Intercurrency Software LLC v. aux Cayes Fintech Co Ltd

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Intercurrency Software LLC (Texas)
  • Defendant: Aux Cayes FinTech Co. Ltd. (OKX) (Seychelles) and OK Group (China)
  • Plaintiff’s Counsel: Garteiser Honea, PLLC
• Case Identification: 2:24-cv-00117, E.D. Tex., 02/20/2024
• Venue Allegations: Plaintiff alleges venue is proper because Defendant is subject to personal jurisdiction in the district, conducts regular business there, and is not a U.S. resident, permitting suit in any judicial district.
• Core Dispute: Plaintiff alleges that Defendant’s cryptocurrency trading platforms infringe a family of patents related to a consolidated financial trading system that allows users to view prices and execute transactions in a preferred local currency, even when the underlying asset is traded in a different market currency.
• Technical Context: The technology addresses currency conversion risk in global financial trading by integrating real-time exchange rate data into the trading interface, aiming to provide users with transactional price certainty in their chosen currency.
• Key Procedural History: The complaint alleges that the patents-in-suit have been cited by patents issued to Bank of America. It also asserts that the patent examiners considered and overcame subject matter eligibility and prior art challenges during prosecution by reviewing relevant art classes, a statement that may be intended to preemptively counter anticipated invalidity defenses.

Case Timeline

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

U.S. Patent 10,062,107 (the '107 Patent), "Consolidated Trading Platform," Issued August 28, 2018

The Invention Explained

• Problem Addressed: The patent’s background describes a problem in prior art financial systems where an investor trading foreign securities had to first convert a bulk sum of their local currency into the market currency (e.g., USD). This process created uncertainty, as the investor had "no certain knowledge of what profit or loss he was going to get because the currency exchange rate" could "fluctuate significantly" between the currency conversion and the asset transaction ( Compl. ¶16; ’107 Patent, col. 1:53-60). The currency conversion was not performed "at a transactional level" ( Compl. ¶17; ’107 Patent, col. 1:61-67).
• The Patented Solution: The patent discloses a "three-tier architecture" that integrates a brokerage, a market exchange, and a currency exchange into a single consolidated platform (’107 Patent, col. 2:25-28). This system allows the platform to present "all prices, market data, P&L estimates, and transaction results or settlements in a preferred currency," thereby enabling a trader to know "exactly what he/she may end up with" at the moment of a transaction (’107 Patent, col. 2:30-35).
• Technical Importance: The described approach sought to mitigate currency exchange risk and increase price transparency for investors participating in increasingly interconnected global financial markets (’107 Patent, col. 1:12-26).

Key Claims at a Glance

• The complaint asserts independent claim 1 (Compl. ¶36).
• The essential elements of Claim 1 include:
  • A method comprising 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 while it is being traded in a market currency.
  • Conducting a transaction of the asset by transmitting a request to a market exchange server.
  • Receiving a settlement notification, where the trading server is configured to calculate the prevailing exchange rate "right before the transaction takes place" and execute the transaction using that calculated rate.
  • Performing a currency conversion of some or all of the transaction from the market currency to the preferred currency.

U.S. Patent 10,776,863 (the '863 Patent), "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, the '863 Patent addresses the same problem of transactional uncertainty caused by currency fluctuations in prior art trading systems (’863 Patent, col. 1:56-62).
• The Patented Solution: This patent also describes a consolidated trading platform but places particular emphasis on the dynamic display of information to the user. The claimed solution involves causing a client computer to display the asset's value in the user's preferred currency, where the "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, col. 7:55-62). This ensures the displayed price reflects real-time currency risk.
• Technical Importance: This refinement focuses on the user interface element of the trading system, ensuring the price displayed to a trader is a live, actionable value that incorporates up-to-the-minute currency exchange data.

Key Claims at a Glance

• The complaint asserts independent claim 1 (Compl. ¶52).
• The essential elements of Claim 1 include:
  • A method of coupling a trading server to currency and market exchange servers and receiving a preferred currency indicator from a trader.
  • Causing a client computer to display the asset in the preferred currency.
  • A specific method of display wherein 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."
  • Displaying "all costs and fees in the preferred currency."
  • Conducting a transaction and receiving a settlement notification based on a prevailing exchange rate calculated "right before the transaction."

Multi-Patent Capsule

• Patent Identification: U.S. Patent 11,449,930 ("the ’930 Patent"), "Method and Apparatus for Trading Assets in Different Currencies," Issued September 20, 2022.
• Technology Synopsis: This patent, a continuation in the same family, describes a system for trading assets across different currencies. It focuses on a method where a first prevailing exchange rate is used to display costs to a user, but a second, newly calculated prevailing exchange rate is obtained "right before the transaction takes place" to execute the final settlement, ensuring the transaction reflects the most current rate and that the final settlement costs are not identical to the initially displayed costs (’930 Patent, Claim 1).
• Asserted Claims: Independent Claim 12 (Compl. ¶68).
• Accused Features: The complaint alleges that Defendant's provision of a "trading server... coupled to one or more currency exchange servers... and one or more market exchange servers" infringes the patent (Compl. ¶68).

