Chicago IP Attorney & Lawyer : R. David Donoghue : Chicago IP Litigation Blog

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.
 

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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.
 

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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.
 

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Trading Techs. Int’l, Inc. v. eSpeed, Inc., Case Nos. 2008-1392,-1393 & -1922, Slip Op. (Fed. Cir. Feb. 25, 2010) (Rader, J.) (Clark, J. concurring).

Writing for a panel including Judge Lourie and Eastern District of Texas District Judge Clark, Judge Rader affirmed each of the challenged decisions from Judge Moran’s jury trial in this patent litigation involving futures trading software.

For much more on this case, click here to read numerous posts in the Blog’s archives analyzing Judge Moran’s opinions and various aspects of the jury trial. Judge Moran construed the claims of the patents-in-suit, ruled upon several summary judgment motions and presided over the jury trial. The jury found that defendants’ (collectively “eSpeed”) Future View software willfully infringed the patents and that the patents were valid, awarding plaintiff Trading Technologies (“TT”) $3.5M. Judge Moran remitted the damages overall to approximately $2.5M.

Claim Construction

The most interesting aspect of the decision is the discussion of the de novo review of claim construction decisions. Judge Rader spent two and a half pages explaining the fact-law dichotomy of claim construction and concluded that claim construction required resolution of evidentiary and factual issues before construing the disputed terms:

In sum, claim construction involves many technical, scientific, and timing issues that require full examination of the evidence and factual resolution of any disputes before setting the meaning of the disputed terms.

And District Judge Clark wrote a concurring opinion solely to argue against de novo review:

[de novo review] may result in the unintended consequences of discouraging settlement, encouraging appeals, and, in some cases, multiplying the proceedings.

After a de novo review of his decisions, the Court upheld Judge Moran’s constructions. “Static display of prices” meant "a display of prices comprising price levels that do not change positions unless a manual re-centering command is received." And a “static condition” meant that “the price axis never changes positions unless by manual re-centering or re-positioning.” While Judge Moran’s constructions may have appeared narrower than the patent intended initially, they were supported by both the intrinsic and extrinsic evidence. Because eSpeed’s Dual Dynamic and eSpeedmeter systems had mandatory re-centering features, they did not literally infringe.

Doctrine of Equivalents

The court upheld Judge Moran's ruling that the doctrine of equivalents did not apply to the static elements in the claim. Even if the accused products only re-centered once or twice a day, allowing that re-centering to be captured by the doctrine of equivalents would vitiate the claims. Furthermore, prosecution history estoppel also barred equivalents. The patentee differentiated his invention by explaining that its "price axis do[es] not move."

Willfulness

The Court upheld Judge Moran's ruling overturning the jury's willfulness finding. eSpeed's prompt redesign efforts and immediate removal of infringing products were not objectively reckless. And TT offered no evidence that eSpeed sold Future Views during the contested period.

Indefiniteness

The Court held that "single action of a user input device" was not indefinite. Judge Moran correctly construed the term as requiring "an action by a user within a short period." One of ordinary skill in the art could distinguish between single and multiple actions, even when a "single action" was a double-click.

Priority Date

The Court held that there was an issue of material fact regarding the priority date warranting a jury trial. The Court upheld the use of patent law experts, and found a sufficient basis for the jury's priority decision:

Considering the undisputed knowledge of those skilled in the art, disclosure of a species in this case provides sufficient written description support for a later filed claim directed to a very similar and understandable genus. Accordingly, the patents-in-suit are entitled to claim priority to the provisional application.

Inequitable Conduct

The Court upheld Judge Moran's ruling that failure to disclose certain software to the PTO was not inequitable conduct. The software was not material because the software's use after the priority date would not have impacted the examiner's analysis. And confidential use of the software for personal purposes was experimental. 

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Rosenthal Collins Group, LLC v. Trading Techs. Int'l., Inc., No. 05 C 4088, Slip Op. (N.D. Ill. Sept. 18, 2009) (Dow, J.). 

Judge Dow denied the parties' cross-motions for summary judgment in this patent dispute regarding software for electronic futures trading using a static price axis.* Although the other related cases are stayed pending an appeal of the related eSpeed case to the Federal Circuit, declaratory judgment defendant Trading Technologies ("TT") sought and Judge Moran agreed to allow this case to proceed based upon TT's agreement that declaratory judgment plaintiff Rosenthal Collins Group ("RCG") infringed even under the Court's allegedly narrow construction of a "common static price axis" and "static display of prices." TT sought to broaden the constructions on appeal. The parties agreed on how the accused Onyx software operated. The price axis was generally dynamic. But if a user pointed a cursor in the window containing the axis, the axis became static until the cursor was removed or after thirty seconds, whichever came first. TT identified this as Onyx's order entry mode. And because Onyx has a static axis in order entry mode, TT argued that Onyx infringed based upon the order entry mode, even if it did not infringe in other modes. RCG argued that Onyx only had a single mode, and because the price axis was not consistently static, without manual recentering, there was no infringement. The Court held that whether Onyx operated in three modes and, therefore, infringed, or operated in a single mode and, therefore, did not was a question of fact. The case, therefore, was not appropriate for summary judgment.

The Court also stayed the case pending appeal of the eSpeed case, except for TT's motion for default and sanctions. 

*  Click here for much more on this case and its related cases in the Blog's archives.

