulness based on both pre- and post-suit conduct. It alleges that Defendant will be on notice of the patents upon service of the complaint, making any subsequent infringement willful (Compl. ¶¶ 38, 54, 70). It also alleges pre-suit "willful blindness," asserting that Defendant has a practice of not reviewing third-party patent rights before launching its products and services (Compl. ¶¶ 43, 59, 75).

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

• A core issue will be one of definitional scope: can the term "currency," originating in a patent family with a 2007 priority date and described in the context of traditional finance and fiat money, be construed to encompass the decentralized cryptocurrencies traded on the accused platform?
• A key evidentiary question will be one of architectural equivalence: does the accused platform’s technical infrastructure function as the "three-tier architecture" claimed in the patents, which requires distinct "market exchange" and "currency exchange" servers, or is there a fundamental mismatch in its operational design that places it outside the scope of the claims?
• A third central question will concern the timing and source of data: can Plaintiff demonstrate that the accused system calculates a "prevailing exchange rate" from one or more distinct servers "right before the transaction takes place," as specifically required by certain claims to "prevent uncertainty," or does the system use a different method for pricing and executing trades?