DCT
2:24-cv-00079
Intercurrency Software LLC v. State Street Bank Trust Co
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Intercurrency Software LLC (Texas)
- Defendant: Charles River Systems, Inc. (d/b/a Charles River Development), State Street Bank and Trust Company, and State Street Corporation (Massachusetts)
- Plaintiff’s Counsel: Garteiser Honea, PLLC
- Case Identification: 2:24-cv-00079, E.D. Tex., 04/29/2024
- Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendant maintains regular and established places of business in the district, including data servers and employees. The complaint supports this by referencing LinkedIn profiles of Defendant’s employees located in Plano and Frisco, Texas.
- Core Dispute: Plaintiff alleges that Defendant’s Charles River Investment Management Solution platform infringes three patents related to consolidated financial trading systems that provide real-time, transactional currency conversion.
- Technical Context: The technology addresses the complexities and risks of cross-border securities trading by integrating live currency exchange rates into a trading platform, allowing investors to view prices and execute transactions in a preferred local currency rather than the asset's market currency.
- Key Procedural History: The currently operative complaint is the First Amended Complaint. The complaint notes that the patents-in-suit overcame prior art during examination but does not mention any prior litigation or post-grant proceedings involving the patents.
Case Timeline
| Date | Event |
|---|---|
| 2007-04-18 | Priority Date for all Patents-in-Suit |
| 2018-08-28 | U.S. Patent 10,062,107 Issued |
| 2020-09-15 | U.S. Patent 10,776,863 Issued |
| 2022-09-20 | U.S. Patent 11,449,930 Issued |
| 2024-04-29 | First Amended Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent 10,062,107, "Consolidated Trading Platform," issued August 28, 2018
- The Invention Explained:
- Problem Addressed: The patent identifies a problem in prior art financial trading systems where investors trading assets in a foreign currency face uncertainty regarding their ultimate profit or loss. This is because currency conversion is not performed "at a transactional level," requiring separate conversions before and after a trade, during which time exchange rates can fluctuate significantly ( Compl. ¶25; ’107 Patent, col. 1:38-60).
- The Patented Solution: The invention proposes a consolidated "three-tier architecture" that couples a brokerage server with both a market exchange server and a currency exchange server. This integrated system allows a trader to view all prices, quotes, and potential P&L in their own "preferred currency" and execute transactions with the currency conversion performed automatically, giving the trader "certain knowledge" of the financial outcome at the moment of the transaction (’107 Patent, col. 2:24-38, Abstract).
- Technical Importance: The described solution aims to reduce the friction and financial risk inherent in cross-currency investing by embedding real-time currency exchange data and conversion capabilities directly into the trading workflow (Compl. ¶28).
- Key Claims at a Glance:
- The complaint asserts independent claim 1 and reserves the right to assert other claims (Compl. ¶49).
- Claim 1 (Method) Essential Elements:
- Providing a trading server coupled to currency and market exchange servers.
- Receiving an indicator of a preferred currency from a trader.
- Displaying an asset in the preferred currency by determining and applying a prevailing exchange rate.
- Displaying all costs and fees in the preferred currency, which are dynamically changed in accordance with a constantly updated exchange rate.
- Conducting a transaction by sending a request to the market exchange server.
- Receiving a settlement notification and executing the transaction with a calculated prevailing exchange rate obtained right before the transaction.
- Performing a currency conversion of the transaction proceeds.
- The Invention Explained:
U.S. Patent 10,776,863, "Method and Apparatus for Displaying Trading Assets in a Preferred Currency," issued September 15, 2020
- The Invention Explained:
- Problem Addressed: As a continuation of the ’107 Patent, this patent addresses the same core problem: prior art systems require investors to transact in the market currency of an asset, creating uncertainty due to separate, non-transactional currency conversions (’863 Patent, col. 1:38-60).
- The Patented Solution: The patent describes a method for displaying and trading assets in a preferred currency. It leverages a similar three-tier architecture (brokerage, market exchange, currency exchange) to present all transaction-related data to the user in their chosen currency, thereby abstracting away the complexity of the underlying market and currency exchanges (’863 Patent, col. 2:25-38, Abstract).
- Technical Importance: This technology focuses on improving the user experience and decision-making for international investors by providing a seamless, single-currency view of a multi-currency trading environment (Compl. ¶23).
