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Tag Archives: Trading Technologies

Clarified Claim Construction Precludes Summary Judgment

Posted in Claim Construction, Summary Judgment

Trading Techs. Int’l, Inc. v. CQG, Inc., No. 05 C 4811, Slip Op. (N.D. Ill. Dec. 22, 2014) (Coleman, J.).

Judge Coleman denied defendants’ (collectively “CQG” motion for summary judgment of noninfringement in this patent case involving futures trading software.  For more on plaintiff Trading Technologies’ (“TT”) various cases, click here.

CQG argued that TT could not meet its burden of proving infringement because TT did not identify a manual recentering command in CQG’s accused products.  The Court previously adopted Judge Moran’s claim construction of “static display of prices” which had been affirmed by the Federal Circuit:

[A] display of prices comprising price levels that do not change positions unless a manual re-centering command is received.

The Court then clarified its construction of “static”:

The proper construction of the term “static” is that price levels will not change unless a manual re-centering or repositioning command is entered.  [(Dkt. 826 at 3)].  This means that “static” excludes automatic re-centering and repositioning, but includes systems where the prices never move or [are] repositioned or recentered by manual command.

Based upon the clarification, “static” did not require a manual re-centering command.  Because a manual re-centering command is not required by the claims, the absence of the command alone did not warrant summary judgment.  The Court also denied TT’s request for attorney’s fees for responding to the motion.

Trading Technologies: Federal Circuit Claim Constructions are Binding

Posted in Claim Construction

Trading Techs. Int’l, Inc. v. CQG, Inc., No. 05 C 4811, Slip Op. (N.D. Ill.) (Coleman, J.).

Judge Coleman granted plaintiff Trading Technologies’ (“TT”) motion to terminate Markman proceedings in this patent case involving commodities trading software — click here for much more on this case in the Blog’s archives).  Defendants (collectively “CQG”) sought construction of numerous terms, after having participated in the prior action brought against former defendant eSpeed which was ultimately appealed to the Federal Circuit.  The Court held as follows:

  • The Court declined to construe the “static limitation” terms.  In the prior case, Judge Moran construed “static limitation” and that construction was reviewed by the Federal Circuit.  Because the Federal Circuit decision was binding upon the Court and because CQG had fully participated in that proceeding, the Court would not further construe these terms.
  • The Court also declined to construe the “manual re-centering” terms.  These terms appear not in the claims, but in Judge Moran’s construction of the static limitation terms.  The Court, therefore, declined to construe them for the same reasons that it would not further construe the static limitation terms.
  • The Court declined to construe “single action” because it too had already been construed by the Federal Circuit.

Finally, the Court declined to construe “in response … to sending” because the term did not appear in the claims, but in the Federal Circuit’s construction of the claims.  The constructions of claim terms do not warrant construction.

Trading Technologies: New Expert Opinions Doomed by Lack of Inclusion in LPR Final Contentions

Posted in Experts, Local Rules

The Court also struck some, but not all, of the experts’ opinions based upon trader usage. Trading Techs. Int’l, Inc. v. CQG, Inc., No. 05 C 4811, Slip Op. (N.D. Ill. Sep. 10, 2014) (Coleman, J.).

Judge Coleman granted in part and denied in part defendants’ (collectively “CQG”) motion to strike portions of plaintiff Trading Technologies’ (“TT”) expert reports that allegedly sought to introduce theories and analysis not contained in TT’s Final Infringement Contentions (“FIC”), which were tendered in November 2013. 

For certain independent claims, TT failed to supplement its FIC with manual re-centering elements as required by the Federal Circuit’s and the Court’s claim constructions.  It was not enough that dependent claims contained an identification of the manual re-centering elements in the accused products and that the “new” arguments for the independent claims were of the same scope.  The Court, therefore, struck TT’s experts new opinions as to those limitations.

TT did, however, sufficiently disclose its argument regarding modifying .ini files, even though in its FIC it refers to changing .ini files instead of modifying them.  The Court, therefore, denied the motion as to those theories. 

TT did not sufficiently disclose its copying arguments related to willfulness.  So, those arguments were struck.  TT was, however, allowed to have its experts testify as to certain deficiencies in CQG’s noninfringement opinion letters, although not that the letters were a basis for willful infringement.