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Trading Techs. Int'l., Inc. v. CQG, Inc., No. 05 C 4811, Slip Op. (N.D. Ill. Feb. 17, 2009) (Moran, Sen. J.).

Judge Moran denied a motion to reconsider an earlier order continuing a summary judgment motion and staying the case pending the appeal of a related case, Trading Technologies v. eSpeed.*  The Court also ordered the parties to meet and confer regarding how to exchange defendants' sensitive trading information.  The Court previously ordered defendants to work with plaintiff Trading Technologies ("TT") to determine how to produce defendants' raw transaction data, which was required for a damages calculation.  The parties could not agree on how to exchange the information because of defendants' unwillingness to provide  such sensitive data to TT without restrictions.  The Court ordered the parties to continue trying to resolve the issue and suggested various ways that the information could be exchanged without forcing defendants to provide all of their sensitive business information.

*  Click here for much more on this case and the related cases in the Blog's archives.

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Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. Jul. 24, 2008) (Moran, Sen. J.).*

Judge Moran granted defendants’ (collectively “eSpeed”) motion to stay judgment pending appeal without requiring a supersedeas bond for the full amount of the judgment, pursuant to Fed. R. Civ. P. 62(d). Plaintiff Trading Technologies (“TT”) argued that the volatility and instability of the financial industry warranted a bond. But the Court held that the evidence proved that eSpeed was currently financially sound and had more than sufficient funds available to make payment, such that the cost of a bond would be a waste of money. The Court noted that eSpeed (which recently merged with an affiliate, BCG Partners) had $340M in first quarter revenues, $150M in shareholder equity and $200M in cash or cash-equivalents on hand. The Court did, however, note that TT could monitor eSpeed’s financial situation and return to the Court if eSpeed later looks like it might become unable to pay.

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

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Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312 (N.D. Ill. Jun. 13, 2008).

The Court held that its May 22 permanent injunction against defendant eSpeed (click here for the Blog's post on the injunction) was a final judgment, which allowed for appeal to the Federal Circuit.  Anyone reading the Blog's recent posts regarding the Court's permanent injunction against eSpeed, and eSpeed's appeal of the injunction as well as plaintiff Trading Technologies' ("TT") cross-appeal, might have assumed that the Court had entered a final judgment.  eSpeed apparently did because it filed an appeal of the permanent injunction to the Federal Circuit (click here for the Blog's post on the issues on appeal).  TT filed its broader appeal shortly thereafter (which eSpeed objected to as untimely because the Court had not entered a final judgment on anything beyond the permanent injunction), but disagreed that the Court had entered a final judgment on any issue.  TT, therefore, also filed an emergency motion requesting that the Court vacate its permanent injunction, rule on the parties' cross-motions for attorney's fees (the Court now has ruled on those motions, click here for the Blog's post about that decision) and then reenter the permanent injunction along with final judgment.*

This may seem like irrelevant procedural posturing, but TT explains the appellate rules implications in its emergency motion:

The rules state that the first-filed notice of appeal is the appellant, but when both parties file an appeal on the same day, the plaintiff is deemed the appellant. F.R.A.P. 28.1. Where there is a cross-appeal, the appellant has the advantage of having higher word limits in its briefs and also files the first brief focused solely on the issues it seeks to appeal. The general rule is that a plaintiff, like TT here, has the right to be an appellant if it wants to appeal an issue.

The Court did not directly rule on TT's motion, but effectively decided it by entering this Minute Order stating that its May 22 permanent injunction was a final judgment effective May 22.  The Clerk, who subsequently entered final judgment on all issues effective May 22, and the parties -- eSpeed filed a notice of appeal of all issues rather than its initial appeal of just the injunction -- treated the final judgment as relating to all matters before the Court, which makes both parties' appeals timely.  According to TT's above analysis, because TT filed its appeal after but on the same day as eSpeed, TT will be appellant and eSpeed will be the cross-appellant.

For those concerned that the Blog might be silent about this case for months, have no fear.  The related cases continue and I will continue blogging about both the related cases and the appeal.

*  Click here for TT's emergency motion, click here for eSpeed's response, and click here for TT's reply. Also, click here for much more on this case in the Blog's archives.

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Judge Moran denied the party's cross motions for attorney's fees. Plaintiff Trading Technologies (“TT”) argued that the case was exceptional. But the Court held that it was not for the following reasons:

• eSpeed's refusal to admit infringement was reasonable. A defendant requiring plaintiff to make its proofs does not alone make a case exceptional.
  
• eSpeed's decision not to agree to an interlocutory appeal of claim construction and noninfringement decision was not grounds to make the case exceptional. Although eSpeed argued against an interlocutory appeal, the Court made the ultimate determination.
  
• eSpeed's pursuit of its inequitable conduct claim, which it lost after a bench trial, did not make the case exceptional. In the Court's opinion regarding inequitable conduct, the Court ruled for TT, but noted that eSpeed's case was not frivolous – click here to read the Blog's post about that opinion.
  
• The jury's willfulness finding did not make the case exceptional. This was especially true because the Court overturned the jury's willfulness decision based upon In re Seagate – click here to read the Blog's post about that case.

