Intercurrency Software LLC v. GBM Foundation Co Ltd

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Intercurrency Software LLC (Texas)
  • Defendant: GBM Foundation Company Ltd. (Cayman Islands)
  • Plaintiff’s Counsel: Garteiser Honea, PLLC
• Case Identification: 2:23-cv-00395, E.D. Tex., 08/31/2023
• Venue Allegations: Venue is asserted on the basis that Defendant is not a resident of the United States and may be sued in any judicial district, and that Defendant is subject to personal jurisdiction in the Eastern District of Texas through its business activities and alleged acts of infringement within the district.
• Core Dispute: Plaintiff alleges that Defendant’s BitMart 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 consolidated financial trading platforms that integrate real-time currency conversion, a feature aimed at simplifying cross-border trading and eliminating currency fluctuation risk for investors in globalized markets.
• Key Procedural History: The patents-in-suit share a common priority date and specification, forming a patent family. The complaint notes that the patents overcame prior art in fields related to financial data processing during prosecution and have been cited in patents issued to Bank of America, but does not mention any prior litigation or administrative challenges involving the patents.

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 describes a problem in prior art financial systems where investors trading foreign assets had to use the asset's native market currency (e.g., U.S. dollars for U.S. stocks) ( Compl. ¶16; ’107 Patent, col. 1:38-45). This required separate, bulk currency conversions before and after trading, creating uncertainty about the final profit or loss because the exchange rate could "fluctuate significantly" between the time of the trade and the time of the conversion (’107 Patent, col. 1:55-60). The patent asserts that this meant currency conversion was not performed "at a transactional level" (Compl. ¶17; ’107 Patent, col. 1:61-63).
• The Patented Solution: The invention describes a "consolidated trading platform" based on a "three-tier architecture" that includes a brokerage, a market exchange, and a currency exchange (Compl. ¶19; ’107 Patent, col. 2:24-29). This integrated system allows a trader to view prices and conduct transactions in their "preferred currency." It achieves this by obtaining prevailing exchange rates and presenting all costs and transaction results in the user's chosen currency, thereby giving the trader precise knowledge of the transaction's value at the time of execution (’107 Patent, Abstract; col. 2:30-34).
• Technical Importance: This approach seeks to eliminate the risk and uncertainty of currency fluctuations at the individual transaction level, making cross-border asset trading more transparent and predictable for investors (Compl. ¶20; ’107 Patent, col. 2:31-34).

Key Claims at a Glance

• The complaint asserts independent claim 1 (Compl. ¶36).
• The essential elements of claim 1 include:
  • Providing a trading server coupled to currency and market exchange servers.
  • Receiving an indicator of a "preferred currency" from a trader.
  • Causing a client computer to display an asset's price and associated costs in the preferred currency, with costs dynamically changing based on a constantly updated "prevailing exchange rate."
  • Conducting a transaction of the asset by transmitting a request to the market exchange server.
  • Receiving a settlement notification, wherein the trading server is configured to calculate the prevailing exchange rate "right before the transaction takes place."
  • Performing a currency conversion for the transaction using the calculated prevailing rate.
• The complaint states that the patents include "numerous claims defining distinct inventions," suggesting a reservation of the right to assert other claims, including dependent claims (Compl. ¶14).

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: The '863 Patent, a continuation of the application leading to the ’107 Patent, addresses the same core problem: traders lacking "certain knowledge of what profit or loss" they would realize from a transaction due to the need for separate currency conversions at fluctuating rates (’863 Patent, col. 1:55-63).
• The Patented Solution: The solution is also a consolidated trading platform that displays asset information in a user's preferred currency (’863 Patent, col. 2:15-20). This patent particularly emphasizes that the "valuation of the asset in the preferred currency changes in accordance with the prevailing exchange rate updated constantly even when a market value of the asset remains unchanged," ensuring the trader always sees an accurate, real-time value in their own currency (’863 Patent, col. 11:59-65). The system is based on the same three-tier architecture of a brokerage, asset exchange, and currency exchange (’863 Patent, Fig. 2B).
• Technical Importance: The invention provides a continuous, real-time valuation of foreign assets in an investor's local currency, which may enhance a trader's ability to make informed decisions without performing manual conversions or bearing transactional currency risk (’863 Patent, col. 2:31-34).

Key Claims at a Glance

• The complaint asserts independent claim 1 (Compl. ¶52).
• The essential elements of claim 1 include:
  • Coupling a trading server to currency and market exchange servers.
  • Receiving an indicator of a preferred currency.
  • Causing a client computer to display the asset in the preferred currency, where the asset's valuation changes with the exchange rate even if the market value is stable.
  • Conducting a transaction of the asset.
  • Receiving a settlement notification, where the server is configured to calculate the prevailing exchange rate right before the transaction.
• The complaint suggests the right to assert other claims is reserved (Compl. ¶14).

U.S. Patent No. 11,449,930 - "Method and Apparatus for Trading Assets in Different Currencies" (issued Sep. 20, 2022)

Multi-Patent Capsule

• Technology Synopsis: As a continuation in the same family, the ’930 Patent describes a method for trading assets across different currencies, addressing the same problem of currency risk (’930 Patent, col. 1:55-63). Its claims focus on a system where a trading server calculates and displays "costs and fees" for owning or selling an asset in a user's preferred "first currency," while the asset itself is traded in a "second currency." These displayed costs are dynamically changed in accordance with a prevailing exchange rate, providing the user with real-time, accurate transaction cost information (’930 Patent, claim 1).
• Asserted Claims: The complaint asserts independent claim 12 (Compl. ¶68).
• Accused Features: The infringement allegations target the BitMart platform's underlying architecture, specifically its use of a trading server connected to one or more currency exchange servers and one or more market exchange servers to facilitate cryptocurrency trades (Compl. ¶68).