The Court struck TT’s doctrine of equivalents theory regarding disabling the Market Window because it was not disclosed in the FIC.  TT’s argument regarding the state of the DOM Grid, however, was merely a refinement of an argument already in TT’s FIC.  So, the arguments were allowed.  The Court also struck an argument based upon the use of a ChartTrader and Price Hold features together because it was not sufficiently explained.

The Court also struck some, but not all, of the experts’ opinions based upon trader usage.


Court Does Not Dismiss “Me Too” Patent Counterclaims

Posted in Pleading Requirements

Trading Techs. Int’l., v. CQG, No. 05 C 4811, Slip Op. (N.D. Ill. Oct. 31, 2012) (Coleman, J.).

Judge Coleman granted in part plaintiff Trading Technologies’ (“TT”) Fed. R. Civ. P. 12(b)(6) motion to dismiss defendant CQG’s affirmative defenses and declaratory judgment counterclaim.  The Court dismissed CQG’s bare-bones defenses which stated in their entirety:

  •  “Plaintiff’s claims are barred by the doctrines of estoppels, acquiescence, implied license, and/or unclean hands.”
  • “Plaintiff is not entitled to any damages for the time period that it was not in compliance with the marking requirements under 35 U.S.C. § 287.”

The Court, however, gave CQG twenty-one days to amend the defenses to include sufficient factual support.

The Court denied TT’s motion to dismiss CQG’s declaratory judgment counterclaims as redundant.  While some judges in the Northern District dismiss such claims, the Court held that CQG’s counterclaims would allow the Court to retain jurisdiction if TT dismissed its claims and, therefore, were not redundant.

Patent Marking Based Lanham Act Claims Require Showing of Bad Faith

Posted in Pleading Requirements

GL Trade Ams., Inc. v. Trading Techs Int’l., Inc., No. 11 C 1558, Slip Op. (N.D. Ill. Jan. 23, 2012) (Holderman, C.J.).

Judge Holderman granted defendant Trading Technologies’ (“TT”) Fed. R. Civ. P. 12(b)(6) and 9(b) motion to dismiss plaintiff GL Trade Americas’ (“GL”) false advertising, unfair competition and deceptive trade practices claims based upon allegedly misrepresenting the scope of TT’s patents.  GL alleged that TT falsely and misleadingly caused others to believe that its patents covered electronic trading software with automatic recentering functionality, even after Judge Moran held that TT’s patents did not cover automatic recentering.

Preemption by the Patent Act

TT argued that GL’s claims were preempted by the marking provisions of the Patent Act.  But the Court held that the Lanham Act claims were not preempted because they required an additional showing of bad faith.

Allegations of Bad Faith

 GL contended that it sufficiently pled bad faith, without using the words bad faith, by alleging that TT knew the scope of its patents, but despite that marked its products incorporating automatic recentering with its patents.  Noting that patent marking allowed for “[s]ome inexactness”, the Court held that it was legally plausible for TT to believe that its accused produts were coverd by the patents.  And the Court found no support for the proposition that a patent holder must notify users of which components in a program were covered by patents and which were not.  As such, it was enough that a single mode of the software package did not have the patented feature, and TT was not required to identify to the user which aspects might read on the patents and which might not.  Because GL had not pled bad faith, both its Lanham Act and deceptive trade practices act claims were dismissed.

** For much more on this case and related cases, check out the Blog’s archives.




Prosecution History Estoppel Flows to Progeny

Posted in Summary Judgment

Trading Techs. Int’l., Inc. v. BCG Partners, Inc., No. 10 C 715 (Consolidated), Slip Op. (N.D. Ill. Feb. 9, 2012) (Kendall, J.).

Judge Kendall decided the parties’ cross-motions for summary judgment in plaintiff Trading Technologies’ (“TT”) patent infringement case involving futures trading software.  The Court agreed to decide isolated issues, including claim construction, ahead of schedule to expedite overall case resolution.  The Court made the following key rulings:

  • The TT claims were not invalid for lack of written description based upon the use of a default quantity.  The patent referenced a default quantity, and a user inputting that quantity was also described.   
  • The Court granted defendant’s motion finding that any claims of TT’s ‘411 patent that sought to cover automatically varying price axes would not be supported by the specifications and would be invalid.
  • The prosecution history, estoppel from an earlier patent as to the “static price axing” flowed to all of the progeny of that patent.