The Court noted that neither party in this case acted more outrageously than the other. Counsel for both parties were zealous advocates that pushed, but did not go beyond, the envelope.

eSpeed argued that the Court should award it attorney's fees, pursuant to Fed. R. Civ. P. 37(e)(2), for proving that a particular use of a software package was commercial and not experimental, a fact that TT denied in a request for admission. The Court chose not to rule on TT's and eSpeed's respective procedural arguments regarding whether TT was required to admit the use was commercial. Instead, the Court denied attorney's fees because of the Court's earlier ruling that failure to disclose the commercial use in question to the Patent Office was not inequitable conduct because the use occurred before the critical date. And, as with eSpeed's decision to hold TT to its proofs, the Court would not punish TT for holding eSpeed to its proofs on inequitable conduct.

* Click here to read this opinion and click here to read much more about this case in the Blog’s archives.

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Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 2008-1392 & 1393 (Fed. Cir.).*

As Judge Moran predicted, the parties have appealed this case to the Federal Circuit.* The parties’ appeals were consolidated, leaving a single appeal with a substantial number of issues. The great, new Patent Appeal Tracer* reported that plaintiff Trading Technologies (“TT”) is appealing at least the following decisions (click here to read Tracer’s post on the cross-appeals):

Claim constructions, specifically constructions of "static price axis" and "order entry region"  (click here and here and here for the Blog’s posts regarding claim construction opinions);

• Summary judgment of noninfringement of most of defendant eSpeed’s software packages, including the following titles: Dual Dynamic, eSpeedometer, and modified eSpeedometer programs (click here for the Blog’s post regarding this opinion);
  
• Partial summary judgment for TT regarding prior use (click here for the Blog’s post regarding this opinion); and
  
• Judgment as a matter of law overturning the jury’s willfulness finding (click here for the Blog’s post regarding this opinion).

And eSpeed is appealing, at least, the following decisions:

• The permanent injunction regarding certain of eSpeed’s software packages (click here for the Blog’s post regarding the Court’s permanent injunction).

* Thanks to Patent Tracer for linking to the Blog’s TT v. eSpeed coverage. Click here to read much more about this case in the Blog’s archives.

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Judge Moran granted plaintiff Trading Technologies' (“TT”) motion for a protective order, but denied its request for its fees related to the motion. TT used two videos of third part Walter Brumfield's trading screen and a portion of one of Brumfield's daily trading records (collectively the “Evidence”) as evidence during the Court's inequitable conduct bench trial. Despite prior designation as “Attorneys' Eyes Only” pursuant to a protective order and having been sealed in the parties' previous filings, the Evidence was presented in open court without any protections. Additionally, it was designated on exhibit lists submitted in connection with the bench trial without any confidentiality designation.

The first business day after the bench trial, TT contacted defendant eSpeed to confirm that the Evidence was to be treated as confidential. But eSpeed, and the other defendants in the related cases, objected arguing that by using the Evidence at trial without any protections or designations, TT waived confidentiality.

The Court acknowledged a “strong presumption of public access to court proceedings and records . . . .” But noting that the presumption is not absolute and that the parties seeking disclosure here were defendants not the press or public, the Court held that the Evidence retained its confidential status for the following reasons:

• The videos showing Brumfield's custom-designed computer screen configuration was a trade secret and its disclosure could harm Brumfield's competitive trading advantage;

• TT's public disclosure of the Evidence was inadvertent as evidenced by the numerous times the Evidence was previously treated as confidential; and

• To the extent the Court relied on the Evidence in its opinion (click here to read the Blog's post about the opinion), it did not do so in sufficient technical detail to disclose the confidential elements of the Evidence.

Additionally, the Court noted that while Brumfield's attorney did receive copies of the exhibit list showing the Evidence without confidentiality designations and TT had periodically represented Brumfield's interest throughout the case, neither Brumfield nor his counsel were in attendance to object when the Evidence was used during the bench trial. The Court does not specifically say whether or how these facts played into its decision. But the facts were included in the Court's description of the facts and, therefore, the Court appears to have considered them relevant.

* Click here to read much more about this case in the Blog’s archives and click here for this opinion.

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Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. May 22, 2008) (Moran, Sen. J.).*

After a jury held that certain of defendants' (collectively "eSpeed") products willfuly infringed two of plaintiff Trading Technologies' (“TT”) futures trading software patents (the Court previously reversed the willfulness finding), the Court entered a permanent injunction preventing future sales of the infringing software -- a previous opinion granted summary judgment of noninfringement of eSpeed's current software and all software except that sold during a six month period shortly after TT's patents issued.  The Court looked at each of the four standard injunction elements, as required by the Supreme Court in eBay Inc. v. MercExchange, LLC.

Irreparable Harm

The Court held that TT would be irreparably harmed by any continued sales of infringing product because TT's successful business was built around its patented technology and, therefore, direct competitors with infringing products irreparably harmed TT.    The Court agreed with eSpeed that general claims of competition were insufficient pursuant to eBay, but the Court held that TT's direct competition assertions were supported by trial testimony.

Inadequate Remedy at Law

eSpeed argued that TT's numerous licenses proved that monetary damages could compensate TT, as the eBay district court held after remand.  but the Court distinguished eBay.  eBay was premised upon a combination of plaintiff MercExchange's:

• willingness to license;
  
• choice not to practice the patent;
  
• failure to seek preliminary injuctive relief; and
  
• consistent, clear statements that it desired monetary damages.

