Intercurrency Software LLC v. MEK Global Ltd

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Intercurrency Software LLC (Texas)
  • Defendant: MEK Global Limited (Seychelles) and PhoenixFin Pte Ltd. (Singapore)
  • Plaintiff’s Counsel: Garteiser Honea, PLLC
• Case Identification: 2:23-cv-00394, E.D. Tex., 08/31/2023
• Venue Allegations: Venue is alleged to be proper because Defendants are not U.S. residents and are subject to personal jurisdiction in the district due to their business activities and alleged acts of infringement within the State of Texas.
• Core Dispute: Plaintiff alleges that Defendants’ KuCoin cryptocurrency trading platform infringes three patents related to systems and methods for conducting financial transactions in a user's preferred currency.
• Technical Context: The technology at issue involves financial trading platforms that integrate real-time currency conversion, allowing users to view prices and settle transactions in a preferred local currency, even when the underlying asset is traded in a different market currency.
• Key Procedural History: The complaint alleges the patents-in-suit overcame prior art during prosecution, including patents assigned to Bank of America, and that the patent examiners considered the relevant technical fields. All three patents-in-suit share a common priority application.

Case Timeline

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

U.S. Patent 10,062,107 - "Consolidated Trading Platform" (Issued Aug. 28, 2018)

The Invention Explained

• Problem Addressed: The patent describes a problem in prior art financial systems where investors trading foreign assets had to perform currency conversions separately from the asset transaction itself (e.g., converting a bulk amount of local currency to U.S. dollars before trading U.S. stocks) (’107 Patent, col. 1:38-55). This created uncertainty, as the investor had "no certain knowledge of what profit or loss he was going to get" due to exchange rate fluctuations that could occur between the time of the trade and the time of currency conversion (’107 Patent, col. 1:55-60).
• The Patented Solution: The invention claims to solve this by providing a "consolidated trading platform" with a "three-tier architecture" comprising a brokerage, a market exchange, and a currency exchange (’107 Patent, col. 2:24-33). This integrated system presents all prices and settles all transactions in a user's "preferred currency," performing the currency conversion at the transactional level so "a trader always knows exactly what he/she may end up with" (’107 Patent, col. 2:33-36).
• Technical Importance: This approach aimed to remove the risk and complexity of manual, multi-step currency conversions from international asset trading by integrating the process directly into the trading platform's workflow (’107 Patent, col. 1:61-col. 2:3).

Key Claims at a Glance

• The complaint asserts independent claim 1 (Compl. ¶39).
• Essential elements of independent claim 1 include:
  • Providing a trading server coupled to currency exchange and market exchange servers.
  • Receiving an indicator of a "preferred currency" from a trader.
  • Displaying an asset in the preferred currency while it is traded in a market currency.
  • Conducting a transaction by transmitting a request to the market exchange server.
  • Receiving a settlement notification and executing the transaction using a "prevailing exchange rate" calculated "right before the transaction takes place" to prevent uncertainty.
  • Performing a currency conversion from the market currency to the preferred currency.

U.S. Patent 10,776,863 - "Method and Apparatus for Displaying Trading Assets in a Preferred Currency" (Issued Sep. 15, 2020)

The Invention Explained

• Problem Addressed: The patent addresses the same core problem as its parent '107 Patent: traders face uncertainty and risk when an asset is priced in a currency different from their home currency (’863 Patent, col. 1:50-55).
• The Patented Solution: The ’863 Patent describes a system that also displays assets in a preferred currency. It specifically claims a method where 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 constant, dynamic updating of the price in the user's preferred currency provides the trader with "certain knowledge of what to pay for the asset, or profit or loss" (’863 Patent, col. 10:13-16).
• Technical Importance: The invention focuses on providing price certainty to the user through a dynamic display that continuously reflects real-time exchange rate fluctuations, distinguishing it from systems that might use stale or periodically updated rates (’863 Patent, Abstract).

Key Claims at a Glance

• The complaint asserts independent claim 1 (Compl. ¶55).
• Essential elements of independent claim 1 include:
  • Coupling a trading server to currency and market exchange servers.
  • Receiving an indicator of a preferred currency.
  • Displaying the asset in the preferred currency, wherein the valuation is "updated constantly" based on the prevailing exchange rate.
  • Conducting a transaction of the asset.
  • Receiving a settlement notification and executing the transaction using a prevailing rate calculated "right before the transaction takes place."

U.S. Patent 11,449,930 - "Method and Apparatus for Trading Assets in Different Currencies" (Issued Sep. 20, 2022)

• Technology Synopsis: As a continuation of the application leading to the '863 patent, this patent refines the method for trading assets across different currencies (’930 Patent, Related U.S. Application Data). It describes a system that displays asset costs in a trader's preferred currency based on a first prevailing exchange rate, but then calculates and executes the final transaction using a second prevailing exchange rate determined immediately before the transaction occurs, acknowledging that the final settlement costs may not be identical to the initially displayed costs (’930 Patent, Claim 1).
• Asserted Claims: The complaint asserts independent claim 12 (Compl. ¶71).
• Accused Features: The complaint alleges that the KuCoin Platform's trading servers, which are allegedly coupled to currency and market exchange servers, infringe this patent (Compl. ¶71).