Patent Act Does Not Preempt Patent-Related Lanham Act Claims

Posted in Legal News

GL Trade Ams., Inc. v. Trading Techs. Int’l., Inc., No. 11 C 1558, Slip Op. (N.D. Ill. Jan. 23, 2012) (Holderman, C. J.).

Judge Holderman granted defendant Trading Technologies’ (“TT”) Fed. R. Civ. P. 12(b)(6) and 9(b) motion to dismiss plaintiff GL Trade’s false advertising, unfair competition and deceptive trade practices case alleging that TT misrepresented the scope of its patents. Initially, GL Trade’s Lanham Act false advertising and unfair competition claims were not preempted by patent law. The Federal Circuit held that Lanham Act unfair competition claims based upon marketplace statements were not preempted because the Lanham Act claim required a showing of bad faith. And the allegedly false patent markings were marketplace statements. As a matter of law, TT’s actions could not have been bad faith, although what constitutes bad faith in patent-related communications was “somewhat nebulous.” TT’s belief that the marked products read on the marked patents was legally plausible. GL Trade, therefore, could not have acted in bad faith. Similarly, it was legally plausible for TT to believe that it could mark covered products even when they were not being used in a patented way.

Trading Technologies: Party Cannot Waive FRE 408 Protection As to its Communications

Posted in Settlement

Trading Techs. Int’l., Inc. v. BCG Partners, Inc., No. 10 C 715 (Consolidated), Slip Op. (N.D. Ill. Sep. 2, 2011) (Kendall, J.). 

Judge Kendall granted defendants’ motion to strike references to settlement discussions in plaintiff Trading Technologies ("TT") complaints, and denied the parties’ various motions to dismiss each others pleadings in their patent cases involving trading software. TT used various of its settlement documents to allege certain defendants’ actual knowledge of both TT’s patents and defendants’ alleged infringement of those patents. TT acknowledged that the documents were settlement documents. The Court noted that TT could not waive FRE 408 even for its own documents and held that TT’s attempted use was improper pursuant to FRE 408. TT used the documents to prove two elements of liability for indirect infringement – knowledge of the patents and the alleged infringement. The Court, therefore, struck all references to the documents pursuant to Fed. R. Civ. P. 12(b). The Court denied defendants’ motions to dismiss TT’s indirect infringement claims. Even after striking the settlement documents, TT pled sufficient facts:

  • TT made a general allegation of knowledge which was not alone sufficient, but was adequately supported. 
  • TT alleged that each defendant competed with TT. It was "not a stretch" to presume that TT’s competitors would be watching TT’s patents. 
  • TT alleged that defendants were aware of the patents through various suits. The Court voted conflicting case law regarding whether these suits could create notice. 
  • TT denied that defendants encouraged infringement by advertising allegedly infringing products and encouraging them to infringe by using the software products. 

The Court denied TT’s motion to strike defendants’ noninfringement and invalidity affirmative defenses and then related counterclaims calling the motions a "waste of time":

  • The defendants’ bare-bones affirmative defenses were consistent with standard patent litigation practice and put TT on notice.
  • The defenses were also consistent with the Local Patent Rules which require more detailed allegations early in discovery. See LPR 2.3.
  • TT’s affirmative defenses as to one defendant were "really identical" to those TT sought to strike.
  • Defendant had a right to maintain their declaratory judgment counterclaim for findings of noninfringement and invalidity.

Second Suit on Different Patents Not Precluded

Posted in Summary Judgment

Trading Techs. Int’l., Inc. v. BCG Partners, Inc., No. 10 C 715 (Consolidated), Slip Op. (N.D. Ill. Jul. 26, 2011) (Kendall, J.).