In contrast, TT manufactured a patented product and only licensed as an alternative to litigation.  And the Court acknowledged TT's concern that providing monetary damages after trial without an injuction would force a compulsory license on TT.

Balance of Hardships

The Court held that TT would be more harmed without an injunction than eSpeed would be harmed by an injunction.  eSpeed no longer made or sold the infringing software, so an injunction would cause eSpeed little or no harm.  Furthermore, eSpeed manufactured numerous non-infringing products.  So, the extent of any harm was further minimized.

Public Interest

eSpeed argued that the public interest weighed against granting injunctions regarding patents in reexamination.  But TT's patents had since been upheld in the reexam.  So, the only public interest factor was enforcement of TT's patent rights.

For these reasons, the Court entered a permanent injunction.  Click here to read the Permanent Injunction Order.

* Click here to read much more about this case in the Blog’s archives and click here for this opinion.

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Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. May 6, 2008) (Moran, Sen. J.).*

After a two-day hearing and two rounds of briefing, Judge Moran held that defendants (collectively “eSpeed”) had not met their burden of proving that plaintiff Trading Technologies (“TT”) engaged in inequitable conduct before the Patent & Trademark Office (“PTO”). The Court held that one of the TT patent's inventors engaged in commercial use between the priority dates for the patent's provisional and parent applications. But the Court held that TT was not required to disclose the commercial use to the PTO because it was not material to patentability. First, TT sought priority from its provisional application in good faith and had a reasonable belief that priority from the provisional was warranted. The reasonableness of the belief was born out when both the jury and the Court determined that the patent could claim priority from the provisional application. Because the commercial use happened after the patent's critical date (based upon the provisional application), it was not material.**

Additionally, TT did not commit inequitable conduct when it responded to the Examiner's request for, among other things, “any use of the claimed invention” with a series of brochures and presentations that described the software's features, but without identifying the inventor's commercial use. TT argued that the Examiner was seeking an explanation of all of the features of TT's software because it had identified anticipatory prior art from TT's website in a prior Office Action. The Court held that this was a reasonable reading of the Examiner's request because the Examiner accepted TT's response which did not address whether the software had been in use. Had the Examiner wanted an answer to that question, he could have asked again, instead of allowing the patent to issue.

Many readers will be wondering what is next. The Court has a few more pending motions, and a motion for reconsideration would not be surprising in this case. But for the most part, I suspect that this case is now on a fast track to the Federal Circuit, where the Court predicted it was going months ago. As always, I will keep you updated as the case develops, both in the Northern District and at the Federal Circuit.

* Click here to read much more about this case in the Blog’s archives and click here for this opinion.

** Click here and here for more on the determination of the appropriate priority date in the Blog's archives.

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Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Min. Order (N.D. Ill. Feb. 20, 2008) (Moran, Sen. J.).*

I have received several emails asking about the status of this case and, specifically, when the inequitable conduct portion of the case will be decided.  The post-trial inequitable conduct briefing appears to be complete -- if you want to read the briefs, they are largely available on Pacer.  So, unless the Court asks for further briefing or an additional hearing either of which seem unlikely, the Court will consider the evidence and the parties' post-trial papers, and then write an opinion deciding the inequitable conduct issues.  There is not any way to accurately predict when the opinion will issue.  The timing is governed by numerous factors, including the complexity of the case and the size of the Court's current docket. 

Additionally, the parties have filed other motions which the Court will also have to decide.  For example, Trading Technologies ("TT") filed a motion for a protective order sealing certain evidence that was produced as "Highly Confidential," but which was put into evidence and used without immediate restriction or objection, as to confidentiality, during the public trial.  I will keep you updated as the Court issues any decisions regarding inequitable conduct or any other issues in the case.

* Click here to read much more about this case in the Blog’s archives.

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Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Min. Order (N.D. Ill. Feb. 20, 2008) (Moran, Sen. J.).*

Judge Moran is scheduled to begin a two-day inequitable conduct bench trial this morning, and everything appears to be ready.  The deposition designations, exhibit lists and motions in limine have all been filed.  The eSpeed defendants have also filed motions to preclude Trading Technologies' counsel from testifying and to enforce eSpeed's understanding  of a stipulation (not surprisingly, the parties disagree as to what was stipulated) regarding the critical date.

Trial is scheduled to begin this morning at 10:30 am CDT.  Unfortunately, client obligations will prevent me from attending.  But I will continue to keep you updated based upon the Court's rulings.

* Click here to read much more about this case in the Blog’s archives.

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Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Min. Order (N.D. Ill. Feb. 20, 2008) (Moran, Sen. J.).*

Judge Moran scheduled a two-day inequitable conduct hearing Wednesday and Thursday, April 2 and 3, thereby granting by implication defendant eSpeed's motion for such a hearing.  The Court also set a March 21 status hearing to discuss witness and privilege issues, presumably related to the inequitable conduct hearing.  So, there is at least one more round of argument and possibly briefing before the Court's judgment is complete and final.  I hope to attend the inequitable conduct hearing and will blog about it if I do.

* Click here to read much more about this case in the Blog’s archives.

