Intercurrency Software LLC v. Ifinex Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Intercurrency Software LLC (Texas)
  • Defendant: iFinex, Inc. (British Virgin Islands)
  • Plaintiff’s Counsel: Garteiser Honea, PLLC
• Case Identification: 2:24-cv-00218, E.D. Tex., 03/28/2024
• 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. The complaint also alleges that Defendant conducts regular business and that acts of infringement occurred in the district.
• Core Dispute: Plaintiff alleges that Defendant’s Bitfinex cryptocurrency trading platform infringes patents related to systems and methods for conducting financial transactions in a user's preferred currency when the underlying asset is traded in a different market currency.
• Technical Context: The technology lies in the financial technology (fintech) sector, specifically addressing the complexities of cross-currency trading by integrating real-time currency conversion into the transaction process.
• Key Procedural History: The complaint does not mention any prior litigation or post-grant proceedings involving the Patents-in-Suit. It notes that the patents have been cited in patents issued to Bank of America.

Case Timeline

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

U.S. Patent 10,062,107 - CONSOLIDATED TRADING PLATFORM

• Patent Identification: U.S. Patent 10,062,107, “CONSOLIDATED TRADING PLATFORM,” issued August 28, 2018.

The Invention Explained

• Problem Addressed: The patent describes a problem in prior art trading systems where an investor trading foreign assets (e.g., a Chinese investor buying U.S. stocks) had to perform separate, bulk currency conversions before and after trading (Compl. ¶15). This created uncertainty because the "currency exchange rate must be obtained for a bulk amount at another time, which may fluctuate significantly enough to affect the ultimate profit or loss" (’107 Patent, col. 1:56-60). The patent asserts that prior art systems did not perform currency conversion "at a transactional level" (’107 Patent, col. 1:62-63).
• The Patented Solution: The invention proposes a "consolidated trading platform" using a "three-tier architecture" that includes a brokerage, a market exchange, and a currency exchange (’107 Patent, col. 2:24-33). This integrated system presents all prices, data, and settlements in a trader's "preferred currency," allowing the trader to "always know[] exactly what he/she may end up with a transaction of an asset" (’107 Patent, col. 2:33-35).
• Technical Importance: The described technology aims to remove exchange rate risk and uncertainty from international asset trading by embedding the currency conversion function directly into the transaction workflow (’107 Patent, col. 2:15-19).

Key Claims at a Glance

• The complaint asserts independent Claim 1 as exemplary (Compl. ¶35).
• The 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 in the trading server 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 when the transaction is performed, wherein the trading server is configured to calculate a prevailing exchange rate right before the transaction and execute it with that rate;
  • performing a currency conversion of the transaction from the market currency to the preferred currency.
• The complaint does not explicitly reserve the right to assert dependent claims.

U.S. Patent 10,776,863 - METHOD AND APPARATUS FOR DISPLAYING TRADING ASSETS IN A PREFERRED CURRENCY

• Patent Identification: 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: The ’863 Patent addresses the same problem as its parent ’107 Patent: the financial uncertainty faced by investors when trading assets in a foreign currency due to separate and delayed currency exchange operations (’863 Patent, col. 1:55-63).
• The Patented Solution: The invention describes a method where a trading server, coupled to currency and market exchanges, displays an asset's information to a trader in their preferred currency. A key aspect is 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" (’863 Patent, Claim 1). This provides the trader with a dynamic, real-time view of the asset's value in their own currency, directly mitigating the stated problem.
• Technical Importance: This approach enhances transparency for the international investor by making the impact of currency fluctuations on asset value visible in real-time, prior to executing a trade (’863 Patent, Abstract).

Key Claims at a Glance

• The complaint asserts independent Claim 1 as exemplary (Compl. ¶51).
• The essential elements of Claim 1 include:
  • coupling a trading server to currency and market exchange servers;
  • receiving an indicator of a preferred currency from a trader;
  • causing a client computer to display the asset in the preferred currency while it is traded in a market currency;
  • wherein the displayed valuation of the asset in the preferred currency changes dynamically with the exchange rate, even if the asset's market price is static;
  • executing a transaction and settlement in the preferred currency.
• The complaint does not explicitly reserve the right to assert dependent claims.

U.S. Patent 11,449,930 - METHOD AND APPARATUS FOR TRADING ASSETS IN DIFFERENT CURRENCIES

• Patent Identification: U.S. Patent 11,449,930, “METHOD AND APPARATUS FOR TRADING ASSETS IN DIFFERENT CURRENCIES,” issued September 20, 2022.
• Technology Synopsis: The ’930 Patent, a continuation of the ’863 Patent, further refines the system for trading assets across different currencies. The invention describes calculating and displaying costs for an asset in a user's selected "first currency" based on a "first prevailing exchange rate," but then executing the actual transaction using a "second prevailing exchange rate" calculated immediately before the transaction occurs. This aims to solve the problem of price slippage caused by exchange rate changes between the moment a user views a price and the moment they execute the trade (’930 Patent, Claim 12).
• Asserted Claims: The complaint asserts independent Claim 12 as exemplary (Compl. ¶67).
• Accused Features: The complaint alleges that Defendant’s trading servers, coupled to currency and market exchange servers, infringe this patent (Compl. ¶67).