Judge Kendall denied the SunGuard defendants’ (collectively "SunGuard") summary judgment motion arguing that plaintiff Trading Technologies ("TT") second suit against the same SunGuard products should be dismissed based upon claim splitting or claim preclusion. There is much more on this case and the related cases in the Blog’s archives. The parties and the accused products were the same in both cases (filed in 2005 and 2010, respectively), but the patents were different. The Federal Circuit has held that suits based upon different patents involving similar inventions are not the same claims because each patent covered a separate invention. Kearns v. General Motors Corp., 94 F. 3d 1553, 1555 (Fed. Cir. 1996). Because the TT asserted different patents in the two suits, there was no preclusion. It did not matter that that TT could have arguably amended its first suit to add some or all of the later asserted patents.

The Court also deemed TT’s Local Rule 56.1 additional statements of fact admitted because SunGuard failed to respond to them.

Patent Complaint Must Identify Accused Product at Least Generally

Posted in Pleading Requirements

Trading Techs. Int’l., Inc. v. BCG Partners, Inc., No. 10 C 715, Slip Op. (N.D. Ill. May 5, 2011) (Kendall, J.).

Judge Kendall granted the FuturePath defendants’ and denied the SunGuard defendants’ Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff Trading Technologies’ ("TT") patent claims regarding trading software.

FuturePath:  The Court dismissed TT’s direct infringement claims against FuturePath because TT did not accuse a specific FuturePath product or even category of product. TT’s reference to unspecified "products" did not meet the Twomby or Iqbal standards, nor did it meet the Federal Circuit’s requirements in McZel v. Spring Nextel Corp., 501 F. 3d 1354 (Fed. Cir. 2007). Identification of an accused product in TT’s briefing and reference to FuturePath’s website in TT’s indirect infringement claims were insufficient.

TT did not allege that FuturePath had knowledge of TT’s patents. Without an allegation of knowledge, TT’s claims were deficient. The Court, therefore, dismissed all of TT’s claims against FuturePath with leave to replead correcting the deficiencies.

SunGuard:  TT alleged that SunGuard had constructive knowledge of TT’s patents, but not actual knowledge. Constructive knowledge was sufficient to maintain TT’s claims, regardless of whether the Federal Circuit might later hold constructive knowledge insufficient.

Exclusion of Lead Trial Counsel as Trial Witness Premature Until Trial Witnesses are Identified

Posted in Trial

Trading Techs. Int’l, Inc. v. BCG Partners, Inc., No. 10 C 715 (N.D. Ill. May 5, 2011) (Kendall, J.).

Judge Kendall denied defendant GL Trade Americas’ ("GL") motion to disqualify plaintiff Trading Technologies’ ("TT") lead litigation counsel and in-house counsel Borsand, without prejudice to reconsider whether Borsand should be excluded from testifying should he seek to testify. GL alleged that Borsand received confidential information when TT briefly retained a European law firm to represent it in patent prosecution matters without realizing that the firm represented an entity working on behalf of GL. Borsand only had two contacts with the firm, and it was reasonable that during those two contacts no confidential information was transferred to Borsand. As such, the drastic measure of disqualification was not warranted.

GL’s request that Borsand be excluded as a trial witness because of his role as lead trial counsel was denied as premature with leave to refile at a later date. The Court could not determine what discovery would show, what facts would be disputed at trial or whether Borsand would even testify at trial.

Trading Technologies: Court Quashes Subpoena

Posted in Discovery

Rosenthal Collins Group, LLC v. Trading Techs. Int’l., Inc., No. 05 C 4088, Slip Op. (N.D. Ill. Jul. 19, 2011) (Coleman, J.).

Judge Coleman granted declaratory judgment plaintiff Rosenthal Collins Group’s ("RCG") motion for protective order and to quash third party subpoenas as to third party CQG. The subpoenas sought information regarding RCG’s use of CQG’s trading software. The Court previously entered judgment against RCE and the only issue left in the case is a January 23, 2012 damages trial. But the judgment and the damages trial were limited to RCG’s use of its software, not other third parties that have not yet been held to infringe, such as CQG’s software.

Court Upholds $1M Sanction for Fabricated Prior Art

Posted in Discovery

Rosenthal Collins Group, LLC v. Trading Techs. Int’l., Inc., No. 05 C 4088, Slip Op. (N.D. Ill. June 1, 2011) (Coleman, J.).