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Brian Higgins at the Maryland IP Law Blog posted an analysis of significant willfulness decisions post-In re Seagate, 497 F.3d 1360 (Fed. Cir. 2007) -- click here for the post and click here for a subsequent post discussing Se-Kure Controls, Inc. v. Diam USA, Inc., No. 06 C 4857, 2008 WL 169029 (N.D. Ill. Jan. 17, 2008) (Cox, Mag. J.).  Of the eleven decisions Higgins identified, three were Northern District decisions and one was a Federal Circuit decision analyzing a Northern District case.  Here are my posts on the Northern District decisions:

• Abbott Labs. v. Sandoz, Inc., No. 05 C 5373, 2007 WL 4287503 (N.D. Ill. Dec. 4, 2007) (Coar, J.).
  
• Se-Kure Controls, Inc v. Diam USA, Inc.
  
• Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. Jan. 3, 2007) (Moran, Sen. J.).
  

As you can infer from the relatively small number of cases identified by Higgins, there remains a lot of law to be written about Seagate before the standard is well settled.  I suspect that within 18-24 months there will be a relatively large body of law, including numerous Federal Circuit decisions exploring the new standard's outlines.  Until then, patent litigants will face a degree of uncertainty regarding willfulness.  Of course, defendants will generally be glad to have some uncertainty in exchange for plaintiffs's higher willfulness hurdle.

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Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. Feb. 5, 2008) (Moran, Sen. J.).*

Judge Moran denied defendants’ Fed. R. Civ. P. 59 motion for a new trial of damages on the condition that plaintiff Trading Technologies (“TT”) accepted a remittitur of defendant eSpeed’s portion of the damages. After a trial, the jury returned a verdict for TT and awarded $3.5M in compensatory damages, split $2M against defendant Ecco and $1.5M against defendant eSpeed. At trial, TT’s damages model was based upon a proposed reasonable royalty of between $.15 and $.25 per trade and a total of approximately 18M to 23M trades for a damages range of about $3.5M to $4.6M. TT argued that the apportionment of damages was irrelevant because the total award was within the argued range and because eSpeed purchased Ecco and, therefore, would be paying the full amount. But the Court noted that Ecco’s award would be paid from an escrow account set up for because of TT’s patent claims when eSpeed purchased Ecco. Additionally, eSpeed’s $1.5M judgment was well beyond the highest award that could be supported by TT’s evidence. The evidence showed that during the relevant time, eSpeed completed approximately 2.1M trades. Even at $.25 per trade, TT’s highest proposed royalty, the possible damages were only $539,468. The Court, therefore, offered TT a remittitur of $539,468 or a new trial on damages.

The Court also awarded TT prejudgment interest set at the average prime rate for the period compounded monthly, because TT collected license fees monthly.

* Click here to read much more about this case in the Blog’s archives and click here for a copy of this opinion.

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Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. Jan. 18, 2008) (Moran, Sen. J.).*

Judge Moran denied defendants’ (collectively “eSpeed”) motion for judgment as a matter of law that plaintiff Trading Technologies’ (“TT”) patents were unenforceable because of patent misuse. TT’s open letter to the futures market was not patent misuse despite the facts that:

1. The letter requested a 2.5 cent fee for every transaction an exchange processed regardless of whether infringing software was used; and
   
2. The fees did not end when the patents expired. 

Had such a license been entered, it would have been per se patent misuse. But because no exchange ever accepted the offer or even entered serious negotiations with TT based upon the offer, there was no patent misuse.

Terms in certain license agreements that prevented licensees from using eSpeed software, regardless of whether the eSpeed software infringed, were improper. But the terms did not rise to the level of patent misuse because the effect of the clauses was not anti-competitive. The clauses were only in two of TT’s fifteen settlement agreements. And TT argued that the intent of the parties in the two agreements was only to restrict the use of infringing eSpeed products. Furthermore, the other thirteen agreements only restrict use of infringing software. 

Terms in the agreements requiring royalties on any trade for which licensed software could be used, as opposed to just those for which patented software was actually used, were not patent misuse. The agreements required only that royalties be paid on trades made using licensed products or any software when licensed and unlicensed software was linked such that either could be used to make the trade. If unlicensed software that was not linked to the licensed software was used, no royalty was due.

Finally, the provisions preventing licensees from assisting third parties to invalidate the TT patents were not patent misuse. Licensees that had not agreed to a consent judgment as part of a settlement were free to challenge the validity of the patents on their own. Furthermore, no licensee was prevented from participating in court-ordered invalidity proceedings or from assisting a government entity, such as the PTO, that was considering the validity of the patents.

* Click here to read much more about this case in the Blog’s archives and click here for a copy of the opinion.

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Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. Jan. 2, 2007) (Moran, Sen. J.).*

Judge Moran denied defendants’ (collectively “eSpeed”) motion for judgment as a matter of law that plaintiff Trading Technologies’ (“TT”) patent was invalid for indefiniteness based upon the claim term “single action of a user input device” (“Single Action”). The Court previously construed Single Action as “an action by a user within a short period of time that may comprise one or more clicks of a mouse button or other input device.” Before trial, the Court used the definition to exclude evidence regarding a Tokyo Stock Exchange (“TSE”) software package that required double clicking, entering a quantity and pressing “enter” – click here for the Blog’s discussion of that opinion.

TT argued that the phrases “one or more clicks” and “short period of time” in the Court’s construction were indefinite because they did not sufficiently delineate the scope of the term. The Court noted that it did not need absolute clarity to define a claim term and held that the Single Action was sufficiently definite. The Court reasoned that it had been able to construe the term based largely upon the specification. And neither “one or more clicks” nor “short period of time” rendered the claim indefinite because the phrases are part of the definition, not the claim language. 

