Intercurrency Software LLC v. Monex Group Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Intercurrency Software LLC (Texas)
  • Defendant: Monex Group, Inc. (Japan)
  • Plaintiff’s Counsel: Garteiser Honea, PLLC
• Case Identification: 2:24-cv-00255, E.D. Tex., 04/17/2024
• Venue Allegations: Plaintiff alleges venue is proper because Defendant is subject to personal jurisdiction in the district, has conducted business there, and is not a U.S. resident, which permits suit in any judicial district.
• Core Dispute: Plaintiff alleges that Defendant’s cryptocurrency and financial trading platforms infringe patents related to systems and methods that allow users to conduct transactions in a preferred currency, even when the underlying asset is traded in a different market currency.
• Technical Context: The technology addresses the complexities of cross-border financial trading by integrating real-time currency conversion into the transaction process, aiming to provide traders with price certainty in their local currency.
• Key Procedural History: The patents-in-suit belong to a single family and claim priority to 2007. The complaint notes that the patents were allowed after examiners considered art in relevant classifications for financial and currency exchange technologies (G06Q40/00, G06Q40/04), which Plaintiff presents as evidence of the claims' patent eligibility and novelty. No other procedural events are mentioned.

Case Timeline

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’s background describes the problem that investors trading foreign securities lacked "certain knowledge of what profit or loss" they would realize, because the currency exchange to their home currency was a separate step from the asset purchase and subject to fluctuating rates over time (Compl. ¶15; ’107 Patent, col. 1:52-60). The prior art failed to perform currency conversion "at a transactional level" (Compl. ¶16; ’107 Patent, col. 1:61-64).
• The Patented Solution: The invention proposes a "consolidated trading platform" using a "three-tier architecture" that integrates a brokerage, a market exchange, and a currency exchange (’107 Patent, col. 2:24-28, Fig. 2B). This system displays prices and settles transactions in a trader’s "preferred currency," performing the currency conversion in conjunction with the trade itself. This consolidation ensures a trader "always knows exactly what he/she may end up with" (’107 Patent, col. 2:32-35).
• Technical Importance: This approach was designed to eliminate the risk and uncertainty of currency fluctuations from individual cross-border transactions, thereby making foreign markets more transparent and accessible to global traders (Compl. ¶17; ’107 Patent, col. 2:15-19).

Key Claims at a Glance

• The complaint asserts independent Claim 1 (Compl. ¶35).
• 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 by determining a prevailing exchange rate and displaying all costs and fees in that currency;
  • conducting a transaction of the asset by transmitting a request to a market exchange server;
  • receiving a settlement notification for the transaction, which is executed using a calculated prevailing exchange rate obtained right before the transaction; and
  • performing a currency conversion of the transaction from the market currency to the preferred currency.

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 application leading to the ’107 Patent, the ’863 Patent addresses the same core problem: traders' inability to know their precise profit or loss in their home currency when trading assets priced in a foreign currency, due to the temporal separation of the asset transaction and the currency exchange (’863 Patent, col. 1:54-62).
• The Patented Solution: The invention describes a system that displays an asset's valuation in a trader’s preferred currency by referencing a "prevailing exchange rate updated constantly" (’863 Patent, Claim 1). This dynamic valuation means the displayed price in the preferred currency changes with the exchange rate, even if the asset’s price in its market currency remains stable, giving the trader a real-time view of its value in their local terms (’863 Patent, Abstract).
• Technical Importance: This technology focuses on improving the user interface of trading platforms by providing a dynamic, real-time valuation of foreign assets in a local currency context, which reduces both financial uncertainty and the cognitive burden on the trader (’863 Patent, col. 1:63-68).

Key Claims at a Glance

• The complaint asserts independent Claim 1 (Compl. ¶51).
• 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";
  • conducting a transaction of the asset; and
  • receiving a settlement notification.

U.S. Patent 11,449,930 - "Method and Apparatus for Trading Assets in Different Currencies," issued September 20, 2022

• Technology Synopsis: Continuing the same technical theme, the ’930 Patent discloses a method for trading an asset where a server receives a trader's preferred currency, calculates costs and fees in that currency based on a dynamically updated exchange rate, and conducts the transaction. The settlement is performed based on a second exchange rate calculated "right before the transaction takes place," ensuring the final cost matches the real-time converted price and is not subject to later currency fluctuations (’930 Patent, Claim 1).
• Asserted Claims: The complaint asserts independent Claim 12 (Compl. ¶67).
• Accused Features: The complaint alleges that the accused platforms infringe by providing a trading server that executes transactions for assets (e.g., crypto) by coupling to market and currency exchanges and settling them in a user's preferred currency (Compl. ¶67).

III. The Accused Instrumentality

Product Identification

• The accused instrumentalities are Defendant's "Coincheck and TradeStation trading platforms and systems" (Compl. ¶30).

