Intercurrency Software LLC v. Gunthy Ltd

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Intercurrency Software LLC (Texas)
  • Defendant: Gunthy LTD (United Kingdom)
  • Plaintiff’s Counsel: Garteiser Honea, PLLC
• Case Identification: 2:24-cv-00391, E.D. Tex., 05/30/2024
• Venue Allegations: Venue is alleged to be proper because Defendant is not a resident of the United States and may be sued in any judicial district. The complaint also asserts that Defendant is subject to personal jurisdiction in the district due to transacting substantial business and committing acts of infringement in Texas.
• Core Dispute: Plaintiff alleges that Defendant’s automated cryptocurrency trading platform infringes patents related to a consolidated financial trading system that allows transactions to be conducted in a user's preferred currency.
• Technical Context: The technology at issue addresses complexities in cross-border financial trading by integrating real-time currency conversion at the transactional level, a feature applied here to the domain of cryptocurrency exchanges.
• Key Procedural History: The complaint notes that the asserted patents were allowed by three different USPTO examiners after consideration of relevant prior art in the financial technology sector.

Case Timeline

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

U.S. Patent 10,062,107 - “Consolidated Trading Platform,” issued Aug. 28, 2018

The Invention Explained

• Problem Addressed: The patent describes a problem for investors who wish to trade assets (e.g., U.S. stocks) denominated in a foreign currency (Compl. ¶15). These investors lacked "certain knowledge of what profit or loss" they would realize because currency exchange was typically performed separately from the asset transaction, exposing them to risks from fluctuating exchange rates ('107 Patent, col. 1:53-60). The prior art failed to perform currency conversion at a "transactional level" ('107 Patent, col. 1:61-63).
• The Patented Solution: The invention proposes a "consolidated trading platform" that integrates a brokerage, a market exchange, and a currency exchange ('107 Patent, col. 2:24-33). This system presents all prices, transaction data, and settlements to the user in their "preferred currency," automatically performing the necessary currency conversions in conjunction with the asset transaction ('107 Patent, col. 2:28-33). This gives the trader immediate certainty about the final value of the transaction in their home currency ('107 Patent, col. 2:33-35).
• Technical Importance: This approach aimed to reduce the cost and risk associated with currency conversion in international investing by bundling it with the asset trade itself (Compl. ¶19; '107 Patent, col. 2:50-55).

Key Claims at a Glance

• The complaint asserts infringement of at least 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 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 and displaying all costs and fees in that preferred currency.
  • Conducting a transaction of the asset by transmitting a request to a market exchange server.
  • Receiving a settlement notification, where the trading server calculates a prevailing exchange rate right before the transaction.
  • Performing a currency conversion of the transaction proceeds 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,” issued Sep. 15, 2020

The Invention Explained

• Problem Addressed: As a continuation of the '107 Patent, the '863 Patent addresses the same core problem: traders investing in assets denominated in a different currency face uncertainty and risk due to the separation of asset trading and currency exchange functions ('863 Patent, col. 1:50-60).
• The Patented Solution: The invention describes a method implemented on a trading server that integrates data from market exchanges and currency exchanges to provide a unified trading experience ('863 Patent, col. 2:25-34). The system displays asset information, including valuation, in the trader's preferred currency by constantly updating it based on prevailing exchange rates, thereby allowing the trader to know the exact cost or profit of a transaction in their own currency ('863 Patent, col. 10:1-13).
• Technical Importance: The invention focuses on providing a user interface where an asset's valuation dynamically changes with the exchange rate, even if the asset's market price remains static, giving the trader a real-time view of value in their preferred currency ('863 Patent, col. 10:4-13).

Key Claims at a Glance

• The complaint asserts infringement of at least 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 from a trader.
  • Causing a client computer to display the asset in the preferred currency, where the asset's valuation changes in accordance with the prevailing exchange rate.
  • Conducting a transaction for the asset.
  • Receiving a settlement notification and executing the transaction with a calculated exchange rate to prevent uncertainty.
• 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,” issued Sep. 20, 2022

• Technology Synopsis: As a continuation in the same family, the ’930 Patent discloses a system and method for trading assets across different currencies. The technology centers on a trading server that accesses both market and currency exchanges to display asset costs in a trader's selected "first currency" while the asset itself is traded in a "second currency," and executes the final settlement using a real-time exchange rate to provide transactional certainty (’930 Patent, Abstract).
• Asserted Claims: The complaint asserts infringement of at least independent Claim 12 (Compl. ¶67).
• Accused Features: The complaint alleges that Defendant’s provision of "a trading server, such as the Defendant trading servers coupled to one or more currency exchange servers...and one or more market exchange servers" infringes the patent (Compl. ¶67).

III. The Accused Instrumentality

Product Identification

The "Accused Instrumentalities" are Defendant's "Gunbot" platforms and systems (Compl. ¶30).

