Intercurrency Software LLC v. Bitsgap Holding Ou

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Intercurrency Software LLC (Texas)
  • Defendant: Bitsgap Holding OU (Estonia)
  • Plaintiff’s Counsel: Garteiser Honea, PLLC
• Case Identification: 2:24-cv-00392, E.D. Tex., 05/30/2024
• Venue Allegations: Plaintiff alleges venue is proper because Defendant is a foreign entity not resident in the United States and is subject to personal jurisdiction in the district, thereby allowing suit in any judicial district.
• Core Dispute: Plaintiff alleges that Defendant’s cryptocurrency trading automation platform infringes three patents related to consolidated financial trading systems that allow users to conduct transactions in a preferred currency.
• Technical Context: The technology at issue addresses the financial uncertainty and complexity of trading assets denominated in a foreign currency by integrating currency conversion at the transactional level.
• Key Procedural History: The complaint notes that the patents-in-suit belong to a single family and have been cited in patents issued to other financial industry companies.

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 the problem faced by investors trading assets in a foreign currency. Because the asset transaction and the required currency exchange are typically separate events, fluctuating exchange rates create uncertainty about the final profit or loss of a trade (Compl. ¶15; ’107 Patent, col. 1:53-60).
• The Patented Solution: The invention proposes a consolidated trading platform integrating a brokerage, a market exchange, and a currency exchange into a "three-tier architecture" (’107 Patent, col. 2:24-33). This system allows a trader to view prices and execute transactions in a single "preferred currency," with the platform performing the currency conversion transactionally, thereby providing the trader with "certain knowledge" of the outcome (Compl. ¶16, ¶19; ’107 Patent, col. 1:61-67).
• Technical Importance: The technology aimed to remove a significant risk and friction point in international investing by providing price certainty through real-time, integrated currency conversion (Compl. ¶17; ’107 Patent, col. 2:15-19).

Key Claims at a Glance

• The complaint asserts independent Claim 1 (’107 Patent, col. 8:46-10:2). The complaint notes this is an exemplary claim (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.
  • Conducting a transaction of the asset by transmitting a request to a market exchange server.
  • Receiving a settlement notification when the transaction is performed according to user-set conditions, which includes the trading server calculating the prevailing exchange rate "right before the transaction takes place."
  • Performing a currency conversion of some or all 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 Sep. 15, 2020)

The Invention Explained

• Problem Addressed: As a continuation of the application leading to the ’107 Patent, this patent addresses the same core problem of uncertainty in cross-currency asset trading due to exchange rate fluctuations (’863 Patent, col. 1:59-67).
• The Patented Solution: This invention also describes a consolidated platform that displays asset prices and executes transactions in a user's preferred currency. The claims particularly emphasize causing a client computer to display an asset in the preferred currency, with costs and fees being "dynamically changed in accordance with the prevailing exchange rate" (’863 Patent, col. 9:1-10:39; Abstract).
• Technical Importance: The invention provides traders with a clear, real-time understanding of all costs associated with a transaction in their own currency, removing a key barrier to international trading (’863 Patent, col. 2:34-38).

Key Claims at a Glance

• The complaint asserts independent Claim 1 (’863 Patent, col. 8:56-9:21). The complaint notes this is an exemplary claim (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, which includes determining a prevailing exchange rate and displaying all costs and fees that are dynamically changed with that rate.
  • Conducting a transaction of the asset.
  • Receiving a settlement notification, where the server is configured to calculate the exchange rate "right before the transaction takes place" and execute the transaction.

U.S. Patent 11,449,930 - "Method and Apparatus for Trading Assets in Different Currencies" (Issued Sep. 20, 2022)

• Technology Synopsis: This patent, from the same family, discloses a system and method for trading assets across different currencies. The invention focuses on a trading server that calculates and displays the costs for an asset in a trader's selected "first currency" while the asset is traded in a "second currency," with the server calculating a new exchange rate immediately before the transaction to determine the final settlement, thereby preventing uncertainty (’930 Patent, Abstract, col. 10:11-65).
• Asserted Claims: The complaint asserts independent system Claim 12 as exemplary (Compl. ¶67).
• Accused Features: The complaint alleges that the Bitsgap platform, specifically its trading servers coupled to one or more currency and market exchange servers, infringes this patent (Compl. ¶67).

III. The Accused Instrumentality

Product Identification

• The accused products are the "Bitsgap platforms and systems," collectively referred to as the "Accused Instrumentalities" (Compl. ¶30).

