Intercurrency Software LLC v. 3commas Tech Ou

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Intercurrency Software LLC (Texas)
  • Defendant: 3Commas Technologies OÜ (Estonia)
  • Plaintiff’s Counsel: Garteiser Honea, PLLC
• Case Identification: 2:24-cv-00394, E.D. Tex., 05/30/2024
• Venue Allegations: Plaintiff alleges venue is proper because Defendant is subject to personal jurisdiction in the district, has regularly conducted business there, acts of infringement occurred there, and Defendant is not a resident of the United States.
• Core Dispute: Plaintiff alleges that Defendant’s automated cryptocurrency trading platform infringes patents related to performing financial transactions in a user’s preferred currency, which may differ from the asset’s market currency.
• Technical Context: The patents address the complexities of cross-currency financial trading, a key function in globalized markets, by integrating real-time currency conversion at the transactional level.
• Key Procedural History: The complaint notes that Plaintiff is the owner of the patents-in-suit by assignment. It also asserts that the patent claims are not abstract ideas and were allowed by patent examiners over relevant prior art, preemptively addressing potential patent eligibility challenges.

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 financial trading systems where investors dealing with assets in a foreign currency had to perform bulk currency conversions separately from their trades. This created uncertainty regarding the ultimate profit or loss, as the exchange rate could fluctuate between the time of the trade and the time of the currency conversion ('107 Patent, col. 1:53-60). The patent identifies this as a need for a system that "performs currency conversion on a transactional level" ('107 Patent, col. 1:63-65).
• The Patented Solution: The invention proposes a "consolidated trading platform" that integrates a brokerage, a market exchange, and a currency exchange ('107 Patent, col. 2:24-28). This "three-tier architecture" allows the platform to present all prices, market data, and transaction settlements to a trader in their own "preferred currency," thereby allowing the trader to know "exactly what he/she may end up with" at the moment of the transaction ('107 Patent, Abstract; ’107 Patent, col. 2:34-36).
• Technical Importance: This approach aimed to provide certainty and transparency in cross-currency trading by integrating real-time exchange rate data directly into the transaction workflow, effectively eliminating exchange rate risk at the point of trade execution ('107 Patent, col. 2:15-19).

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 includes determining a prevailing exchange rate and dynamically displaying all costs and fees in the 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 is configured to calculate the prevailing exchange rate from all available exchange rates "right before the transaction takes place" to prevent uncertainty.
  • Performing a currency conversion of the transaction proceeds from the market currency to the preferred currency using the calculated rate.

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, this patent addresses the same technical problem: the lack of transactional-level currency conversion in prior art trading systems, which introduced financial uncertainty for investors trading in non-native currencies (’863 Patent, col. 1:53-65).
• The Patented Solution: The invention describes a similar three-tier architecture (brokerage, market exchange, currency exchange) to present asset data and execute transactions in a user's preferred currency (’863 Patent, col. 2:25-34). The system obtains a prevailing exchange rate to display asset values in the preferred currency and to prevent uncertainty in cross-currency settlements (’863 Patent, Abstract).
• Technical Importance: The solution provides traders with a consolidated view of trading costs in their home currency, enabling more informed decisions by removing the risk associated with subsequent, separate currency conversion steps (’863 Patent, col. 2:34-36).

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 from a trader.
  • Causing a client computer to display the asset in the preferred currency, wherein the asset's valuation changes in accordance with a constantly updated prevailing exchange rate.
  • Conducting a transaction of the asset.
  • Receiving a settlement notification and executing the transaction with a calculated prevailing exchange rate obtained "right before the transaction" to prevent uncertainty.

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

• Technology Synopsis: This patent, from the same family as the '107 and '863 patents, describes a method and system for trading assets across different currencies. The technology focuses on a trading server that calculates and displays all transaction costs and fees in a trader's selected first currency, even when the asset trades in a second currency, by using a dynamically updated exchange rate to provide the trader with price certainty at the time of the transaction (’930 Patent, Abstract; col. 2:15-24).
• Asserted Claims: The complaint asserts independent claim 12 (Compl. ¶67).
• Accused Features: The complaint alleges that Defendant’s trading server, which is coupled to market and currency exchanges, infringes by providing a system for trading assets where costs are displayed and settled in a preferred currency (Compl. ¶67).

III. The Accused Instrumentality

Product Identification

The accused products and services are Defendant's "3Commas platforms and systems," including its website https://3commas.io and its "SmartTrade" feature, referred to collectively as the "Accused Instrumentalities" (Compl. ¶30).

