Intercurrency Software LLC v. Plus500 Ltd

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Intercurrency Software LLC (Texas)
  • Defendant: Plus500 Ltd (Israel)
  • Plaintiff’s Counsel: Garteiser Honea, PLLC
• Case Identification: 2:24-cv-00257, E.D. Tex., 04/17/2024
• Venue Allegations: Plaintiff alleges venue is proper because Defendant is subject to personal jurisdiction and conducts regular business in the district. As Defendant is not a U.S. resident, it may be sued in any judicial district.
• Core Dispute: Plaintiff alleges that Defendant’s online financial trading platforms infringe three U.S. patents related to systems and methods for conducting securities transactions in a trader's preferred currency.
• Technical Context: The technology at issue involves financial trading platforms that allow a user to view prices, execute trades, and settle transactions in a local or "preferred" currency for assets that are natively traded in a different "market" currency.
• Key Procedural History: The three patents-in-suit are part of the same family, with the '863 and '930 patents being continuations of the application that led to the '107 patent. The complaint notes that the patents-in-suit have been cited in patents issued to Bank of America, an assertion that may be used to suggest the technology's relevance.

Case Timeline

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

U.S. Patent No. 10,062,107 - Consolidated Trading Platform

Issued August 28, 2018

The Invention Explained

• Problem Addressed: The patent describes a problem in prior art financial systems where a foreign investor wishing to trade U.S. securities had to first convert a bulk amount of their local currency to U.S. dollars. This exposed the investor to risks from exchange rate fluctuations between the time of the currency exchange and the securities transaction, creating "no certain knowledge of what profit or loss he was going to get." (’107 Patent, col. 1:56-60; Compl. ¶15). The currency conversion was not performed "at a transactional level" (Compl. ¶16).
• The Patented Solution: The invention proposes a consolidated trading platform integrating a "three-tier architecture" composed of a brokerage, a market exchange, and a currency exchange (’107 Patent, col. 2:25-28). This system presents all prices and settles all transactions in the trader's preferred currency by performing the necessary currency conversion in conjunction with the asset transaction, thereby allowing a trader to "always know[] exactly what he/she may end up with" (’107 Patent, col. 2:33-35).
• Technical Importance: This integrated approach was designed to eliminate the uncertainty and risk associated with separate, non-contemporaneous currency conversions in international securities trading (Compl. ¶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 currency and 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, which involves determining a prevailing exchange rate.
  • Conducting a transaction of the asset by transmitting a request to the market exchange server.
  • Receiving a settlement notification and calculating a prevailing exchange rate "right before the transaction takes place" to execute the transaction.
  • Performing a currency conversion from the market currency to the preferred currency.

U.S. Patent No. 10,776,863 - Method and Apparatus for Displaying Trading Assets in a Preferred Currency

Issued September 15, 2020

The Invention Explained

• Problem Addressed: Similar to the ’107 Patent, this patent addresses the challenge for investors trading assets priced in a currency different from their own, where the lack of transactional-level currency conversion creates uncertainty about the final profit or loss (’863 Patent, col. 1:53-61).
• The Patented Solution: The invention describes a method where a trading server, coupled to market and currency exchanges, determines a trader's preferred currency and a prevailing exchange rate. It then displays asset prices and associated costs to the trader in that preferred currency, with the value dynamically changing in accordance with the constantly updated exchange rate, even if the asset's market price remains unchanged (’863 Patent, Abstract; col. 8:52-65).
• Technical Importance: The solution provides traders with a real-time, dynamic valuation of foreign assets in their local currency, abstracting away the complexities of manual or separate currency conversion calculations (Compl. ¶19).

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 an asset in the preferred currency by determining a prevailing exchange rate, where the displayed value changes with the exchange rate.
  • Conducting a transaction of the asset.
  • Receiving a settlement notification and executing the transaction with a calculated exchange rate obtained "right before the transaction."

U.S. Patent No. 11,449,930 - Method and Apparatus for Trading Assets in Different Currencies

Issued September 20, 2022

• Technology Synopsis: This patent describes a system for trading assets across different currencies. It focuses on calculating and displaying all costs and fees in a trader's selected "first currency" while the asset is traded in a "second currency." The system determines a first prevailing exchange rate for display purposes and a second, updated prevailing rate calculated "right before the transaction takes place" for execution, ensuring the final settlement is based on a near-instantaneous rate (’930 Patent, col. 9:1-9; Abstract).
• Asserted Claims: The complaint asserts independent claim 12 (Compl. ¶67).
• Accused Features: The complaint alleges that Defendant’s trading servers, which are coupled to currency and market exchanges, infringe this patent by providing the claimed functionality (Compl. ¶67).

III. The Accused Instrumentality

Product Identification

• The "Accused Instrumentalities" are identified as the "Plus500 trading platforms and systems," which include the "TradeSniper" futures trading application (Compl. ¶¶4, 30).