Additionally, the terms were designed to be less than precise because Single Action is defined from the perspective of the individual user, not objectively for all users. The Court gave the example that an experienced trader might set a double click as two clicks occurring within .3 seconds of each other – which would be a Single Action – while a novice trader might set a double click as any two clicks within one second of each other – which would be a Single Action for the novice, but not the experienced trader. Creating a more fixed definition based on an average user would import limitations into the claim.

Finally, the fact that the Court was able to determine that the TSE software did not require only a Single Action further proved that Single Action was sufficiently definite.

*  Click here to read much more about this case in the Blog’s archives and click here for a copy of this opinion.

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Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Min. Orders (N.D. Ill. Jan. 3, 2007) (Moran, Sen. J.).*

In addition to the willfulness decision discussed earlier today (click here for the post) and the invalidity decision that I will blog about early next week, Judge Moran also issued two minute orders deciding several of the outstanding post-trial motions.  The Court denied defendant eSpeed's motion for a new trial and its combined motion for judgment as a matter of law that: 1) the claims are invalid because of anticipation, obviousness, prior sale; and 2) because the claims have a June 9, 2000 priority date they were not infringed.

There are still several pending motions, including various motions regarding damages and interest on the jury's award and eSpeed's motion for an evidentiary hearing regarding inequitable conduct.  I will keep you posted as those are decided.

*  Click here to read much more about this case in the Blog’s archives.

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Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. Jan. 3, 2007) (Moran, Sen. J.).*

Judge Moran granted defendants’ (collectively “eSpeed”) motion for judgment as a matter of law that their infringement was no willful. The Court instructed the jury using the objective recklessness standard from In re Seagate Techs., LLC, 497 F.3d 1360 (Fed. Cir. 2007), but when the Court reviewed the totality of the circumstances it found no support for the willfulness verdict and, more specifically that plaintiff Trading Technologies (“TT”) had not met its burden of proving that there was an objectively high likelihood of infringement when eSpeed sold its infringing product, Futures View. When eSpeed launched Futures View, TT’s patent had not issued. And while eSpeed was aware of the application, knowledge of an application does not prove willfulness. Furthermore, TT produced no evidence of post-issuance willfulness. TT submitted two internal eSpeed emails, but both were sent before TT’s patent issued and the emails only suggested that eSpeed should mimic certain features of the TT software. And upon learning of TT’s issued patent, eSpeed immediately began a redesign of Futures View, resulting in new software products that the Court granted summary judgment of noninfringement. As a result of the redesign, the infringing Futures View was only on the market for five months after TT’s patent issued. 

TT also argued that eSpeed’s failure to make noninfringement arguments in preliminary injunction proceedings showed willfulness. But the Court held that eSpeed denied infringement in its answer and that there was no need to argue noninfringement of Future View in preliminary injunction proceedings because eSpeed was not selling Future View. There was no danger of an injunction over a product eSpeed was not selling. 

Finally, TT argued that eSpeed’s creation of a $4M escrow account related to potential infringement of the TT patent when it purchased defendant Ecco was proof of willfulness. The Court, however, held that the escrow account was merely assignment of risk in a business deal. When eSpeed purchased Ecco, TT had already sued eSpeed and to the extent that there was any risk that Ecco products could infringe the TT patent, the escrow account was not an admission, but a “shrewd business practice.”

Expect to see more on TT v. eSpeed this week. The Court has issued its first few post-trial opinions and I am sure others are on their way before this case heads, presumably, to the Federal Circuit.

*  Click here to read much more about this case in the Blog’s archives and click here for a copy of this opinion.

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Lots of blogs have been doing top ten lists or posts pondering their past year or resolving to do more in 2008. That is not my style.* But Wired’s top ten list of startups to watch in 2008 caught my eye because of a Chicago connection – click here for the entire list. Second on the list (alphabetically) is Chicago company 37Signals, a company that makes a suite of personal and business management software. I am trying out their web-based calendar and organization tool Backpack and, so far, I have been impressed.  Here is what Wired says about 37Signals:

There's a reason nobody ever uses the phrase, "It's as simple as computer programming." But Chicago's 37Signals has made life simpler for programmers and small businesses alike with products such as Basecamp (project management software) and an increasingly popular open source web framework called Ruby on Rails. The company ditches the philosophy of "more features, more better" in favor of simplicity and accessibility: Focus only on the most important features and make things easier to use. The company itself embodies its keep-it-simple philosophy: Fewer than 10 staffers, working from humble offices, create programs quickly and nimbly adapt them based on user feedback. 37Signals released version 2.0 of Ruby on Rails in December, which should give many programmers a happy new year.

Founders: Jason Fried, Ernest Kim, Carlos Segura

Funding: Undisclosed sum from Bezos Expeditions

Employees: 8

For some other good IP-related top ten or end of the year lists, check out:

• Patent Docs (Top fifteen Patent Docs stories of the year, 11-15, 6-10 and 1-5)
  
• Patently-O (Hal Wegner's top ten 2008 patent cases)
  
• TinyTech IP (Top ten nanotechnology patents)

* I will say that the Blog’s top two stories of the year were without question the Patent Reform Act and Trading Technologies v. eSpeed.