Functionality and Market Context

The 3Commas platform is described as an "automated digital crypto currency trading" service that allows users to create automated trading rules and strategies for use with major crypto exchanges (Compl. ¶3, ¶30). The complaint includes a marketing screenshot from Defendant's website promoting "crypto trading bots" (Compl. p. 8). A second, more detailed screenshot depicts the "SmartTrade page," an interface showing components such as exchange and trading pair selection, a price chart, and an order book, which illustrates the platform's trading functionality (Compl. p. 8). The complaint alleges that Defendant generates "substantial financial revenues" from these instrumentalities (Compl. ¶34).

IV. Analysis of Infringement Allegations

’107 Patent Infringement Allegations

’863 Patent Infringement Allegations

The complaint alleges infringement of claim 1 of the ’863 Patent but does not provide a narrative breakdown of infringement for each claim element in the body of the complaint, instead referencing an unattached Exhibit A (Compl. ¶51). The complaint’s primary allegation is 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," which corresponds to the first element of the asserted claim (Compl. ¶51). The complaint does not provide sufficient detail for analysis of the remaining claim elements.

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" such as "stocks, bonds, options, [and] commodities" (’107 Patent, col. 2:20-23). A central dispute may arise over whether the term "asset" or "security" as used in the patent claims can be construed to read on the "digital crypto currency" traded on Defendant's platform (Compl. ¶3).
• Technical Questions: Claim 1 of the ’107 Patent requires the trading server to calculate a "prevailing exchange rate from all exchange rates obtained from the one or more currency exchange servers right before the transaction takes place." This raises the evidentiary question of whether the 3Commas platform actually sources rates from multiple distinct "currency exchange servers" and performs the calculation at this specific moment, as required to "prevent uncertainty."

V. Key Claim Terms for Construction

The Term: "asset"

• Context and Importance: The patents were filed before the widespread adoption of cryptocurrency and use examples from traditional finance. The applicability of the claims to the accused cryptocurrency trading platform hinges on the construction of this term.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification provides a non-limiting, exemplary list of what constitutes a "security" or "asset," including "stocks, bonds, options, commodities (e.g., oil, gold), futures/derivatives contracts," among others (’107 Patent, col. 2:20-23). Plaintiff may argue that cryptocurrencies fall within this broad definition, for example as a type of "commodity."
  • Evidence for a Narrower Interpretation: The specification repeatedly frames the invention in the context of traditional financial institutions and markets, such as "Charles Schwab," "NASDAQ," and the "NYSE" (’107 Patent, col. 1:28-40; col. 5:2-3). A party could argue that this context limits the scope of "asset" to traditional, centralized financial instruments, not decentralized digital currencies.

The Term: "calculate the prevailing exchange rate from all exchange rates obtained from the one or more currency exchange servers right before the transaction takes place"

• Context and Importance: This limitation (from claim 1 of the ’107 Patent) describes a specific technical operation at the core of the invention. Practitioners may focus on this term because the infringement analysis will depend on whether the accused system’s method for determining rates is functionally equivalent to this precise, multi-step process.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: A party may argue that the term should be interpreted functionally to cover any system that provides a firm, real-time exchange rate to the user at the moment of a trade, fulfilling the patent's goal of preventing "uncertainty in currency exchanges in another time" (’107 Patent, col. 9:20-22).
  • Evidence for a Narrower Interpretation: The plain language suggests a specific implementation: sourcing rates from multiple servers ("all exchange rates") and performing a new calculation at a precise moment ("right before"). A party could argue that a system using a single-source API or a slightly cached rate would not meet the literal requirements of this limitation.

VI. Other Allegations

Indirect Infringement

The complaint alleges inducement of infringement, asserting that Defendant has taken active steps such as "advertising an infringing use" which supports an intention for the accused product to be used in an infringing manner by its end-users (Compl. ¶43, ¶59, ¶75).

Willful Infringement

The complaint alleges willfulness based on knowledge acquired upon the filing and service of the complaint (Compl. ¶39, ¶55, ¶71). It also alleges willful blindness based on a purported "practice of not performing a review of the patent rights of others first for clearance," though no specific facts supporting this practice are provided (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 patents’ 2007 description of traditional financial instruments like stocks and commodities, be construed to cover the decentralized cryptocurrencies traded on the accused 3Commas platform?
• A key evidentiary question will be one of technical operation: does the accused platform’s method of determining and applying exchange rates meet the specific claim requirement of calculating a rate from "all exchange rates obtained" from multiple servers "right before the transaction takes place," or is there a fundamental mismatch in technical functionality?
• The complaint’s preemptive defense of patent eligibility under 35 U.S.C. § 101 suggests a foundational question for the court will be whether the claims are directed to an abstract financial process, and if so, whether the specified "three-tier architecture" provides the "inventive concept" required for patentability.