Intercurrency Software LLC v. Coinrule Ltd

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Intercurrency Software LLC (Texas)
  • Defendant: Coinrule Limited (United Kingdom)
  • Plaintiff’s Counsel: Garteiser Honea, PLLC
• Case Identification: 2:24-cv-00379, E.D. Tex., 05/23/2024
• Venue Allegations: Plaintiff alleges venue is proper because Defendant is subject to personal jurisdiction, conducts business in the district, committed alleged acts of infringement in the district, and is not a resident of the United States.
• Core Dispute: Plaintiff alleges that Defendant’s automated cryptocurrency trading platform infringes three patents related to a consolidated financial trading system that conducts transactions in a user's preferred currency.
• Technical Context: The technology addresses currency exchange risk in financial trading by integrating asset transactions with real-time currency conversions, aiming to provide traders with price certainty in their chosen currency.
• Key Procedural History: The complaint notes that the patents-in-suit have been cited by patents issued to Bank of America. It also preemptively argues for the patents' eligibility under 35 U.S.C. § 101, stating that the patent examiners considered the relevant fields of art during prosecution.

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 a problem for investors trading assets in a foreign currency, such as a Chinese investor trading U.S. stocks. Such trading required separate currency exchange transactions before and after the asset trade, exposing the investor to exchange rate fluctuations and making it impossible to know the precise profit or loss at the time of the transaction (Compl. ¶15; ’107 Patent, col. 1:38-60). The patent states that in prior systems, "the currency conversion is not at a transactional level" (’107 Patent, col. 1:61-62).
• The Patented Solution: The invention proposes a "three-tier architecture" that consolidates a brokerage, a market exchange, and a currency exchange into a single platform (’107 Patent, col. 2:24-33). This system allows a trader to view prices and conduct all transactions in a single "preferred currency." It performs the necessary currency conversion "at a transactional level," thereby providing the trader with exact knowledge of the transaction's value in their own currency as it occurs (Compl. ¶16; ’107 Patent, col. 2:33-38).
• Technical Importance: This integrated approach was designed to eliminate the uncertainty and risk of currency fluctuation inherent in international securities trading, thereby making foreign markets more accessible and predictable for traders (Compl. ¶17).

Key Claims at a Glance

• The complaint asserts independent method claim 1 (Compl. ¶35).
• Claim 1 of the ’107 Patent recites a method comprising the following essential elements:
  • 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 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 a prevailing exchange rate "right before the transaction takes place" and execute the transaction with that rate "to prevent uncertainty in currency exchanges in another time."
  • Performing a currency conversion from the market currency to the preferred currency using the calculated prevailing exchange rate.
• The complaint states that the patents-in-suit contain "numerous claims defining distinct inventions," which may suggest an intent to assert other claims later in the litigation (Compl. ¶13).

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 problem of currency exchange rate uncertainty for investors trading in foreign markets (Compl. ¶15; ’863 Patent, col. 1:55-col. 2:2).
• The Patented Solution: The ’863 Patent also discloses a consolidated trading platform that integrates brokerage, market exchange, and currency exchange functions. A key aspect highlighted in its claims is the dynamic display of costs and fees in the user's preferred currency, which constantly update based on the prevailing exchange rate, even if the asset's price in its native market currency remains stable (’863 Patent, cl. 1). This provides the trader with a continuously updated, all-in cost basis in their preferred currency.
• Technical Importance: The solution aims to provide traders with a persistent and accurate view of their real-world costs and potential profits by reflecting currency fluctuations in real time within the trading interface itself (Compl. ¶18-19).

Key Claims at a Glance

• The complaint asserts independent method claim 1 (Compl. ¶51).
• The complaint does not provide sufficient detail for analysis of the elements of claim 1 of the ’863 Patent. It makes a conclusory allegation that the claim is infringed by Defendant's provision of "a trading server... coupled to one or more currency exchange servers... and one or more market exchange servers," without mapping specific features of the accused product to the detailed display and calculation elements of the claim (Compl. ¶51).

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

• Technology Synopsis: As part of the same patent family, the ’930 Patent describes a consolidated financial trading platform designed to solve the problem of currency exchange rate uncertainty. The system integrates brokerage, market, and currency exchange functions to enable all pricing and transactions to be conducted in a user's single preferred currency, thereby providing real-time certainty regarding the value of trades. (’930 Patent, Abstract; Compl. ¶15-19).
• Asserted Claims: The complaint asserts independent system claim 12 (Compl. ¶67).
• Accused Features: The complaint alleges that Defendant’s platform infringes by providing "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. ¶67).

III. The Accused Instrumentality

Product Identification

The "Accused Instrumentalities" are identified as the "Coinrule platforms and systems," which provide "automated digital crypto currency trading" (Compl. ¶30).

Functionality and Market Context

The platform allows users to create and deploy automated trading rules and strategies on major cryptocurrency exchanges (Compl. ¶30). A screenshot from coinrule.com shows a dashboard displaying a user's "Net Profit" in U.S. dollars, which may suggest the platform's ability to operate using a base or preferred currency for performance tracking (Compl. p. 8). The complaint alleges the platform performs the functions of receiving a preferred currency, displaying assets in that currency, and executing transactions that involve currency conversion in a manner that maps to the asserted patent claims (Compl. ¶35).