Functionality and Market Context

• The complaint describes the accused instrumentalities as consolidated platforms for trading assets, including cryptocurrencies and securities (Compl. ¶3, ¶4, ¶30). The complaint alleges Defendant's subsidiary, Monex Inc., operates with approximately 2 million online securities trading accounts (Compl. ¶3).
• A screenshot of the Coincheck user interface is provided, showing a "Spot Trading" screen for trading cryptocurrency pairs (e.g., BTC/JPY) and displaying an order list and currency list (Compl. p. 8). This visual depicts a platform that facilitates trading between different currencies (Compl. p. 8).
• A second screenshot shows the TradeStation "mobile trading App," which displays stock information (AAPL) and account details like "Stocks Buying Power" (Compl. p. 9). This visual represents a mobile platform for financial trading (Compl. p. 9).
• The complaint alleges these platforms operate via a trading server coupled to market and currency exchange servers to execute the allegedly infringing methods (Compl. ¶35(i)).

IV. Analysis of Infringement Allegations

’107 Patent Infringement Allegations

• Identified Points of Contention:
  • Scope Questions: The patent specification repeatedly references traditional financial instruments like "securities," "stocks," and "bonds" (’107 Patent, col. 2:16-21). A central question will be whether the term "asset" can be construed to read on the "crypto trading" offered by the accused platforms (Compl. ¶3). The patent's mention of "commodities" may support a broader interpretation (’107 Patent, col. 2:21).
  • Technical Questions: Claim 1 requires calculating the exchange rate "right before the transaction takes place." What evidence demonstrates that the accused platforms perform this calculation at the specific moment required by the claim to "prevent uncertainty," as opposed to using a recently cached or slightly delayed rate? The complaint alleges this functionality but does not detail the underlying technical mechanism (Compl. ¶35(v)).

’863 Patent Infringement Allegations

• Identified Points of Contention:
  • Technical Questions: Claim 1 requires that the asset's valuation changes "in accordance with the prevailing exchange rate updated constantly." The complaint provides a screenshot of the Coincheck interface (Compl. p. 8), but an evidentiary question remains as to whether this static image can prove the constant and dynamic updating function as required by the claim language, or if it merely shows trading pairs.
  • Divided Infringement: The asserted method claim involves actions by both the user (selecting a currency) and the defendant's server. This raises the question of whether Plaintiff can establish that Defendant directs or controls its users' actions to such a degree that all steps of the claimed method can be attributed to Defendant for the purpose of direct infringement.

V. Key Claim Terms for Construction

• The Term: "preferred currency"

  • Context and Importance: This term is central to the invention, as the entire system is oriented around it. The outcome of the dispute may depend on whether the user's selection of a trading pair (e.g., BTC/JPY) on the accused platforms constitutes the selection of a "preferred currency" as contemplated by the patents, which appears to involve a more comprehensive conversion of all transaction-related data into that currency.
  • Intrinsic Evidence for a Broader Interpretation: The specification suggests the platform "presents all prices, market data, P&L estimates, and transaction results or settlements in a preferred currency," which could support an interpretation where any currency a user selects for viewing data qualifies (’107 Patent, col. 2:29-32).
  • Intrinsic Evidence for a Narrower Interpretation: The patent's background problem focuses on a foreign investor converting assets back to a "local currency" or "home currency" (’107 Patent, col. 1:47-52, col. 2:53-54). This language could support a narrower construction where "preferred currency" implies a primary, account-level currency setting, rather than a transient selection for a single trade.

• The Term: "trading server"

  • Context and Importance: The independent claims of both the '107 and '863 patents recite a "trading server" that performs or is configured to perform multiple, distinct functions. Practitioners may focus on this term because infringement will depend on whether Defendant's potentially distributed, cloud-based infrastructure constitutes a single "trading server" as claimed.
  • Intrinsic Evidence for a Broader Interpretation: The specification notes that the described architecture can be "implemented in a single computing machine which may be viewed as a single server or distributed over many servers owned by different organizations" (’107 Patent, col. 5:29-33). This may support a broad interpretation where a collection of networked components can collectively meet the "trading server" limitation.
  • Intrinsic Evidence for a Narrower Interpretation: The claims recite specific actions occurring "in the trading server" (e.g., "receiving in the trading server," "conducting in the trading server"). A party could argue that this requires these functions to be performed by a single, discrete server or logical entity, not by a loosely-coupled set of microservices that comprise the accused platforms.

VI. Other Allegations

• Indirect Infringement: The complaint alleges that Defendant induces infringement by advertising and providing its trading platforms to users in the U.S. with the knowledge and intent that the users will operate them in a manner that directly infringes the asserted method claims (Compl. ¶40-43, ¶56-59, ¶72-75).
• Willful Infringement: The willfulness claim is based on alleged post-suit knowledge, asserting that infringement will be willful from the date of service of the complaint (Compl. ¶39, ¶55, ¶71). The complaint also alleges pre-suit willful blindness, contending that Defendant has a "practice of not performing a review of the patent rights of others" before launching its 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 term "asset," which the patents describe primarily in the context of traditional financial instruments like stocks and commodities, be construed to cover the cryptocurrencies that are the focus of the accused Coincheck platform?
• A key evidentiary question will be one of technical operation: does the functionality of the accused platforms, which allow users to select trading pairs, meet the specific claim requirements for an integrated, transactional currency conversion—including the "constant" updating of valuations and the calculation of an exchange rate "right before" a transaction—or is there a fundamental mismatch in the system's architecture and timing?
• A third central question may concern divided infringement: given that the user and the platform provider each perform different steps of the asserted methods, can Plaintiff establish that Defendant directs or controls the actions of its users to the extent required to prove liability for direct infringement of the complete claimed method?