- Key Claims at a Glance:
- The complaint asserts independent claim 1 and reserves the right to assert other claims (Compl. ¶65).
- Claim 1 (Method) Essential Elements:
- Coupling a trading server to one or more currency exchange servers and one or more market exchange servers.
- Receiving an indicator of a preferred currency from a trader.
- Displaying the asset in the preferred currency while it is traded in a market currency, which includes determining a prevailing exchange rate.
- Displaying all costs and fees, with their value dynamically changing with the exchange rate.
- Conducting a transaction by transmitting a request to the market exchange server.
- Receiving a settlement notification and executing the transaction using a freshly calculated exchange rate to prevent uncertainty.
- The Invention Explained:
Multi-Patent Capsule: U.S. Patent 11,449,930, "Method and Apparatus for Trading Assets in Different Currencies," issued September 20, 2022
- Technology Synopsis: This patent, also in the same family, claims a system for trading assets across different currencies. The invention centers on a trading server that calculates and displays costs and fees in a trader's selected first currency for an asset traded in a second currency. These displayed costs are dynamically changed in accordance with a prevailing exchange rate, and the system executes the final transaction using a newly calculated exchange rate to ensure the final settlement costs do not match the pre-transaction displayed costs, reflecting the live nature of the exchange.
- Asserted Claims: The complaint asserts independent claim 12 (system claim) (Compl. ¶81).
- Accused Features: The complaint alleges that Defendant’s provision of trading servers coupled to currency and market exchange servers infringes the patent (Compl. ¶81).
III. The Accused Instrumentality
Product Identification
- The accused instrumentalities are Defendant’s Charles River Investment Management Solution (“IMS”), including its Order and Execution Management Systems (“OEMS”) and Investment Book of Record (“IBOR”) (Compl. ¶44).
Functionality and Market Context
- The complaint describes the accused IMS as a comprehensive platform for buy-side firms that "automates front and middle office processes" and supports the "entire investment lifecycle on a single platform" (Compl. ¶44). A screenshot from Defendant's marketing materials shows the IMS offering "End-to-End Investment Lifecycle Support" on a single platform (Compl. p. 15). The complaint alleges the platform provides functionalities including "Live Market Data Integration," "Market Connectivity," and "Real-Time Analytics," which are depicted in a diagram of the platform's "Execution Management Capabilities" (Compl. p. 17). The complaint alleges these products are used to provide a consolidated trading platform for Defendant's customers (Compl. ¶44).
IV. Analysis of Infringement Allegations
’107 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| providing a trading server coupled to one or more currency exchange servers and one or more market exchange servers | Defendant provides trading servers that are coupled to currency and market exchange servers. A diagram in the complaint depicts this architecture, showing "Market Connectivity" as a core capability of the accused system. | ¶49(i); p. 17 | col. 5:1-4 |
| receiving in the trading server an indicator of a preferred currency from a trader | The complaint alleges that the accused system receives an indicator of a preferred currency from a trader. | ¶49(ii) | col. 5:36-40 |
| causing a client computer associated with the trader to display at least an asset in the preferred currency while the asset is being traded in a market currency | The complaint alleges the accused system causes a client computer to display an asset in the preferred currency while it is being traded in a market currency. | ¶49(iii) | col. 5:53-58 |
| performing a currency conversion of some portion or all of the transaction from the market currency to the preferred currency... the conversion being performed with the calculated prevailing exchange rate | The complaint alleges the system performs a currency conversion from the market to the preferred currency using a calculated prevailing exchange rate. | ¶49(vi) | col. 2:35-38 |
’863 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| coupling a trading server to one or more currency exchange servers and one or more market exchange servers | The complaint alleges Defendant "practices and provides a trading server, such as the Defendant trading servers coupled to one or more currency exchange servers... and one or more market exchange servers." | ¶65 | col. 5:1-4 |
| receiving in the trading server an indicator of a preferred currency from a trader | The complaint does not provide specific factual allegations corresponding to this element for this patent count, instead alleging generally that Claim 1 is infringed. | ¶65 | col. 5:36-40 |
| causing a client computer associated with the trader to display the asset in the preferred currency while the asset is being traded in a market currency | The complaint does not provide specific factual allegations corresponding to this element for this patent count, instead alleging generally that Claim 1 is infringed. | ¶65 | col. 5:53-58 |
| conducting in the trading server a transaction of the asset... | The complaint does not provide specific factual allegations corresponding to this element for this patent count, instead alleging generally that Claim 1 is infringed. | ¶65 | col. 6:4-8 |
- Identified Points of Contention:
- Scope Questions: A central issue may be the definition of a "trading server." The patents describe a server coupled to distinct exchange servers. The defense may argue that the accused IMS is a monolithic or distributed software suite whose architecture does not map onto the "three-tier" structure described in the patents, or that the term is indefinite.