III. The Accused Instrumentality

Product Identification

• The accused instrumentalities are iFinex, Inc.’s Bitfinex trading platforms and systems, including its website (bitfinex.com) and associated software applications (Compl. ¶¶3, 30).

Functionality and Market Context

• The Bitfinex platform is described as a "consolidated trading platform" for crypto trading (Compl. ¶30). The complaint provides a screenshot of the Bitfinex mobile application, which displays a trading interface for a BTC/USD pair and highlights functionality to "View positions, orders & history at a glance" (Compl. ¶30). This visual from the complaint shows a user interface for trading a cryptocurrency (BTC) against a fiat currency (USD) (Compl. ¶30). The complaint alleges that iFinex, Inc. operates this global brand and that sales and use occur within the United States, despite company policies to the contrary (Compl. ¶4).

IV. Analysis of Infringement Allegations

'107 Patent Infringement Allegations

Note: The complaint repeatedly references a non-proffered "Exhibit A" for more specific details on infringement (Compl. ¶¶35, 51, 67).

'863 Patent Infringement Allegations

The complaint does not provide sufficient detail for a claim-chart analysis of the ’863 Patent. While it identifies Claim 1 as exemplary, the subsequent allegations in paragraph 51 are conclusory and do not map specific features of the Accused Instrumentalities to the distinct elements of the claim, stating only that Defendant "practices and provides a trading server" and other high-level functions (Compl. ¶51).

Identified Points of Contention

• Scope Questions: The patents-in-suit were filed in 2007 and their specifications primarily discuss traditional financial assets like stocks (’107 Patent, col. 1:32-35). A central question may be whether claim terms like "asset", "security", "market exchange", and "currency exchange" can be construed to read on cryptocurrencies and crypto exchanges as they exist today.
• Technical Questions: The complaint alleges highly specific functionality, such as calculating a prevailing exchange rate "from all exchange rates obtained from the one or more currency exchange servers" right before a transaction ('107 Patent, Claim 1; Compl. ¶35(v)). A key factual dispute may be whether the Bitfinex platform actually performs this specific multi-source calculation, or if it uses a different, simpler method for determining exchange rates. The complaint does not provide specific evidence on this operational detail.

V. Key Claim Terms for Construction

• The Term: "preferred currency"

• Context and Importance: This term is foundational to all asserted claims, as the inventions are premised on displaying and transacting in this currency. Its construction will determine what user action on the accused platform qualifies. Practitioners may focus on this term because its definition could either broadly cover any user-selected currency for display or be narrowly limited to a trader's national "home currency," as described in patent examples.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The claims and summary are broad, referring to conducting transactions in "a preferred currency, regardless of what original or market currency the securities are being traded in" (’107 Patent, col. 2:16-19), which could support interpreting it as any currency a user selects.
  • Evidence for a Narrower Interpretation: The background and examples often frame the problem in terms of an investor in one country (e.g., China) trading in another (e.g., U.S.), implying the "preferred currency" is the investor's home or local currency (’107 Patent, col. 1:43-52). This could support a narrower definition tied to a user's nationality or account domicile.

• The Term: "market currency"

• Context and Importance: This term defines the currency in which the asset is natively priced, against which the "preferred currency" is compared. The relationship between "market currency", "preferred currency", and the "asset" itself will be critical to applying the claims to a crypto trading pair like BTC/USD.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The term could be interpreted to mean any currency in a trading pair that is not the designated "preferred currency".
  • Evidence for a Narrower Interpretation: The specification describes it as the currency of the "primary market for the security/asset" (’107 Patent, col. 2:1-3), such as U.S. Dollars for a stock on a U.S. exchange. A defendant may argue that in a fluid crypto market, a trading pair like BTC/USD lacks a single, primary "market currency" in the traditional sense contemplated by the patent.

VI. Other Allegations

• Indirect Infringement: The complaint alleges inducement of infringement against iFinex, Inc. on the basis that it provides the Bitfinex platform and advertises its use, thereby encouraging its users to perform the patented methods (Compl. ¶¶40, 43, 56, 59).
• Willful Infringement: Willfulness is alleged based on two theories: (1) Defendant’s knowledge of the patents as of the filing of the complaint, making any subsequent infringement willful (Compl. ¶¶39, 55, 71); and (2) a general practice of being "willfully blind" by not performing patent clearance reviews before launching products (Compl. ¶¶44, 60, 76).

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

• A core issue will be one of definitional scope: can the claim terms of the patents, drafted in 2007 with a focus on traditional securities markets, be construed to cover the technology and assets of a modern cryptocurrency exchange? This may turn on the court's interpretation of terms like "asset", "preferred currency", and "market exchange" in the context of crypto trading.
• A key evidentiary question will be one of technical implementation: beyond high-level functionality, can the Plaintiff prove that the Bitfinex platform operates using the specific, granular steps recited in the asserted claims? For example, the court will need to resolve whether the platform’s method for determining and applying exchange rates matches the precise logic required by Claim 1 of the ’107 patent, an area where the complaint currently lacks specific factual support.