IV. Analysis of Infringement Allegations

’107 Patent Infringement Allegations

| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
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| providing a trading server coupled to one or more currency exchange servers and one or more market exchange servers; | Defendant provides trading servers coupled to one or more currency exchange servers and one or more market exchange servers. | ¶35(i) | col. 4:65-5:5 |
| receiving in the trading server an indicator of a preferred currency from a trader; | Defendant's system receives an indicator of a preferred currency from a trader. | ¶35(ii) | col. 5:30-38 |
| causing a client computer associated with the trader to display at least an asset in the preferred currency while the asset is being traded in a market currency... | Defendant's system causes a client computer to display an asset in the preferred currency while it is being traded in a market currency. | ¶35(iii) | col. 5:53-60 |
| conducting in the trading server a transaction of the asset by transmitting a transaction request from the trading server to a market exchange server when the trader decides to proceed with trading the asset; | Defendant's system conducts a transaction by transmitting a request to a market exchange server when a trader decides to proceed. | ¶35(iv) | col. 9:5-8 |
| receiving a settlement notification... wherein the conditions include a price at which the asset is traded in the preferred currency, the trading server is configured to calculate the prevailing exchange rate from all exchange rates obtained... right before the transaction takes place... and executes the transaction with the calculated prevailing exchange rate... to prevent uncertainty in currency exchanges... | The trading server receives a settlement notification and is configured to calculate the prevailing exchange rate right before the transaction and execute with that rate to prevent uncertainty. | ¶35(v) | col. 9:9-22 |
| performing a currency conversion of some portion or all of the transaction from the market currency to the preferred currency when the preferred currency is not identical to the market currency, the conversion being performed with the calculated prevailing exchange rate. | Defendant's system performs a currency conversion from the market currency to the preferred currency using the calculated exchange rate. | ¶35(vi) | col. 9:23-27 |

• Identified Points of Contention:
  • Scope Questions: The patent specification provides examples from traditional finance, such as the NYSE and Scottrade (’107 Patent, col. 5:2-5). A central question may be whether the terms "market exchange" and "currency exchange" can be construed to read on modern cryptocurrency exchanges, which often consolidate asset trading and currency conversion functions into a single entity.
  • Technical Questions: Claim 1 requires the trading server to calculate the exchange rate "right before the transaction takes place" for the specific purpose of preventing "uncertainty in currency exchanges in another time." A key factual question will be what evidence demonstrates that the accused Coinrule platform performs this calculation with the specific timing and purpose recited in the claim, as opposed to for general reporting or other purposes.

V. Key Claim Terms for Construction

• The Term: "trading server"

• Context and Importance: This term defines the core architectural component of the claimed invention. The infringement analysis will depend on whether the distributed, cloud-based architecture of the accused Coinrule platform constitutes a "trading server" as contemplated by the patent.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification suggests the term is not limited to a single physical machine, referring to it as "a server or servers provided by a financial institution" (’107 Patent, col. 3:22-23).
  • Evidence for a Narrower Interpretation: Figure 2A depicts the "brokerage" server (208) as a distinct entity from the "currency exchange" (206) and "market exchange" (210) servers. This could support an argument that the "trading server" is specifically the brokerage component in a required three-part system, not an integrated platform.

• The Term: "market exchange"

• Context and Importance: The definition of this term is critical for determining whether the patent, drafted with traditional securities in mind, applies to the world of cryptocurrency. Practitioners may focus on this term because the accused platform operates exclusively with crypto exchanges.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The patent abstract and claims refer generally to "securities/assets," which could be interpreted to include digital assets like cryptocurrencies (’107 Patent, Abstract).
  • Evidence for a Narrower Interpretation: The specification's only concrete example of a market exchange is the "NYSE" (’107 Patent, col. 5:4-5). This may be used to argue that the term is limited to traditional, regulated securities exchanges and does not extend to the functionally different environment of cryptocurrency exchanges.

VI. Other Allegations

• Indirect Infringement: The complaint alleges inducement of infringement under 35 U.S.C. § 271(b). The factual basis alleged is Defendant’s "advertising an infringing use, which supports a finding of an intention for the accused product to be used in an infringing manner" (Compl. ¶43, ¶59, ¶75). The complaint alleges that the direct infringers are the end-users of the Coinrule platform.
• Willful Infringement: Willfulness is alleged based on post-suit knowledge, stating that infringement "will now be willful through the filing and service of this Complaint" (Compl. ¶39, ¶55, ¶71). The complaint also pleads willful blindness, alleging on information and belief 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

1. A core issue will be one of definitional scope: can claim terms like "market exchange" and "currency exchange", which are rooted in the patent's examples of traditional stock and fiat currency trading, be construed to cover the integrated, functionally distinct environment of modern cryptocurrency platforms?
2. A second central issue will be one of technical proof: the claims require specific functions to be performed with a particular timing and purpose, such as calculating an exchange rate "right before the transaction" specifically "to prevent uncertainty." A key evidentiary question for the court will be whether the accused Coinrule platform's operation matches this claimed functionality, or if there is a fundamental mismatch in its technical implementation and purpose.