Functionality and Market Context

Gunbot is an automated digital cryptocurrency trading platform that allows users to create and implement trading rules and strategies for use on "major crypto exchanges" (Compl. ¶¶3, 30). The complaint includes a screenshot from Defendant's website, which presents "Gunbot" as a "crypto trading bot" and lists "OFFICIAL PARTNERS" including Binance, Kraken, and KuCoin (Compl., p. 8). Plaintiff alleges that Defendant makes, sells, and controls the operation of this platform, which provides a "consolidated trading platform" for users (Compl. ¶¶30, 34).

IV. Analysis of Infringement Allegations

’107 Patent Infringement Allegations

Identified Points of Contention

• Technical Questions: A primary question is whether a single cryptocurrency exchange (e.g., Binance) can simultaneously function as both the "market exchange" (for trading crypto assets) and the "currency exchange" (for converting between crypto and fiat, or between two different cryptocurrencies) as those distinct entities are described in the patent’s "three-tier architecture" (’107 Patent, col. 2:25-28, Fig. 2A). The complaint alleges the trading servers are coupled to "one or more currency exchange servers, and one or more market exchange servers," which may suggest they are separate or that a single crypto exchange serves both roles (Compl. ¶35(i)).
• Scope Questions: The case may turn on whether the term "currency", as used in a 2007-priority patent that provides examples of fiat currencies like the U.S. Dollar and Japanese Yen, can be construed to read on digital assets like cryptocurrencies.

’863 Patent Infringement Allegations

Identified Points of Contention

• Pleading Sufficiency: The complaint's allegations for the ’863 Patent are substantially less detailed than for the ’107 Patent. The infringement theory in paragraph 51 appears to map only to the first element of Claim 1, raising the question of whether the complaint provides adequate notice for the remaining claim elements.
• Technical Questions: As with the ’107 Patent, the analysis will likely focus on how the Gunbot platform's architecture maps to the claimed "trading server", "currency exchange server", and "market exchange server" components.

V. Key Claim Terms for Construction

Term: "currency" / "preferred currency"

• Context and Importance: This term is critical because the patents were filed in an era of fiat currency trading, while the accused products operate in the world of cryptocurrency. The case’s applicability may depend on whether cryptocurrencies fall within the scope of the term "currency". Practitioners may focus on this term because the specification's examples are exclusively fiat currencies.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The claims do not define or limit "currency" to government-issued fiat currency, potentially allowing for any medium of exchange, including digital assets (’107 Patent, col. 8:45-col. 9:28).
  • Evidence for a Narrower Interpretation: The patent specification repeatedly uses traditional, sovereign currencies as its only examples, such as "US dollars," "Japanese yen," and "RMB" ('107 Patent, col. 1:41-48; col. 5:37-39). The abstract refers to facilitating "security transactions," a term often associated with traditional financial markets.

Term: "market exchange server" and "currency exchange server"

• Context and Importance: The patents describe a "three-tier architecture" that includes these two types of servers, which are depicted as separate components in Figure 2A (’107 Patent, Fig. 2A). The accused Gunbot platform, however, connects to integrated cryptocurrency exchanges that may perform both asset trading and currency conversion. The dispute will question whether a single entity can embody both claimed servers.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The claims require the trading server to be "coupled to" the respective exchange servers but do not explicitly require the servers to be hosted by separate, independent business entities (’107 Patent, col. 8:47-50).
  • Evidence for a Narrower Interpretation: The detailed description and Figure 2A illustrate the currency exchange (206), brokerage (208), and market exchange (210) as distinct architectural components, which may suggest they are intended to be functionally and/or physically separate (’107 Patent, col. 2:25-28; Fig. 2A).

VI. Other Allegations

• Indirect Infringement: The complaint alleges that Defendant induces infringement by providing the Accused Instrumentalities and advertising their use, thereby encouraging its customers to perform the patented methods (Compl. ¶¶41, 43, 57, 59, 73, 75).
• Willful Infringement: Willfulness is alleged based on Defendant’s continued infringement after receiving notice of the patents via the service of the complaint (Compl. ¶¶39, 55, 71). The complaint also alleges willful blindness, asserting on information and belief 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

1. A core issue will be one of definitional scope: can the term "currency", which is described in the 2007-priority patents using only examples of traditional fiat currency, be construed to encompass the cryptocurrencies traded on the accused Gunbot platform?
2. A second central issue will be one of structural mapping: does an integrated cryptocurrency exchange, which performs both asset trading and currency/token conversion, satisfy the patents' "market exchange" and "currency exchange" limitations, which the specification depicts as distinct tiers in its architecture?
3. An early procedural question may be one of pleading sufficiency: given the sparse infringement allegations for the '863 and '930 patents compared to the '107 patent, the court may need to determine if the complaint provides sufficient notice of the infringement theory for all asserted claims.