- Technical Questions: Claim 1 of the ’107 and ’863 patents requires "displaying all costs and fees" that are "dynamically changed in accordance with the prevailing exchange rate updated constantly." The complaint alleges this, but a key factual question for the court will be whether the accused system performs this specific, constant, dynamic update for all costs and fees, versus a more basic display of a converted spot price.
- Evidentiary Questions: The infringement allegations for the ’863 Patent are notably less detailed than for the ’107 Patent. The complaint makes a general allegation that claim 1 of the ’863 Patent is infringed but only provides specific supporting facts for the first element ("coupling a trading server..."). This raises the question of whether the complaint provides sufficient factual matter to plausibly allege infringement of the remaining method steps of that claim.
V. Key Claim Terms for Construction
The Term: "trading server"
- Context and Importance: This term is the central component of the claimed inventions. The complaint characterizes it as a "specialized computer," not a generic one (Compl. ¶37). The construction of this term will be critical, as it will determine whether the architecture of the accused IMS platform falls within the scope of the claims.
- Intrinsic Evidence for a Broader Interpretation: The specification describes the server in general functional terms as facilitating transactions for a trader and being coupled to various exchanges, which could support a construction not limited to a single physical machine (’107 Patent, col. 4:50-57, col. 5:1-4).
- Intrinsic Evidence for a Narrower Interpretation: The patent’s repeated description of a "three-tier architecture" could be interpreted to require a specific structural arrangement of distinct server types (brokerage, asset exchange, currency exchange), potentially narrowing the term to exclude more integrated or distributed systems (’107 Patent, col. 2:24-33).
The Term: "prevailing exchange rate"
- Context and Importance: The patents' alleged innovation hinges on eliminating uncertainty by using a timely exchange rate. Claim 1 of the ’107 patent requires calculating this rate "right before the transaction takes place." The interpretation of "prevailing" and the timing requirement will be pivotal to the infringement analysis.
- Intrinsic Evidence for a Broader Interpretation: The term "prevailing" itself could be argued to mean any generally accepted market rate available at the time, not necessarily an instantaneous one.
- Intrinsic Evidence for a Narrower Interpretation: The patent’s objective to give a trader "certain knowledge" and avoid the uncertainty of rates that "fluctuate significantly" suggests the rate must be real-time or near-real-time, as obtained directly from the coupled currency exchange server at the moment of the transaction, not a cached, delayed, or indicative rate (’107 Patent, col. 1:55-60; col. 6:11-23).
VI. Other Allegations
- Indirect Infringement: The complaint alleges that Defendant induces infringement by "advertising an infringing use" and providing the Accused Instrumentalities with knowledge that they would be used to infringe (Compl. ¶¶54, 57, 70, 73, 86, 89).
- Willful Infringement: Willfulness is alleged based on Defendant’s continued infringement after receiving notice of the patents via the filing of the complaint (Compl. ¶¶53, 69, 85). The complaint also pleads willful blindness, alleging Defendant has a "practice of not performing a review of the patent rights of others" before launching products (Compl. ¶¶58, 74, 90).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of architectural scope: Can the "trading server" recited in the claims, which is described in the context of a "three-tier architecture," be construed to read on the integrated, multi-function software platform of the accused Charles River IMS? The outcome will depend on whether the court defines "server" by its specific structure or its broad function.
- A key evidentiary question will be one of functional precision: Does the accused platform actually perform the claimed method of dynamically updating "all costs and fees" based on a "constantly updated" exchange rate and executing the transaction with a separate rate calculated "right before the transaction takes place"? Plaintiff will need to produce evidence demonstrating this specific, time-sensitive functionality, distinguishing it from a more conventional display of converted prices.
- A threshold pleading question may arise regarding the sufficiency of infringement allegations for the ’863 patent. The court may need to decide whether the complaint's general assertion of infringement, supported by specific facts for only one of several method steps, is sufficient to state a plausible claim for relief for that patent.