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I have not been able to fulfill my promised additional coverage of the inequitable conduct portion of the Trading Technologies v. eSpeed case, but it is not my fault.*  The Court decided to consider eSpeed's inequitable conduct and patent misuse defenses on the papers.  The Court ordered a briefing schedule that will complete briefing by early December for eSpeed's inequitable conduct and patent misuse defenses , as well as eSpeed's post-trial motions regarding willfulness and damages remittitur and TT's motions for its attorneys' fees and costs.  The Court has scheduled a status conference for December 20th.  Perhaps the parties will have rulings by the end of the year.

Practice tip:  In my experience, one of the dangers of doing inequitable conduct after the conclusion of the jury trial is that both the Court and the parties are exhausted and emotionally drained at the end of the jury trial (particularly after a multi-week trial like this one).  So, when it is time to try inequitable conduct, either the Court no longer wants the trial or the parties and the Court are so exhausted that they have trouble keeping their focus and energy level where it was for the jury trial despite the importance of the issues.  I do not know why the parties or the Court decided that inequitable conduct should be decided on the papers in this case.  But any time that inequitable conduct is to be tried after a jury trial, you run the risk that no live evidence will come in on inequitable conduct.

*  Click here to read much more about this case and Trading Technologies' ("TT") related cases in the Blog's archives

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I have already posted on the verdict generally, but the jury's completed verdict form is now available and provides some more detailed information -- click here for a copy.  The jury found infringement, either literal, contributory or induced, for every accused product on every asserted claim.  The $3.5M damages award was split $1.5M against eSpeed and $2M against Ecco.  And both eSpeed and Ecco were found to have willfully infringed the patents.

Additionally, click here for the final jury instructions.  Of particular interest, the willfulness instruction, at page 35, is likely one of the first that used the new objective recklessness standard from In re Seagate.

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As I posted yesterday afternoon, the jury came back for Trading Technologies ("TT").  The jury found that eSpeed willfully infringed TT's patents for a six month period in 2004, found the patents valid and awarded $3.5M in damages.  The parties have not completed their bench trial on inequitable conduct.  So, the Court may still hold the patents invalid based upon inequitable conduct, which would render the $3.5M damages award moot.  But unless and until that happens, the award stands and has the potential to be as much as trebled based upon the willfulness finding. 

There has been some press coverage already.  Here is some of the best:

• Crain's Chicago Business
  
• Wall Street Journal (subscription required)
  
• Ad Hoc News
  
• CNN Money (AP story)
  
• Futures Magazine
  
• Reuters

You can read much more about this case and its related cases in the Blog's archives by clicking here.

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The jury continued its deliberations yesterday and reconvened this morning.  That is not a very informative update, but based on the Blog's traffic this week people are looking for updates on the case.  And that is all there is right now.

A relative who is a criminal defense attorney, often said that longer jury deliberations benefited the defense.  Of course, when he had a close case and a fast jury, he sometimes thought that benefited the defense also.  It is difficult to read the tea leaves with a jury.  But I will let you know as soon as I learn the jury's verdict.  For more on the case and Trading Technologies' related cases click here for the Blog's archives.

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Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04C 5312, Slip Op. (N.D. Ill. Sep. 25, 2007) (Moran, Sen. J.). 

Judge Moran denied plaintiff Trading Technologies’ (“TT”) supplemental summary judgment motion. The Court previously denied the original motions regarding the priority dates of the patents in suit.* In that opinion, the Court held that whether the patents could claim priority from their provisional application was a question of fact for the jury. The issue was whether disclosing the species of a single mouse click in the provisional application was sufficient support for the genus – a single action by the user – claimed in the patents in suit.

TT argued that eSpeed’s expert’s statement that the art – software engineering and user interface design – was predictable, was sufficient to take the patents out of the In re Curtis, 354 F.3d 1347 (Fed. Cir. 2004), exception (unpredictability of a species prevents support of a genus). The Court agreed that the factual issue was predictability of the art. But the Court held that eSpeed’s expert’s statement did not resolve the dispute. A generally predictable art does not mean that one of ordinary skill would understand the patentee’s description of the particular species (one-click) was necessarily in possession of the genus (one action). So the issue went to the jury.

As of this post, the jury still has this case.  I will let you know as soon as I learn the jury's verdict.  For more on this case and Trading Technologies' related cases click here for the Blog's archives.  And keep watching the Blog, while the jury deliberates and the parties try inequitable conduct to Judge Moran this week, I will continue catching up with some prior opinions from the case.

*  To read about the original summary judgment motions click here or for a copy of this opinion click here.

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Trading Technologies (“TT”) and eSpeed rested on the issues of infringement, validity and damages last week, and the jury now has the case.  I attended closings last Thursday. Both sides made strong, persuasive arguments for their desired outcomes. What I thought was most interesting about the closings, from a trial standpoint, was the use of themes. TT’s theme was a story of a boy who eats cookies knowing he is not supposed to and, when his Mom returns and asks him about it, tries repeated lies and distractions to avoid punishment. The story was simple and compelling. Also, it fit well with TT’s case theory, that eSpeed copied its patented software and was simply trying to avoid payment for it. The only problem I saw with the theme, putting aside whether it was supported by the evidence since I did not attend the entire trial, was that it was introduced in the middle of the closing and only referred to sporadically. As a result, even though it was likely a stronger choice of theme than eSpeed’s, it was distracting instead of being integrated into TT’s and, hopefully for TT, the jury’s thinking about the case.

eSpeed’s theme was that TT engaged in a pattern of overreaching, evidenced by exaggerations and partial truths. With each TT witness discussed during its closing, eSpeed identified an alleged exaggeration or partial truth from that witness. eSpeed’s consistent use of the theme was compelling and, although I cannot comment on whether it was supported by the facts at trial, likely resonated well with the jury.