Judge Coleman denied plaintiff Rosenthal Collins Group’s ("RCG") motion to reconsider or clarify the Court’s February 23, 2011 Order entering defendants judgment in favor of declaratory judgment defendant Trading Technologies ("TT") and sanctioning RCG $1 million. While the discovery misconduct – which the Court described as "attempted fraud" – related to invalidity, it was appropriate to enter default judgment as to infringement because TT’s infringement case would have been "futile" if the "fabricated" evidence had been successfully used to invalidate the patents. Furthermore, RCG should not be allowed to benefit from the thwarting of its misconduct.

Finally, the Court’s sanctions were not criminal, they were made pursuant to Fed. R. Civ. P. 37 and the Court’s inherent powers.

Trading Technologies: Settlement and Consent Judgment

Posted in Settlement

Trading Techs. Int’l., Inc. v. TradeHelm, Inc., No. 10 C. 931, Slip Op. (N.D. Ill. May 2011) (Kendall, J.).

Judge Kendall entered the parties – Trading Technologies ("TT") and TradeHelm – agreed consent order, as part of their settlement in this futures trading software – there is much more on this and related cases in the Blog’s archives case. The parties agreed as follows:

  1. TT’s patent infringement claims as to its ‘999 and ‘056 patents were dismissed.
  2. TradeHelm admitted infringement as to TT’s ‘411, ‘768, ‘382 and ‘992 patents, but not the ‘056 and ‘999 patent-in-suit.
  3. TradeHelm admitted validity and enforceability of the ‘304, ‘132, ‘411, ‘768, ‘382 and ‘996 patents, but again not the ‘056 or the ‘999 patents-in-suit.
  4. TradeHelm was permanently enjoined from infringing, unless TT permitted it, the ‘132, ‘304, ‘411, ‘768, ‘382 and ‘996 patents. But again, not the ‘056 and ‘999 patents-in-suit.

Trading Technologies: Court Maintains Existing Protective Order

Posted in Discovery

Trading Techs., Int’l, Inc. v. BGC Partners, Inc., No. 10 C 715 (Consolidated Cases), Slip Op. (N.D. Ill. Apr. 22, 2011) (Schenkier, Mag. J.).

Judge Schenkier ruled upon various proposed modifications to the 2006 Protective Order in the twelve consolidated 2010 cases. Judge Moran entered the governing protective in 2005, and it has stood since with some revisions. The key rulings included:

The Court denied various proposals to limit plaintiff Trading Technologies’ ("TT") in-house counsel Steve Borsand’s access to technical documents. While there was some risk of inadvertent disclosure because Borsand is involved in strategic decisions as to the scope of patent protection, the risk was small compared to the harm TT would suffer if it lost Borsand, who had been active in these litigations since 2003.

The Court denied efforts to expand the scope of the patent prosecution bar, limiting counsel from prosecuting related patents for a year after the litigation ended. Defendants’ proposed expansion would have limited counsel from prosecuting in completely unrelated areas of trading software technologies. And the current bar balanced protecting the parties against the livelihood of counsel well.

The Court denied to add an additional level of protection for source code or to add additional protections for source code. The Court characterized the proposed protections as "elaborate," "extensive" and "labyrinthian."

The Court held that co-defendants should produce their confidential information to each other. To do otherwise, would limit the value of the case consolidation. And it was unnecessary to limit production because the Protective Order provided sufficient protections for the co-defendants just as it did for information exchanged between TT and a defendant.

Parties were allowed to add additional in-house counsel to the Protective Order, so long as they met the same criteria that Borsand met for TT.

The Court modified the Protective Order to include a specific method for challenging confidentiality designations made pursuant to the Protective Order.

Trading Technologies: Court Grants Limited Jurisdictional Discovery

Posted in Jurisdiction

Trading Techs. Int.’l, Inc. v. BCG Partners, Inc., No. 10 C. 715 (Consolidated), Slip Op. (N.D. Ill. Mar. 28, 2011) (Kendall, J.).

Judge Kendall denied without prejudice defendant’s (collectively "BCG") motion to dismiss for lack of personal jurisdiction. BCG argued that its named entities were holding companies without operational responsibility, and that none had officers in Illinois. Plaintiff Trading Technologies ("TT"), however, produced evidence that one or more of the BCG entities had Illinois officers in Illinois for the purposes of selling the accused eSpeed software. Furthermore, certain government filings suggested that one or more of the BCG entities were operational entities. The Court, therefore, denied BCG’s motion with leave to refile after the parties completed limited jurisdictional discovery and TT replead to the extent it felt necessary.

