Intercurrency Software LLC v. Etoro Group Ltd

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Intercurrency Software LLC (Texas)
  • Defendant: eToro Group Ltd. (British Virgin Islands)
  • Plaintiff’s Counsel: Garteiser Honea, PLLC
• Case Identification: 2:24-cv-00116, E.D. Tex., 02/20/2024
• Venue Allegations: Venue is asserted on the grounds that Defendant is subject to personal jurisdiction, conducts business in the district, committed acts of infringement in the district, and, as a non-U.S. resident, may be sued in any judicial district.
• Core Dispute: Plaintiff alleges that Defendant’s online financial trading platform infringes three patents related to systems and methods for executing transactions and displaying asset values in a user's preferred currency.
• Technical Context: The technology concerns cross-border financial trading platforms, which aim to reduce currency exchange risk and provide clarity for international investors by performing real-time currency conversions.
• Key Procedural History: Plaintiff states it is the sole and exclusive owner of the patents-in-suit by assignment. The complaint notes that the patents have been cited by patents issued to Bank of America, and argues that the inventions were deemed novel, non-obvious, and patent-eligible by multiple patent examiners over extensive prior art.

Case Timeline

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

U.S. Patent No. 10,062,107 - “Consolidated Trading Platform,” issued August 28, 2018 (’107 Patent)

The Invention Explained

• Problem Addressed: The patent addresses the uncertainty and risk international investors faced when trading assets in a foreign currency (e.g., a Chinese investor trading U.S. stocks) (Compl. ¶15). Prior systems required bulk currency conversions separate from the asset transaction, meaning the investor had "no certain knowledge of what profit or loss he was going to get because the currency exchange rate... may fluctuate significantly" ('107 Patent, col. 1:53-60).
• The Patented Solution: The invention describes a "consolidated trading platform" that integrates asset trading with currency exchange at a transactional level (Compl. ¶16). It proposes a "three-tier architecture" comprising a brokerage, a market exchange, and a currency exchange ('107 Patent, col. 2:24-33). This system displays asset prices and executes transactions in the investor's "preferred currency," providing immediate clarity on costs, profits, and losses ('107 Patent, col. 2:15-19).
• Technical Importance: This approach aimed to remove a significant friction point in global online brokerage by internalizing currency risk management and presenting a simplified interface to the end-user.

Key Claims at a Glance

• The complaint asserts independent Claim 1.
• Essential elements of Claim 1 include:
  • Providing a trading server coupled to one or more currency exchange servers and one or more market exchange servers.
  • Receiving an indicator of a preferred currency from a trader.
  • Causing a client computer to display an asset in the preferred currency by determining a prevailing exchange rate.
  • 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 proceeds from the market currency to the preferred currency.
• The complaint does not explicitly reserve the right to assert dependent claims.

U.S. Patent No. 10,776,863 - “Method and Apparatus for Displaying Trading Assets in a Preferred Currency,” issued September 15, 2020 (’863 Patent)

The Invention Explained

• Problem Addressed: As a continuation of the application leading to the ’107 Patent, the ’863 Patent addresses the same problem of uncertainty in international securities trading due to currency exchange rate fluctuations ('863 Patent, col. 1:53-65).
• The Patented Solution: The solution is also a consolidated trading platform that provides pricing and settlement in a user's preferred currency ('863 Patent, col. 2:15-38). The claims of this patent place particular emphasis on the dynamic display of asset information, where the value of the asset and associated costs and fees change in real-time on the user's screen in accordance with the constantly updated exchange rate ('863 Patent, col. 9:1-5).
• Technical Importance: This patent focuses on the user-facing aspect of the invention, ensuring the trader has a continuously updated, accurate view of their position in their own currency.

Key Claims at a Glance

• The complaint asserts independent Claim 1.
• 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, wherein the asset's "valuation" changes in accordance with a "prevailing exchange rate updated constantly."
  • Displaying "all costs and fees" in the preferred currency, which are also "dynamically changed."
  • Conducting a transaction and receiving a settlement notification, executing the transaction with a calculated exchange rate.
• The complaint does not explicitly reserve the right to assert dependent claims.

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

• 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 for an asset in a user's selected currency ("first currency") while the asset itself is traded in a different "second currency." The system is designed to execute the transaction and settlement by recalculating the exchange rate immediately before the transaction to provide an accurate, final cost.
• Asserted Claims: The complaint asserts independent system Claim 12 (Compl. ¶67).
• Accused Features: The complaint alleges that Defendant’s provision of a trading server coupled to currency and market exchange servers infringes the ’930 Patent (Compl. ¶67).

III. The Accused Instrumentality

Product Identification

• The "Accused Instrumentalities" are Defendant's "HTX trading platforms and systems" (Compl. ¶30).

