GAIN Capital Holdings Inc v. OANDA Corp

1. Case Identification

• Case #: CBM2020-00022
• Patent #: 7,146,336
• Filed: September 15, 2020
• Petitioner(s): GAIN Capital Holdings, Inc.
• Patent Owner(s): OANDA Corporation
• Challenged Claims: 1-11

2. Patent Overview

• Title: System for Trading Currencies over a Computer Network
• Brief Description: The ’336 patent describes a system for currency trading implemented on a computer network. The system uses generic computer components, such as servers and a database, to automate longstanding financial practices like managing transactions, setting exchange rates, calculating interest, and managing trade orders.

3. Grounds for Unpatentability

Ground 1: Ineligibility under §101 - Claims 1-11 are directed to the abstract idea of currency trading.

• Prior Art Relied Upon: Petitioner did not assert obviousness grounds but instead relied on the Declaration of Bernard S. Donefer (an expert in electronic trading systems) and extensive documentary evidence detailing the state of the art in currency trading prior to the patent's effective filing date (March 8, 2001). This evidence was used to establish that the functions recited in the claims were conventional and well-known, both in manual and early electronic trading systems.
• Core Argument for this Ground: Petitioner argued that all challenged claims are patent-ineligible under 35 U.S.C. §101 based on the two-step framework from Alice Corp. v. CLS Bank.
  • Alice Step 1 (Abstract Idea): Petitioner contended that the claims are directed to the abstract idea of currency trading, a fundamental economic practice that has existed for centuries. The claims describe automating core trading functions, such as facilitating transactions, obtaining exchange rates, setting prices, calculating interest, managing orders, hedging, and monitoring margin. Petitioner argued that each claim, when viewed as a whole, is focused on this longstanding business practice rather than an improvement to computer technology itself. The use of a generic computer network was presented as merely a tool for performing the abstract financial concept.
  • Alice Step 2 (Inventive Concept): Petitioner asserted that the claims lack an inventive concept sufficient to transform the abstract idea into a patent-eligible application. The argument focused on the conventionality of the claimed components and their functions.
    • The "common elements" recited in the independent claims (a server front-end, a database, a transaction server, a rate server, and a pricing engine) were described as generic, off-the-shelf computer components performing their well-understood, routine functions. For example, the server front-end and database provide basic communication and storage, while the other servers perform the fundamental tasks of any currency dealer: managing transactions, obtaining external rates, and setting internal prices.
    • The additional limitations in each independent claim were also argued to be conventional business practices implemented on generic computer hardware. For claim 1, the "interest rate manager" simply automates the standard business practice of calculating and collecting interest. For claims 2-4, the "trade manager" comprising a "daemon" (a standard background computer process) merely automates the conventional function of monitoring and executing well-known order types (stop-loss, take-profit, limit orders), replicating the function of a human broker's order book.
    • Similarly, for claim 7, the "hedging engine" recites performing common calculations integral to the age-old business strategy of hedging risk. For claim 11, the "margin control manager" automates the routine practice of monitoring trader margin accounts and liquidating positions as necessary—a standard risk-management function in financial trading.
    • Petitioner concluded that the claims simply instruct the use of a generic computer to perform the abstract idea of currency trading faster or more efficiently, which does not constitute an inventive concept. The claims did not solve a problem unique to computer networks or improve the functioning of the computer itself.

4. Arguments Regarding Discretionary Denial

• Petitioner argued that discretionary denial under §325(d) would be inappropriate. While the patent was examined, Petitioner contended that the examiner did not have the benefit of the Supreme Court's Alice decision, which significantly clarified the framework for §101 analysis. Furthermore, the examiner was not presented with the extensive evidence and expert testimony submitted with the petition, which detailed why the recited computer functionality was merely the routine automation of conventional currency trading practices.
• Petitioner also asserted that denial based on parallel litigation would be improper. At the time of filing, the co-pending district court case was in its infancy, with pleadings not yet closed, no discovery conducted, and no trial date set. Petitioner argued that it had proceeded expeditiously and that a CBM review would be a more efficient and effective way to resolve the validity of the business method claims.

5. Relief Requested

• Petitioner requests that the Board institute a Covered Business Method (CBM) review and cancel claims 1-11 of the ’336 patent as unpatentable under 35 U.S.C. §101.