Trading Technologies: Final Judgment Amended to Include Monetary Damages

Posted in Trial

Trading Techs. Int’l., Inc. v. eSpeed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. Mar. 29, 2011) (Dow, J.).

Judge Dow amended the final judgment in this case to reflect the jury verdict and post-remittitur damages award of about $2.5M — go to the Blog’s archives for much more on this case and related cases. The Court also, after a de novo review, adopted Judge Schenkier’s report and recommendation on the motion. Plaintiff Trading Technologies ("TT") sought to amend the Court’s final judgment, entered by the late Judge Moran, pursuant to Fed. R. Civ. P. 59(e) or 60(a), to reflect the damages award, and sought its fees for bringing the instant motion. The Court held as follows:

  • While it may have been too late to amend the judgment pursuant to Rule 59(e), the Court had discretion to amend pursuant to Rule 60(a) to correct an "oversight or omission." The record established that TT and defendants (collectively "eSpeed") understood that there was a money judgment. For example, eSpeed moved the Court to waive the supersedes bond normally required to appeal a case with money damages.
  • The Federal Circuit and the parties understood the appeal to be on all issues, not just injunctive relief. As such, eSpeed cannot argue that it held back arguments on appeal, that it might otherwise have made if eSpeed had known the appeal went beyond injunctive issues.
  • Whatever TT’s reason for not seeking to correct the judgment with Judge Moran while the case was still pending before him, all parties understood that the judgment included the money damages.

Finally, the Court denied TT’s request for it fees incurred bringing the motion. First, both parties should have sought to correct the judgment when it was entered. Second, TT’s fee request was undermined by its unreasonable demand in the initial motion that eSpeed pay the money damages within five days.

Trading Technologies: “Mirror Image” Patent Counterclaims Struck Sua Sponte as “Meaningless”

Posted in Pleading Requirements

Trading Technologies Int’l, Inc. v. CQG, Inc., No. 10 C 718, Slip Op. (N.D. Ill. Jan. 24, 2011) (Shadur, Sen. J.).*

Judge Shadur sua sponte dismissed defendants’ (collectively "CQG") noninfringement and invalidity counterclaims. The Court explained that "mirror image" noninfringement and invalidity patent counterclaims are "seemingly meaningless." And the "amorphous nature" of CQG’s counterclaims resulted in them being especially unnecessary. The Court, therefore, dismissed the declaratory judgment counterclaims.

*Click here for much more on this and TT’s other cases in the Blog’s archives.

Trading Technologies: Court Consolidates 2010 Cases

Posted in Local Rules

Trading Technologies, Inc. v. BGC Partners, Inc., No. 10 C 715, Slip Op. (N.D. Ill. Feb.3, 2011) (Kendall, J.).*

Judge Kendall consolidated plaintiff Trading Technologies’ ("TT") patent infringement cases that were filed in 2010 – Judge Coleman previously denied TT’s motions to consolidate the cases filed in 2005 with those filed in 2010. The Court held that the 2010 cases were sufficiently related pursuant to Local Rule 40.1. While the products were not identical and the asserted patents were not identical for each defendant, the accused products were similar and were all accused of infringing one or more of three of TT’s patent families. Additionally, consolidation would conserve substantial time and effort without causing delay.

The Court also ordered the parties to file a summary of all pending motions and discovery status.

Click here for much more on this case in the Blog’s archives.

Trading Technologies: Motion Not Allowed to Lie “Fallow”

Posted in Local Rules

Trading Techs. Int’l., Inc. v. CQG, Inc., No. 10 C 718, Slip Op. (N.D. Ill. Jan. 6, 2011) (Shadur, Sen. J.).

Judge Shadur denied plaintiff Trading Technologies’ ("TT") motion to strike certain of defendants’ (collectively "CQG") affirmative defenses and counterclaims.* The motion was originally filed September 1, 2010 and had been stayed by agreement as the parties attempted to negotiate a global settlement. Because allowing motions to lie "fallow" for so long was "undesirable" the Court dismissed the motion with leave to refile it should the parties restart the substantive portion of the case.