Functionality and Market Context

• The Accused Instrumentalities constitute a "cryptocurrency trading automation platform" that enables users to create "automated trading rules and strategies for major crypto exchanges" (Compl. ¶30).
• A screenshot provided in the complaint shows Bitsgap marketing a "Smarter way to automate your crypto trading," offering tools like "crypto trading bots, algorithmic orders, portfolio management and free Demo mode" (Compl. p. 8).
• The platform is allegedly sold to end-users in the United States via the internet and generates "substantial financial revenues" for the Defendant (Compl. ¶4, ¶34).

IV. Analysis of Infringement Allegations

'107 Patent Infringement Allegations

'863 Patent Infringement Allegations

The complaint's infringement allegations for the ’863 Patent are presented with less specific detail than for the ’107 Patent. The complaint alleges that the Accused Instrumentalities meet the limitations of Claim 1 by, for example, 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. ¶51). The complaint does not provide a detailed, element-by-element breakdown of its infringement theory for this patent.

Identified Points of Contention

• Scope Questions: A central question may be whether the term "market exchange," as described in the patents with reference to traditional financial markets like NASDAQ (’107 Patent, col. 4:60), can be construed to read on the "major crypto exchanges" on which the accused platform operates (Compl. ¶30). Similarly, the court may need to determine if "cryptocurrency" falls within the scope of terms like "asset" or "securities" as used in the patents, which provide examples like stocks, bonds, and oil (’107 Patent, col. 2:19-23).
• Technical Questions: The claims require the trading server to calculate the prevailing exchange rate "right before the transaction takes place" to prevent uncertainty (’107 Patent, Claim 1). A key factual question will be whether the Bitsgap platform’s internal processes perform this function at the specific time required by the claims. The complaint's allegations on this point will likely require technical evidence obtained through discovery to substantiate.

V. Key Claim Terms for Construction

• The Term: "market exchange"

  • Context and Importance: This term's construction is critical because the patents were developed in the context of traditional finance, while the accused platform operates exclusively with cryptocurrency exchanges. The outcome of the case may depend on whether a "crypto exchange" is considered a "market exchange" under the patent's definition.
  • Intrinsic Evidence for a Broader Interpretation: The specification provides a broad list of "securities" and "assets" that can be traded, including stocks, commodities, and derivatives, suggesting the platform is not limited to a single type of exchange (’107 Patent, col. 2:19-23).
  • Intrinsic Evidence for a Narrower Interpretation: The specification’s concrete examples refer to traditional securities exchanges like the NYSE and NASDAQ (’107 Patent, col. 5:5-6). A defendant may argue this context limits the term to regulated, centralized financial exchanges and excludes the different structure of typical crypto exchanges.

• The Term: "right before the transaction takes place"

  • Context and Importance: This temporal limitation in claims of the ’107 and ’863 patents is central to the invention's goal of eliminating price uncertainty. Infringement will hinge on whether the accused system calculates the exchange rate at this specific, pre-transaction moment.
  • Intrinsic Evidence for Interpretation: The patent states this step is performed to "prevent uncertainty in currency exchanges in another time" (’107 Patent, col. 9:20-22). Practitioners may focus on this term because its interpretation will determine the precise sequence and timing of operations required for infringement. A party could argue it requires a specific, nearly instantaneous "fetch-and-execute" operation, whereas an opposing party might argue it means "functionally contemporaneous" to achieve the stated purpose.

VI. Other Allegations

• Indirect Infringement: The complaint alleges inducement to infringe all three patents. The factual basis for inducement includes Defendant's alleged advertising of an infringing use and its provision of a platform that directs users to perform the claimed methods (Compl. ¶¶ 40-43, 56-59, 72-75).
• Willful Infringement: Willfulness is alleged based on two theories. First, the complaint alleges that Defendant's infringement will be willful post-suit, as the filing of the complaint constitutes actual notice (Compl. ¶39, ¶55, ¶71). Second, it alleges pre-suit "willful blindness" based on Defendant's purported "practice of not performing a review of the patent rights of others" before launching its services (Compl. ¶44, ¶60, ¶76).

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

• A core issue will be one of definitional scope: can terms like "market exchange" and "asset", which are rooted in the 2007-era context of traditional finance (stocks, fiat currencies), be construed to cover the modern cryptocurrency exchanges and digital assets on which the accused Bitsgap platform operates? The patentability of the inventions was premised on solving problems in a specific technological environment, and the court will have to decide if that scope extends to the accused environment.
• A second central issue will be an evidentiary and technical question: does the accused Bitsgap platform's internal architecture perform the specific, time-sensitive process required by the claims? Specifically, Plaintiff must provide evidence that the platform calculates a prevailing exchange rate "right before the transaction takes place" for the express purpose of locking in a price for the user, a key functional limitation of the asserted claims.