III. The Accused Instrumentality

• Product Identification: The "KuCoin Platform," which includes the kucoin.com website and its associated trading platforms and systems (Compl. ¶34).
• Functionality and Market Context: The KuCoin Platform is alleged to be a "consolidated trading platform" for cryptocurrencies (Compl. ¶34). The complaint alleges that the platform's trading servers are coupled to currency and market exchange servers (Compl. ¶39(i)). A screenshot of the KuCoin homepage highlights the platform's scale, including user and trading volume metrics (Compl. ¶34). Another screenshot of KuCoin's "Buy Crypto in One Click" interface shows a user selecting a fiat currency (USD) to spend for a cryptocurrency (USDT), which supports the allegation that users can transact in a currency of their choice (Compl. ¶39). The complaint highlights the platform's significant market presence, claiming it serves "29 Million Global Investors" (Compl. ¶34).

IV. Analysis of Infringement Allegations

’107 Patent Infringement Allegations

• Identified Points of Contention:
  • Scope Questions: A central issue may be whether the patent's terminology, developed in the context of traditional securities like stocks and bonds (’107 Patent, col. 1:26-35), can be construed to cover the digital assets and exchange mechanisms of a cryptocurrency platform. The court may need to determine if "security," "market currency," and "currency exchange server" read on cryptocurrencies and their associated infrastructure.
  • Technical Questions: The complaint alleges the accused system calculates the exchange rate "right before the transaction takes place," a key limitation for providing price certainty. A point of contention may be what evidence demonstrates that the KuCoin platform performs this specific just-in-time calculation, as opposed to using a periodically refreshed rate that is merely displayed to the user.

’863 Patent Infringement Allegations

The complaint does not provide sufficient detail for analysis of the infringement of U.S. Patent 10,776,863. The allegations are conclusory and do not map specific functionalities of the Accused Instrumentalities to the detailed elements of asserted claim 1, such as the requirement that the displayed asset valuation be "updated constantly" with the exchange rate "even when a market value of the asset remains unchanged" (Compl. ¶55; ’863 Patent, Claim 1).

• Identified Points of Contention:
  • Evidentiary Questions: A key factual question will be whether the KuCoin platform’s user interface performs the specific dynamic valuation required by claim 1, where the displayed price in the preferred currency changes in real-time with the exchange rate, independent of the asset's price movement in its market currency. The complaint does not present evidence, such as time-lapsed screenshots or video, to support this allegation.

V. Key Claim Terms for Construction

• The Term: "trading server" (’107 Patent, Claim 1)

• Context and Importance: This term defines the core component of the claimed invention. Its construction will be critical for determining whether the distributed, cloud-based architecture of a modern crypto platform falls within the scope of what the patent describes.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification describes the server as part of a "three-tier architecture" that can be implemented in a single computing machine or "distributed over many servers owned by different organizations," which may support a broad construction covering various modern server architectures (’107 Patent, col. 5:29-32).
  • Evidence for a Narrower Interpretation: The specification’s examples are rooted in the traditional financial brokerage context of the mid-2000s (e.g., "Scottrade"), which may support an argument that the term is implicitly limited to servers operating within that specific technological environment (’107 Patent, col. 5:2-4).

• The Term: "prevailing exchange rate... right before the transaction takes place" (’107 Patent, Claim 1)

• Context and Importance: This temporal limitation is central to the patent's asserted novelty of eliminating price uncertainty. The infringement analysis will depend heavily on whether the accused platform's use of an exchange rate meets this "just-in-time" requirement.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The patent does not define a specific time window for "right before," which could allow for an interpretation that includes any recently obtained rate that minimizes risk, rather than one calculated nanoseconds before execution.
  • Evidence for a Narrower Interpretation: The stated purpose is to "prevent uncertainty in currency exchanges in another time," which suggests the need for a rate that is locked-in for that specific transaction, as distinct from a general, periodically refreshed rate displayed for informational purposes (’107 Patent, col. 9:20-22).

VI. Other Allegations

• Indirect Infringement: The complaint alleges inducement of infringement for all three patents. These allegations are based on Defendants allegedly advertising and providing services for use in an infringing manner, thereby intending for others (e.g., end-users) to directly infringe (Compl. ¶¶44-47, 60-63, 76-79).
• Willful Infringement: Willfulness is alleged for all patents based on Defendants’ purported knowledge of the patents following the filing and service of the complaint (Compl. ¶¶43, 59, 75). The complaint also makes a general allegation that Defendants have a "practice of not performing a review of the patent rights of others" and are "willfully blind" to Plaintiff's patent rights (Compl. ¶¶48, 64, 80).

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

• A core issue will be one of definitional scope: can claim terms such as "security", "market currency", and "currency exchange", which are described in the patents’ specifications within the context of traditional financial markets, be construed to read on the digital assets, cryptocurrencies, and fiat-to-crypto conversion functions of the accused KuCoin platform?
• A key evidentiary question will be one of functional proof: what evidence exists to show that the accused platform performs the specific, time-sensitive technical functions required by the claims, such as calculating a prevailing exchange rate "right before the transaction takes place" (’107 Patent) or "constantly" updating a displayed price based on exchange rate fluctuations independent of asset price changes (’863 Patent)?
• The case may also examine the patent eligibility of the claims under 35 U.S.C. § 101, as financial process patents are often subject to such challenges. The complaint preemptively argues the claims are not abstract and contain inventive concepts that are not routine or conventional (Compl. ¶¶26-27).