Click here for much more on this and the related Trading Technologies cases in the Blog’s archives.

Trading Technologies: Court Denies Motion to Consolidate Sixteen Pending Cases

Posted in Local Rules

Rosenthal Collins Group, LLC v. Trading Technologies Int’l, Inc., No. 05 C 4088, Slip Op. (N.D. Ill. Nov. 23, 2010) (Coleman, J.).

Judge Coleman denied plaintiff Trading Technologies’ ("TT") Local Rule 40.4 motion to consolidate TT’s sixteen pending patent cases,* involving nine patents. Initially, the Court noted that TT did not seek consolidation of all sixteen cases in a single case, but consolidation of the four remaining cases that TT filed in 2005, and separately the twelve cases TT filed in 2010. LR 40.4 requires that a motion to consolidate be filed in the lowest number case. So, while the instant case was the lowest number of the 2005 cases, it was not the lowest number 2010 case. As to the 2010 cases, therefore, the Court did not address consolidation. As to the 2005 cases, TT failed to show that the cases were sufficiently related — while they involved common patents, the accused products operated in "very different manner[s]." Furthermore, while Judge Moran previously coordinated discovery of all of the 2005 cases before the cases were reassigned, TT did not demonstrate that consolidating the 2005 cases would conserve resources.

Click here for much more on these cases in the Blog’s archives.

Trading Technologies: “Willful and Intentional” Evidence Fabrication Leads to $1M Fine & Default Judgment

Posted in Discovery

Rosenthal Collins Group, LLC v. Trading Techs. Int’l, Inc., No. 05 C 4088, Slip Op. (N.D. Ill. Feb. 23, 2011) (Coleman, J.).*

Judge Coleman granted defendant/counter-plaintiff Trading Technologies’ ("TT") motion for evidentiary sanctions and default judgment.  Judge Moran previously dismissed plaintiff/counter-defendant Rosenthal Collins Group’s ("RCG") motion for summary judgment regarding the alleged prior art Buist trading program for discovery abuse, ordered RCG to produce additional documents and things related to the Buist program, and ordered RCG to pay certain of TT’s attorney’s — click here for the Blog’s post on that decision.  Initially, the Court the severity of a default judgment as a sanction, calling it "extreme," and noted that the Seventh Circuit required a showing of willfulness, bad faith or fault by a preponderance of the evidence in order to justify dismissing a case.

The Court held that the high standard was met in this case, for at least the following reasons:

  • During his deposition, Buist admitted modifying and overwriting source code in 2006 that he and by extension RCG held out as having been created in 1998 or 1999.  And in the face of clear evidence of these facts, RCG continued to deny them, even calling the claims "libelous," "audacious," and "Oliver Stone-esque."
  • Buist later admitted "wiping" or erasing six of seven zip disks that originally contained the relevant source code and that were later produced by RCG because they allegedly contained the code.  The seventh was also wiped, although there was a dispute regarding whether Buist or others had access to it when it was wiped.  But the Court held that it was "impossible to believe that it is merely coincidence that the seventh disk happened to be wiped on May 2, 2006, which just happened to be the same day that TT was scheduled to inspect it."
  • There was evidence that "virtually every piece of media ordered produced by the Court in May 2007 and July 2008 was wiped, altered, or destroyed after those orders were entered . . . ." (emphasis in original).
  • Even if RCG and its counsel had no knowledge of the destruction of the evidence, the destruction might have been avoided if RCG had timely complied with the Court’s orders to produce the materials.  And regardless, RCG and its counsel should have preserved the evidence by taking custody of it.
  • Buist was RCG’s agent and, therefore, RCG was bound by Buist’s behavior and actions.

Based upon these determinations, the Court found clear and convincing evidence that "RCG, and its counsel, acted in bad faith and with willful disregard for the rules of discovery and this Court’s orders."  And because a monetary sanction alone was not sufficient, the Court entered a default judgment in favor of TT and dismissed RCG’s complaint and struck its defenses to TT’s counterclaim.  The Court also fined RCG $1,000,000 for "egregious conduct before the Court" and ordered RCG’s counsel to pay TT the attorney’s fees and costs related to TT’s motion for default judgment.