III. The Accused Instrumentality

• Product Identification: The complaint identifies the "OKX and OKCoin trading platforms and systems," referred to collectively as the "Accused Instrumentalities" (Compl. ¶31).
• Functionality and Market Context: The complaint alleges these are platforms for "crypto trading" that are available to users in the United States (Compl. ¶¶4, 5). The core accused functionality involves providing a consolidated trading platform that allegedly allows users to view prices and conduct transactions in a preferred currency that may be different from the primary market currency of the traded asset (Compl. ¶¶18-20). The complaint provides a marketing screenshot from the okx.com website, which displays the OKX mobile application interface showing a BTC/USDT trading chart and price (Compl. p. 8). The complaint alleges that Defendant "generates substantial financial revenues" from the operation of these platforms (Compl. ¶35).

IV. Analysis of Infringement Allegations

'107 Patent Infringement Allegations

• Identified Points of Contention:
  • Scope Questions: The '107 Patent, with a 2007 priority date, describes its invention in the context of traditional financial "securities" and "assets" like stocks, bonds, and oil (’107 Patent, col. 2:20-24). This raises the question of whether the claim term "asset" can be construed to cover the "cryptocurrencies" traded on the accused platforms, which have different technical and regulatory characteristics.
  • Technical Questions: Claim 1 requires the trading server to calculate the prevailing exchange rate "right before the transaction takes place." A key factual question will be what evidence shows that the accused platforms perform this calculation at the specific moment required, as opposed to using a cached, bundled, or periodically updated rate that may not provide the same degree of real-time certainty claimed by the patent.

'863 Patent Infringement Allegations

• Identified Points of Contention:
  • Evidentiary Questions: The complaint offers sparse factual detail for infringement of the '863 Patent. A central point of contention will be whether Plaintiff can produce evidence that the accused platforms meet the specific functional requirement that the displayed "valuation... changes in accordance with the prevailing exchange rate updated constantly," separate from changes in the asset's market price.
  • Scope Questions: The claim requires displaying "all costs and fees." It will be a matter of dispute whether the accused platforms' display of a single, all-in price satisfies this limitation, or if the claim requires an itemized breakdown of the asset price and associated fees.

V. Key Claim Terms for Construction

• The Term: "asset" (’107 Claim 1; ’863 Claim 1)

  • Context and Importance: The patents' specifications exclusively use examples of traditional financial instruments like stocks, bonds, and commodities. The accused products are cryptocurrency exchanges. The construction of "asset" will be dispositive for whether the patents' scope covers the accused technology.
  • Intrinsic Evidence for a Broader Interpretation: The specification states that securities include, "but are not limited to, a wide array of electronically traded financial assets" before providing an exemplary list, which may support an argument that the term is not exhaustive and can encompass new types of electronically traded assets like cryptocurrency (’107 Patent, col. 2:19-24).
  • Intrinsic Evidence for a Narrower Interpretation: The specification consistently refers to traditional exchanges like "NASDAQ" and "NYSE" (’107 Patent, col. 1:42; col. 5:6) and assets like "Microsoft Corporation" stock (’107 Patent, col. 6:50-51). This context may support an interpretation limiting "asset" to the types of centrally-issued securities contemplated at the time of invention.

• The Term: "right before the transaction takes place" (’107 Claim 1; ’863 Claim 1)

  • Context and Importance: This temporal limitation is critical to the invention’s purported benefit of eliminating uncertainty from currency fluctuations that occur "at another time" (’107 Patent, col. 1:58-60). The infringement analysis will depend heavily on the precise timing of the exchange rate calculation in the accused systems.
  • Intrinsic Evidence for a Broader Interpretation: The patent’s objective is to solve the problem of rates fluctuating "significantly enough to affect the ultimate profit or loss" (’107 Patent, col. 1:58-60). This purpose may support an argument that any calculation performed sufficiently close in time to the transaction to prevent such significant fluctuation meets the limitation.
  • Intrinsic Evidence for a Narrower Interpretation: The plain language suggests a specific, last-moment action. The flowchart in Figure 5, for example, shows obtaining the exchange rate (512) as a distinct step before completing the transaction (514), which may support an argument for a strict sequential order where the rate is fetched immediately prior to execution.

VI. Other Allegations

• Indirect Infringement: The complaint alleges inducement to infringe for all three patents. The allegations are based on Defendant making the platforms available and "advertising an infringing use," which allegedly demonstrates intent for the platforms to be used in an infringing manner (e.g., Compl. ¶¶42, 44, 58, 74).
• Willful Infringement: The complaint pleads willfulness based on alleged post-suit knowledge, stating that infringement "will now be willful through the filing and service of this Complaint" (e.g., Compl. ¶¶40, 56, 72). It further alleges willful blindness based on a purported "practice of not performing a review of the patent rights of others" before launching products (e.g., Compl. ¶¶45, 61, 77).

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

• A core issue will be one of definitional scope: can the term "asset," which is rooted in the 2007 patent disclosure’s context of traditional securities like stocks and commodities, be construed to cover the decentralized "cryptocurrencies" traded on the accused 2024-era platforms?
• A key evidentiary question will be one of temporal precision: does the accused platforms' software architecture calculate and apply a "prevailing exchange rate" at the specific moment "right before the transaction takes place" as strictly required by the claims, or does it rely on a periodically refreshed or bundled rate that creates a potential mismatch in technical operation and fails to deliver the claimed benefit of transactional certainty?
• The case may also turn on a question of functional operation: can the plaintiff provide evidence that the accused platforms' user interface performs the specific function claimed in the '863 patent, where the displayed asset valuation "constantly" and independently changes to reflect only currency fluctuations, even when the asset's underlying market price is static?