PTAB

IPR2024-01293

Bitsgap Holding Ou v. Intercurrency Software LLC

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Key Events
Petition
petition

1. Case Identification

2. Patent Overview

  • Title: Consolidated Trading Platform
  • Brief Description: The ’107 patent describes a three-tier electronic trading system that allows a trader to view asset prices and conduct transactions in a "preferred currency" that may differ from the asset's "market currency." The system purports to reduce uncertainty for traders by obtaining a "prevailing currency exchange rate" at the time of the transaction and using that rate for both displaying prices and settling the trade.

3. Grounds for Unpatentability

Ground 1: Obviousness over Calo, Rude, and Sellberg - Claims 19-25, 27-31, and 34-36 are obvious over Calo in view of Rude and Sellberg.

  • Prior Art Relied Upon: Calo (Application # 2002/0087454), Rude (Application # 2006/0095361), and Sellberg (Application # 2004/0236664).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that Calo and Rude collectively disclose all basic features of the challenged claims, including a consolidated trading platform with a three-tier architecture for cross-border securities trading. Calo taught a system that automatically places a foreign exchange order to convert a settlement amount from a market currency to a user's preferred currency. Rude similarly taught automatically converting and displaying foreign security price quotations in a trader's operating currency and settling trades using a forward or spot exchange rate. The combination of Calo and Rude allegedly provides the foundational trading system. Sellberg was added to explicitly teach using an updated exchange rate, preferably the "last exchange rate just prior to the submitting the order," to perform the transaction. This addresses the ’107 patent’s core concept of using a "prevailing exchange rate" to prevent uncertainty, a feature Petitioner argued was the basis for overcoming rejections during prosecution.
    • Motivation to Combine: A POSITA would combine Calo and Rude to leverage their respective teachings on cross-border trading and currency conversion to create a robust system. A POSITA would then incorporate Sellberg’s teaching of using an immediate, pre-transaction exchange rate to solve the known problem of currency fluctuation risk between order placement and settlement, which was a recognized issue in the art.
    • Expectation of Success: The combination involved applying known currency management techniques (Sellberg) to established electronic trading platforms (Calo, Rude) to achieve the predictable result of reduced currency risk.

Ground 2: Obviousness over Calo, Rude, and Szoc - Claims 19-25, 27-31, and 34-36 are obvious over Calo in view of Rude and Szoc.

  • Prior Art Relied Upon: Calo (Application # 2002/0087454), Rude (Application # 2006/0095361), and Szoc (Application # 2002/0023053).
  • Core Argument for this Ground:
    • Prior Art Mapping: This ground presented an alternative combination for the same claims, again using Calo and Rude as the base trading platform. Instead of Sellberg, Petitioner asserted Szoc to supply the teaching of using a current, locked-in exchange rate. Szoc disclosed a system for providing real-time foreign exchange information that allows a client to execute a transaction based on a favorable quote, with the transaction receiving the benefit of that rate as long as it has not expired. This, like Sellberg, taught the use of a "prevailing" real-time rate to eliminate uncertainty.
    • Motivation to Combine: The motivation was identical to Ground 1: to improve the existing trading platforms of Calo and Rude by incorporating a known solution for mitigating currency exchange risk. Szoc provided a clear method for locking in real-time rates, which a POSITA would have found desirable to integrate into a cross-border trading system to provide users with price certainty.
    • Expectation of Success: A POSITA would have reasonably expected to successfully integrate Szoc's real-time rate-locking feature into the trading architecture of Calo and Rude, as it was a straightforward application of known financial technology principles.

Ground 4: Obviousness over Calo, Rude, and Kidea - Claim 26 is obvious over Calo in view of Rude and Kidea.

  • Prior Art Relied Upon: Calo (Application # 2002/0087454), Rude (Application # 2006/0095361), and Kidea (Application # 2007/0005481).

  • Core Argument for this Ground:

    • Prior Art Mapping: This ground targeted claim 26, which adds the limitation of handling a partially filled order where currency conversion is performed only on the remaining, unfilled portion. Petitioner argued that Calo and Rude provided the underlying trading system capable of currency conversion. Kidea was introduced for its teaching of a graphical user interface that explicitly displays and updates historical filled order data separately from current unfilled order data. Petitioner contended that partial fills were a well-known occurrence in electronic trading.
    • Motivation to Combine: A POSITA would be motivated to add Kidea’s functionality for managing and displaying partial fills to the Calo-Rude platform to provide traders with standard, necessary information about their order status. It would have been a matter of common sense to only perform currency conversion on the portions of a transaction that required it (i.e., the cross-currency portions), which in the context of a partial fill would be the yet-to-be-executed remainder.
    • Expectation of Success: Integrating order status management for partial fills (Kidea) into a trading platform (Calo, Rude) was a routine and predictable modification.

  • Additional Grounds: Petitioner asserted an additional obviousness challenge for claims 32-33 based on Calo, Rude, (Sellberg or Szoc), and Davidowitz, which added teachings on continuously monitoring market conditions to trigger limit orders.

4. Key Claim Construction Positions

  • Petitioner proposed that for the purposes of the IPR, the term "prevailing currency exchange rate" should be construed as "a selected current rate that is not an FOREX average exchange rate."
  • This construction was based on arguments made by the Patent Owner during prosecution to distinguish prior art (specifically Rude) that was alleged to use only an "average" rate. Petitioner argued that Rude was misunderstood by the Examiner and did, in fact, disclose spot rates, but adopted this construction to show obviousness even under the Patent Owner's purported definition.

5. Arguments Regarding Discretionary Denial

  • Petitioner argued that discretionary denial under Fintiv is inapplicable.
  • The argument was based on Petitioners having made a Sotera stipulation, agreeing not to pursue the same grounds in the related district court litigation if the IPR is instituted.

6. Relief Requested

  • Petitioner requested institution of an inter partes review and cancellation of claims 19-36 of the ’107 patent as unpatentable.