*  I have a few earlier opinions from the Trading Technologies cases, but this one was significant enough that I moved it up.  Click here for more on the case in the Blog’s archives.

Court Will Not Apportion Costs to Prevailing Party Based Upon How Much of the Case was Won

Posted in Trial

Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. Oct. 29, 2010) (Dow, J.).

Judge Dow denied defendants’ (collectively "eSpeed") motion to strike or stay consideration of plaintiff Trading Technologies’ ("TT") bill of costs, and awarded TT $381,831.04 in costs.* Because TT received a damages award at trial, TT was the prevailing party and costs were warranted, absent TT’s trial misconduct or eSpeed’s inability to pay. The fact that TT lost on the issue of eSpeed’s alleged willfulness did not change TT’s status as the prevailing party, nor did the fact that eSpeed was found not to infringe based upon several of its software packages. The Court had previously stayed a determination of the bill of costs pending the Federal Circuit appeal. So, with the appeal complete, there was no reason left to delay the Court’s decision.

The Court then turned to the bill of costs. The following determinations were of particular note:

The Court awarded all undisputed witness travel, attendance and subsistence costs, totaling approximately $21,000. The Court denied travel costs for a trial witness that was flown to trial from Switzerland, rather than from his home in Ohio. Witness fees are only allowed for the shortest possible route from the witness’s residence.

The Court awarded videography costs only for depositions of foreign witnesses that TT disclosed as potential trial witnesses.

Court reporter appearance fees were denied because they are only allowed to the extent the fee plus the per-page rate charged does not exceed the Judicial Conference’s limit. In this case, the per page rate was already more than the allowed per-page recovery.

Because hearing transcripts played a significant role in the case, the Court awarded TT the allowable hearing transcript fees.

The Court awarded 25% of TT’s photocopying request. The reduction accounted for various non-copying charges, such as OCR, blowbacks, etc. and multiple copies of some documents. Recovery is only allowed for a single copy of a document, in most cases.

No costs were awarded for translation because § 1920(6) does not authorize recovery of translation costs, except for "check interpreters" used at trial to dispute certain interpretations.

The Court refused to apportion TT’s costs based upon the portion of the case that eSpeed won (summary judgment of noninfringement) versus the jury award that TT won.

* Click here for much more on this case in the Blog’s archives.

Trading Technologies: Court Reconnect Altering Judgment to Reflect Jury Award

Posted in Trial

Trading Techs. Int’l, Inc. v. Speed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. Sep. 8, 2010) (Schenkier, Mag. J.).

Judge Schenkier recommended denying plaintiff Trading Technologies’ ("TT") motion to enforce the final judgment and for sanctions. The Court also recommended correcting the final judgment to reflect the jury verdict and the remitted damages award. A jury previously awarded TT $3.5M in damages and found defendant’s infringement willful. The Court later overturned the willfulness finding and ordered a remittitur of damages to $2.5M, which TT accepted. The Court then granted a permanent injunction and entered a final judgment, but that judgment did not reflect the damages award.

Defendant argued that, despite the jury award and remittitur, there was no damages award because it was not reflected in the final judgment and after the Federal Circuit had decided to appeal it was too late to revise the final judgment.

The Court agreed that the first judgment should have included the award, but not that it was too late to fix it. The Court noted that the most likely explanation for the omission was "the fallibility of human beings (judges included)." The Court also noted that TT should have sought to correct the final judgment immediately. But despite the imprecise judgment, the Federal Circuit ruled upon several issues related to the jury verdict, although not the award itself. And neither TT nor defendants disputed the fact or the amount of the damages award. Based upon those facts, the Court recommended that revising the final judgment to reflect the award would merely "correct a clerical mistake or a mistake arising from oversight or omission" pursuant to Fed. R. Civ. P. 60(a). Finally, the Court recognized TT’s frustration over not having received payment 34 months after the jury verdict and 6 months after the Federal Circuit’s decision. But the Court recommended not awarding TT its fees because TT’s failure to promptly get the judgment corrected was the only reason there was a delay in paying the judgment.