III. The Accused Instrumentality

Product Identification

The accused instrumentality is the "BitMart Platform," which the complaint also links to "kucoin.com trading platforms and systems" (Compl. ¶31).

Functionality and Market Context

The complaint alleges the BitMart Platform is a cryptocurrency trading platform that allows users to buy, trade, and hold over 1,500 types of crypto assets (Compl. ¶3; p. 8, screenshot). A screenshot provided in the complaint depicts a user interface for purchasing Bitcoin (BTC) using U.S. Dollars (USD) through third-party "service providers" such as BANXA and MoonPay (Compl. p. 9, screenshot). This functionality allegedly involves a trading server coupled with currency and market exchange servers, which facilitates transactions and generates "substantial financial revenues" for the Defendant (Compl. ¶35, ¶36(i)).

IV. Analysis of Infringement Allegations

’107 Patent Infringement Allegations

Identified Points of Contention

• Scope Questions: A central question may be whether the term "asset" as used in the patent, which was filed in 2007 with examples like "stocks, bonds, options, commodities" (’107 Patent, col. 2:20-24), can be construed to read on cryptocurrencies. A court may need to determine if a person of ordinary skill in the art at the time of the invention would have understood "asset" or "commodity" to include decentralized digital currencies.
• Technical Questions: The complaint alleges that Defendant's "trading server" performs the key functions of calculating exchange rates and performing conversions (Compl. ¶36(v)). However, a provided screenshot shows that the BitMart platform integrates third-party "service providers" like BANXA to facilitate fiat-to-crypto transactions (Compl. p. 9). This raises the evidentiary question of whether the claimed functions are performed by Defendant’s server, as required by the claim, or are offloaded to these third-party services, which could impact the direct infringement analysis.

’863 Patent Infringement Allegations

The complaint alleges infringement of claim 1 of the ’863 Patent but does not provide a detailed, element-by-element mapping of the accused product's features to the claim limitations in the manner provided for the ’107 Patent (Compl. ¶52-53). The allegations are more general, stating that Defendant "practices and provides a trading server" with the requisite couplings to other servers (Compl. ¶52). The complaint does not provide sufficient detail for analysis of how the accused platform is alleged to meet each specific limitation of claim 1 of the ’863 Patent, such as the requirement that the asset's valuation dynamically changes with the exchange rate even when its market value is stable.

V. Key Claim Terms for Construction

"trading server"

• Context and Importance: This term appears in the preamble and body of the asserted independent claims and is assigned the central role in performing the claimed methods. The viability of the direct infringement theory depends on whether Defendant's "BitMart Platform" servers meet the definition of the "trading server" that itself performs functions like calculating exchange rates and conducting transactions. Practitioners may focus on this term because the evidence presented suggests a possible distinction between Defendant's platform and the third-party services that execute the currency conversion (Compl. p. 9).
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification describes a "three-tier architecture" where a brokerage coordinates with market and currency exchanges (’107 Patent, col. 2:24-29). This could support an interpretation where the "trading server" is the central coordinating entity, even if it relies on external components for specific functions.
  • Evidence for a Narrower Interpretation: Claim 1 of the ’107 Patent requires "the trading server is configured to calculate the prevailing exchange rate" (’107 Patent, col. 9:15-17). This language could support a narrower construction requiring the server itself to perform the calculation, not merely pass the task to a third-party service.

"asset"

• Context and Importance: The applicability of the patents to the accused cryptocurrency platform hinges on the scope of this term. The asserted claims are directed to transactions of an "asset."
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification provides a broad, non-limiting list of examples, including "stocks, bonds, options, commodities (e.g., oil, gold), futures/derivatives contracts, funds, index funds, mutual funds, exchange traded funds" (’107 Patent, col. 2:20-24). Plaintiff may argue that cryptocurrencies are a form of "commodity" or fall under the general category of "asset."
  • Evidence for a Narrower Interpretation: A defendant may argue that the patent's entire context, with its references to traditional financial institutions like Charles Schwab and exchanges like NASDAQ, limits the scope of "asset" to instruments within centralized financial systems (’107 Patent, col. 1:27-35). It could be argued that a person of ordinary skill in the art in 2007 would not have contemplated decentralized digital currencies within this definition.

VI. Other Allegations

• Indirect Infringement: The complaint alleges inducement to infringe, stating that Defendant provides the BitMart platform and advertises its use, which allegedly instructs or encourages users to perform the infringing methods (Compl. ¶41, ¶44).
• Willful Infringement: The complaint makes allegations supporting both pre- and post-suit willfulness. It asserts that infringement will become willful upon Defendant receiving notice of the patents via the complaint (Compl. ¶40). It separately alleges that Defendant "has been willfully blind to the patent rights of Plaintiff" by having a practice of not reviewing the patent rights of others before launching products (Compl. ¶45).

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

• A core issue will be one of definitional scope: can the term "asset," as defined and contextualized within a 2007 patent focused on traditional securities markets, be construed to cover modern, decentralized cryptocurrencies? The outcome of this claim construction dispute could be dispositive.
• A key evidentiary question will be one of locus of infringement: does the accused "trading server" operated by Defendant itself perform the critical claimed functions, particularly the calculation of exchange rates and execution of currency conversions, or does it primarily serve as a portal that offloads these functions to integrated third-party payment processors?
• A potential procedural question concerns pleading sufficiency: a court may need to assess whether the infringement allegations for the ’863 and ’930 patents, which are less detailed than those for the ’107 patent, provide sufficient factual matter to state a plausible claim for relief under prevailing federal standards.