Functionality and Market Context

• The complaint alleges these are platforms offered by a "global fintech firm" for online trading of financial instruments like contracts for difference (CFDs), futures, and options (Compl. ¶3). The screenshot provided in the complaint shows the Plus500 user interface for trading futures, depicting various contracts, prices, and buy/sell functionality on a mobile device (Compl. p. 8). The central accused function is the provision of a consolidated trading platform that enables trading in a preferred currency, allegedly covered by the patents-in-suit (Compl. ¶30). The complaint alleges that the launch of the TradeSniper app in September 2022 was part of an expansion of Defendant's footprint with retail U.S. customers (Compl. ¶4).

IV. Analysis of Infringement Allegations

U.S. Patent 10,062,107 Infringement Allegations

U.S. Patent 10,776,863 Infringement Allegations

The complaint does not provide sufficient detail for a full claim chart analysis of the ’863 Patent. It asserts infringement of Claim 1 and makes a general allegation that 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" (Compl. ¶51). The complaint does not, however, map the specific elements of Claim 1 of the ’863 Patent to corresponding functionalities of the Accused Instrumentalities as it does for the ’107 Patent.

• Identified Points of Contention:
  • Architectural Questions: A central question will be whether the Defendant's platform architecture maps onto the "three-tier architecture" described in the patents. The analysis may focus on whether the Defendant operates a single "trading server" that performs the claimed functions or uses a more distributed system where the required steps are performed by separate, uncoupled entities, potentially challenging the single-actor infringement theory.
  • Technical Questions: The infringement case may turn on the precise mechanism and timing of the currency conversion. A key factual question is whether the accused platform calculates a "prevailing exchange rate... right before the transaction takes place" (’107 Patent, col. 9:15-18) to provide the certainty described in the patent, or if it uses indicative rates, batched conversions, or another method that creates a temporal gap between the rate determination and the transaction, which may create a mismatch with the claim language.

V. Key Claim Terms for Construction

The Term: "trading server"

• Context and Importance: This term is foundational to the asserted independent claims of all three patents. Its construction is critical because the claims require this single entity to perform or control a series of interconnected steps. Practitioners may focus on this term to dispute whether Defendant's modern, likely distributed or cloud-based, infrastructure constitutes a single "trading server" as contemplated by the patent.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification describes the server's role functionally, as part of a "consolidated trading platform" that presents information and executes transactions in a preferred currency, which could support an interpretation covering any system architecture that achieves this result (’107 Patent, col. 2:15-35).
  • Evidence for a Narrower Interpretation: Figure 2A of the patents depicts a "brokerage" server (208) as distinct from, though networked to, a "currency exchange" (206) and a "market exchange" (210). This could support an argument that the "trading server" is specifically the brokerage component and does not itself encompass the full functionality of the currency or market exchanges.

The Term: "prevailing exchange rate... right before the transaction takes place"

• Context and Importance: This phrase, appearing in claim 1 of the '107 patent, is central to the invention's stated goal of eliminating currency fluctuation risk. The definition of "prevailing" and the temporal requirement of "right before" will be critical to determining infringement.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The term could be construed to mean any reasonably current exchange rate available to the system at or near the moment of a transaction request, without requiring a specific source or real-time guarantee (’107 Patent, col. 5:47-49).
  • Evidence for a Narrower Interpretation: The specification links the exchange rate to what is "provided by a participating financial agency that is willing to buy" and sell at that rate (’107 Patent, col. 5:50-54). This could support a narrower construction requiring a live, transactable rate, as opposed to a purely indicative or slightly delayed data feed.

VI. Other Allegations

• Indirect Infringement: The complaint alleges that Defendant induces infringement by "advertising an infringing use" and providing services intended for use in an infringing manner (Compl. ¶¶40, 43, 56, 72).
• 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 also alleges willful blindness, asserting that Defendant has a "practice of not performing a review of the patent rights of others" before launching products (Compl. ¶¶44, 60, 76).

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

• A central issue will be one of architectural equivalence: does the Defendant’s accused platform, likely a modern distributed service, practice the specific system structure and method steps recited in the claims, particularly the coordinated actions of a single "trading server" interacting with distinct currency and market exchanges?
• A key evidentiary question will be one of functional precision: does the accused platform’s currency conversion mechanism meet the strict temporal requirement of using a "prevailing exchange rate" calculated "right before the transaction takes place" to eliminate pricing uncertainty, as claimed in the patents, or is there a technical mismatch in its operational timing or the nature of the exchange rate it uses?
• Given the subject matter, a threshold question for the court will be patent eligibility under 35 U.S.C. § 101: do the claims, directed to computerized methods of conducting financial transactions, recite a patent-ineligible abstract idea, or do they articulate a specific technological improvement to computer functionality sufficient to satisfy the Alice framework? The complaint’s pre-emptive arguments on this topic suggest this will be a primary battleground (Compl. ¶¶22-28).