Intercurrency Software LLC v. Cryptohopper BV

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Intercurrency Software LLC (Texas)
  • Defendant: Cryptohopper BV (Netherlands)
  • Plaintiff’s Counsel: Garteiser Honea, PLLC
• Case Identification: 2:24-cv-00393, E.D. Tex., 05/30/2024
• Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendant is subject to personal jurisdiction in the district, regularly conducts business there, and is not a resident of the United States.
• Core Dispute: Plaintiff alleges that Defendant’s automated cryptocurrency trading platform infringes patents related to consolidated financial trading systems that display prices and execute transactions in a user's preferred currency.
• Technical Context: The technology addresses the problem of exchange rate uncertainty in cross-border or cross-currency financial transactions by integrating real-time currency conversion into the trading process.
• Key Procedural History: The complaint does not mention any prior litigation, inter partes review proceedings, or licensing history. It does note that the patents-in-suit were allowed by patent examiners after considering relevant prior art, arguing for their validity and patent eligibility.

Case Timeline

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

U.S. Patent No. 10,062,107 - “Consolidated Trading Platform” (Issued Aug. 28, 2018)

The Invention Explained

• Problem Addressed: The patent describes a problem in prior art trading systems where investors trading assets in a foreign currency faced uncertainty regarding their ultimate profit or loss (Compl. ¶15; ’107 Patent, col. 1:53-60). This was because the currency conversion was not performed "at a transactional level," meaning the exchange rate could fluctuate between the time of the trade and the time of currency settlement (Compl. ¶16; ’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 into a "three-tier architecture" (’107 Patent, col. 2:24-28). This platform presents all prices, data, and settlements in a trader's preferred currency, allowing a trader to "always know[] exactly what he/she may end up with a transaction of an asset" (Compl. ¶19; ’107 Patent, col. 2:33-35).
• Technical Importance: This approach aimed to eliminate the risk and uncertainty associated with exchange rate fluctuations at the moment a trading decision is made (Compl. ¶16; ’107 Patent, col. 1:61-67).

Key Claims at a Glance

• The complaint asserts independent Claim 1 as exemplary (Compl. ¶35).
• The essential elements of Claim 1 include:
  • A method 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 the asset 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, wherein the trading server is configured to calculate a prevailing exchange rate "right before the transaction takes place" and execute the transaction with that calculated rate to "prevent uncertainty in currency exchanges in another time."
  • Performing a currency conversion of some or all of the transaction 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 Sep. 15, 2020)

The Invention Explained

• Problem Addressed: As a continuation of the application leading to the ’107 Patent, the ’863 Patent addresses the same foundational problem of transactional uncertainty caused by separate securities trading and currency conversion processes (’863 Patent, col. 1:50-60).
• The Patented Solution: This patent also describes a method for trading in a preferred currency. A key disclosed feature is the dynamic display of an asset's value, where the "valuation of the asset in the preferred currency changes in accordance with the prevailing exchange rate updated constantly even when a market value of the asset remains unchanged" (’863 Patent, col. 8:58-63). This provides the trader with a continuous, real-time valuation in their local currency.
• Technical Importance: The invention provides a constantly updated view of an asset's value in the trader's own currency, accounting for both asset price and exchange rate fluctuations in real time, thereby enhancing the information available for making trading decisions (’863 Patent, Abstract).

Key Claims at a Glance

• The complaint asserts independent Claim 1 as exemplary (Compl. ¶51).
• The essential elements of Claim 1 include:
  • A method for trading an asset by 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 with the prevailing exchange rate even if the market value is static.
  • Displaying all costs and fees in the preferred currency.
  • Conducting a transaction of the asset.
  • Receiving a settlement notification after executing the transaction with a calculated prevailing exchange rate obtained "right before the transaction takes place."

Multi-Patent Capsule: U.S. Patent No. 11,449,930 - “Method and Apparatus for Trading Assets in Different Currencies” (Issued Sep. 20, 2022)

• Technology Synopsis: The ’930 Patent, also in the same family, describes a system and method for trading assets across different currencies. The claims focus on displaying costs and fees in a first (preferred) currency and, upon receiving a trade instruction, determining a prevailing exchange rate "again" or "right before" the transaction occurs to execute the trade, ensuring the final settlement reflects the most current rate and is not identical to the initially displayed costs (’930 Patent, col. 10:55-68).
• Asserted Claims: The complaint asserts independent system Claim 12 as exemplary (Compl. ¶67).
• Accused Features: The complaint alleges that Defendant's provision of a trading server coupled to currency and market exchange servers infringes the ’930 Patent (Compl. ¶67).