Functionality and Market Context

• The complaint alleges the accused products constitute a "consolidated trading platform" for crypto and other financial assets (Compl. ¶¶3-4, 30). The complaint includes a screenshot from Defendant's website describing "The eToro investing platform and app" as an "easy-to-use web platform and intuitive mobile app" that offers access to digital currencies and stocks (Compl. p. 8). The functionality is alleged to include allowing users to select a preferred currency and view and transact assets based on prices converted into that currency (Compl. ¶35). The complaint alleges these platforms are offered to customers in the United States and generate substantial revenue (Compl. ¶¶4, 34).

IV. Analysis of Infringement Allegations

The complaint references an "Exhibit A" for specific infringement details, but this exhibit was not filed with the complaint. The analysis below is based on the narrative allegations.

’107 Patent Infringement Allegations

’863 Patent Infringement Allegations

• Identified Points of Contention:
  • Architectural Questions: The patents describe a "three-tier architecture" with distinct "trading," "currency exchange," and "market exchange" servers ('107 Patent, Fig. 2B). A central question will be whether Defendant's platform, which may be a more integrated software system, meets the "coupled to" limitation, or whether it constitutes a single, non-infringing entity. The patent specification notes that the elements "may be implemented in a single computing machine," which may support a broader interpretation of the architecture (Compl. ¶18; '107 Patent, col. 5:29-31).
  • Technical Questions: A key factual dispute may arise over the timing and method of the exchange rate calculation. Claim 1 of the ’107 Patent requires calculating the rate "right before the transaction takes place" specifically to "prevent uncertainty" (Compl. ¶35(v)). It will be a matter of evidence whether the accused system performs this specific just-in-time calculation, as opposed to using a periodically updated or cached rate, and whether any difference is material.

V. Key Claim Terms for Construction

• The Term: "prevailing exchange rate"

  • Context and Importance: This term appears in the independent claims of all asserted patents and is fundamental to how the invention functions. Its definition will determine what kind of exchange rate data the accused system must use to infringe. Practitioners may focus on this term because the patents suggest a specific derivation, stating it is "derived from all exchange rates obtained from the one or more currency exchange servers" ('107 Patent, col. 8:60-63), which could imply an aggregation or specific selection process that Defendant's system may or may not perform.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The general description of obtaining a rate "from a currency exchange" could suggest any rate provided by such a source is sufficient ('107 Patent, col. 5:46-48).
    • Evidence for a Narrower Interpretation: The claim language "derived from all exchange rates obtained from the one or more currency exchange servers" suggests a specific computational step, not merely the use of a single available rate ('107 Patent, col. 8:60-63).

• The Term: "trading server coupled to one or more currency exchange servers and one or more market exchange servers"

  • Context and Importance: This phrase, central to the system and method claims, defines the required technical architecture. The dispute will likely center on whether an integrated platform, where these functions may be handled by the same software on the same physical hardware, can be considered distinct "servers" that are "coupled."
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification explicitly states, "the three elements may be implemented in a single computing machine which may be viewed as a single server" ('107 Patent, col. 5:29-31). This language may support an argument that logically distinct software modules meet the "coupled" limitation even if running on the same hardware.
    • Evidence for a Narrower Interpretation: Figure 2A of the patents depicts the currency exchange (206), brokerage/trading server (208), and market exchange (210) as physically separate server icons connected by a network. This depiction could support an argument that the claims require distinct, networked hardware components.

VI. Other Allegations

• Indirect Infringement: The complaint alleges inducement under 35 U.S.C. § 271(b), stating Defendant had knowledge of the patents (at least post-filing) and took active steps, such as "advertising an infringing use," that encourage its customers to use the platform in an infringing manner (Compl. ¶¶ 41, 43, 57, 59, 73).
• Willful Infringement: Willfulness is alleged based on Defendant’s knowledge of the patents following the filing and service of the complaint (Compl. ¶¶ 39, 55, 71). The complaint further alleges pre-suit "willful blindness" based on a purported "practice of not performing a review of the patent rights of others first for clearance or to assess infringement thereof prior to launching products" (Compl. ¶¶ 44, 60, 76).

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

1. Architectural Scope: A primary issue will be one of architectural equivalence: does the accused eToro platform, as a potentially integrated software product, embody the "coupled" multi-server architecture recited in the claims? The court will need to weigh the patent's disclosure allowing for a "single computing machine" implementation against figures and descriptions that depict distinct servers.
2. Functional Specificity: A key evidentiary question will concern the timing and method of operation: can Plaintiff demonstrate that the accused platform calculates a "prevailing exchange rate... right before the transaction takes place," as specifically required by Claim 1 of the '107 patent, or does it use a technically different method (e.g., periodic updates) that falls outside the claim scope?
3. Claim Differentiation: Given the assertion of multiple patents from the same family, a latent question will be the distinct scope of each patent's claims. The defense may argue that the infringement theories are improperly duplicative, while the plaintiff will need to articulate how the accused platform infringes the unique elements of each asserted claim, such as the specific "dynamic display" features of the '863 patent versus the transactional execution steps of the '107 patent.