III. The Accused Instrumentality

• Product Identification: The "Accused instrumentalities" are Defendant's "Cryptohopper platforms and systems" (Compl. ¶30).
• Functionality and Market Context: The Cryptohopper platform provides "automated digital crypto currency trading" and allows users to "create automated trading rules and strategies for major crypto exchanges" (Compl. ¶30). A screenshot from Defendant's website shows the Cryptohopper trading interface, which displays asset pairs (e.g., ETH/USDT), profit percentages, and a trading chart (Compl. p. 8). The complaint alleges Defendant promotes the platform as the "world's most customizable crypto trading bot" (Compl. p. 8).

IV. Analysis of Infringement Allegations

’107 Patent Infringement Allegations

’863 Patent Infringement Allegations

The complaint alleges that Defendant infringes at least Claim 1 of the ’863 Patent (Compl. ¶51). However, beyond alleging that Defendant provides a trading server coupled to currency and market exchange servers, the complaint does not provide a detailed, element-by-element breakdown of its infringement theory for this patent sufficient to construct a claim chart.

• Identified Points of Contention:
  • Scope Questions: The patents-in-suit, with a 2007 priority date, describe the invention in the context of traditional financial "securities" and "assets" like stocks, bonds, and commodities (’107 Patent, col. 2:19-24). The accused product is a "crypto trading bot" (Compl. p. 8). This raises the question of whether the term "asset," as understood and described in the patents, can be construed to cover modern cryptocurrencies.
  • Technical Questions: Claim 1 of the ’107 Patent requires a specific function: calculating a prevailing exchange rate "right before the transaction takes place" and using that rate to execute the transaction specifically "to prevent uncertainty." A key technical question will be what evidence demonstrates that the accused platform performs this precise just-in-time calculation and execution, as opposed to, for example, displaying an indicative rate where the final settlement rate may differ.

V. Key Claim Terms for Construction

The Term: "asset" / "security"

• Context and Importance: The construction of this term is critical because the patents’ specifications primarily list traditional financial instruments (’107 Patent, col. 2:19-24), while the accused products exclusively trade cryptocurrencies (Compl. ¶30). The outcome of the case may depend on whether cryptocurrencies, which rose to prominence after the patents' priority date, fall within the scope of these terms.
• Intrinsic Evidence for a Broader Interpretation: The specification states that securities "include, but are not limited to, a wide array of electronically traded financial assets" (’107 Patent, col. 2:19-21), language that may support an interpretation covering newly developed types of digital financial assets.
• Intrinsic Evidence for a Narrower Interpretation: The specification’s exemplary list consists entirely of traditional financial instruments (e.g., "stocks, bonds, options, commodities," etc.) (’107 Patent, col. 2:21-24). This context may support an interpretation that limits the scope of "asset" to the types of instruments contemplated by the inventor at the time of filing.

The Term: "executes the transaction with the calculated prevailing exchange rate... to prevent uncertainty in currency exchanges in another time"

• Context and Importance: This phrase recites a functional outcome that is central to the claimed invention. Infringement will depend on whether the accused system achieves this specific result. Practitioners may focus on this term because it links the calculation of the exchange rate directly to the execution of the trade for the express purpose of preventing later uncertainty.
• Intrinsic Evidence for a Broader Interpretation: This language could be interpreted to cover any system that provides a firm, locked-in exchange rate at the moment of trade execution, distinguishing it from older systems where settlement and currency conversion occurred at different times with different rates (’107 Patent, col. 1:53-60).
• Intrinsic Evidence for a Narrower Interpretation: The phrase could be construed to require the complete elimination of exchange rate risk or slippage at the transactional level. If the accused system uses a rate that is merely indicative or if there is a possibility of a different final settlement rate, it may not meet the "prevent uncertainty" limitation.

VI. Other Allegations

• Indirect Infringement: The complaint alleges inducement of infringement for all three patents, asserting that Defendant has taken "active steps to induce infringement, such as advertising an infringing use" and that its advertising encourages use of the accused products in an infringing manner (Compl. ¶¶43, 59, 75).
• Willful Infringement: The complaint alleges willfulness based on post-suit notice for all patents, stating that infringement "will now be willful through the filing and service of this Complaint" (Compl. ¶¶39, 55, 71). It further alleges willful blindness, claiming Defendant has a "practice of not performing a review of the patent rights of others first for clearance" before launching 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," rooted in the 2007-priority patents' context of traditional financial instruments like stocks and commodities, be construed to cover the cryptocurrencies traded on the accused platform?
• A key evidentiary question will concern functional operation: does the accused Cryptohopper platform's currency conversion system perform the specific, multi-step function of calculating a prevailing exchange rate "right before the transaction" and executing with that rate to "prevent uncertainty" as required by the claims, or is there a material difference in its technical operation and the resulting transactional finality?
• A third question relates to patent eligibility: given that the patents relate to methods of conducting financial transactions on a computer, the defendant may raise challenges under 35 U.S.C. § 101, questioning whether the claims are directed to an abstract idea without a sufficient inventive concept, an issue the plaintiff preemptively addresses in the complaint (Compl. ¶¶22-23).