There were a couple of other items worth mentioning from the closings. First, both parties barely touched upon damages. TT explained to the jury that it did not care what amount the jury awarded (either above or below TT’s proposed $3.5M - $4.5M range. TT explained that its main interest was in maintaining the validity of its patents. eSpeed also appeared unconcerned with damages. It explained that the alleged infringement period was only about six months, noted the number eSpeed’s expert gave, assuming infringement -- $500,000 – and noted that TT chose not to cross examine eSpeed’s damages expert. 

Second, both parties used a substantial number of demonstratives during closings and largely used them effectively. But eSpeed used them slightly better. TT had a PowerPoint presentation including title and summary slides integrated into its closing, in addition to showing relevant pieces of evidence and testimony. In contrast, eSpeed went five or ten minutes into its closing before turning to demonstratives. And when it did, they consisted largely of evidence and testimony, without the summary PowerPoint slides. The effect of TT’s largely constant use of the slides was that the jury focused on the slides more than counsel (although they listened attentively throughout). Some would argue that because the slides made TT’s points in simple, pre-selected statements, TT wanted the jury’s focus on the slides. But I am a fan of old-fashioned human connection and eye contact. I think the jury will take more away from focusing on counsel than on his slides.

I will let you know as soon as I learn the jury's verdict.  For more on this case and Trading Technologies' related cases click here for the Blog's archives

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The parties have rested on the issues of infringement, validity and damages.  Closings were Thursday and the jury now has the case.  I attended the closings.  Look for my thoughts on them Monday morning -- unlike the Northern District, other government offices, the Post Office and many schools, the Blog will be working on Columbus Day.  Judge Moran will hear the inequitable conduct case beginning next week. 

I will let you know as soon as I learn the jury's verdict.  For more on this case and Trading Technologies' related cases in the Blog's archives click here.

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Trading Techs. Int’l., Inc. v. eSpeed, Inc., No. 04 C 5312, 2007 WL 2713335 (N.D. Ill. Sep. 12, 2007) (Moran, Sen. J.).

Judge Moran granted in part plaintiff Trading Technologies’ (“TT”) motion in limine, precluding defendant eSpeed from arguing to the jury that any feature requiring the specific sequence – a double mouse click, keying in a value and pressing the enter key – fell within the Court’s construction of a “single action.”* The Court reasoned that it defined single action from the perspective of the software end-user. And from the user prospective the double-click/quantity/enter sequence was clearly more than a single action.

The Court acknowledged that taking this decision from the jury was “unusual,” but the Court believed its decision was warranted because of the complexity of the case and how clearly outside the construction of single action the double-click/quantity/enter sequence was: 

The parties have no lack of theories, especially when it comes to invalidity and prior art. Therefore, as we are convinced that it would be impossible for a reasonable jury to find that the three steps described by eSpeed’s attorney could fit into our definition of single action, we grant TT’s motion to exclude evidence that it does. Rather than throw a non-starter at the jury or deal with this issue during post-trial motion practice, we exclude the evidence from the start. Although our decision is nearly akin to a partial summary judgment ruling, we are convinced that it is correct, it will save precious judicial resources, and simplify the case for the jury.  (Citations and footnotes omitted).

I understand that the trial is ongoing.  I am hoping to make it to closing arguments and will post about them if my schedule allows me to see them. 

* Click here to read much more about this case and its related cases in the Blog’s archives.

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Trading Technologies Int’l, Inc. v. eSpeed, Inc., (N.D. Ill.) (Moran, Sen. J.).

Last week, I attended several hours of the Trading Technologies (“TT”) v. eSpeed trial. I watched the direct exam of TT’s infringement expert. Unfortunately, because of an ill-timed lunch break and other responsibilities, I missed eSpeed’s cross-exam. The jury is made up of eight members and two alternates, equally split between men and women. To their credit and that of the Northern District’s jury pool generally, the jurors appeared very engaged, dressed appropriately for court and were taking detailed notes.

None of the issues that I have written about came up (click here for the Blog’s archive on the case), but I came away with several thoughts about making your case to a jury:

• TT’s PowerPoint slides were often, although not always, very dense. This led to a jury that was over-focused on the slides and not listening to the testimony. Of course, TT’s infringement case was on the slides so they may be comfortable with that. But I want the jury focused on my expert and her credibility, not her slides.
  
• Despite their occasional wordiness, TT’s expert interacted very well with his slides. When the expert stepped away from the witness stand and pointed out information on the slides, he recaptured the jury’s attention very well.
  
• When the expert relied upon deposition or trial testimony, TT put the testimony on a slide next to the person’s picture. This was an excellent way of humanizing the cold transcript. I suspect it also helped the jurors remember the testimony by attaching the words to a face.

I understand that trial will continue at least this week and maybe in to next week. I will try to observe the trial again, but I am traveling most of this week so it will not be until late this week or early next. And if I do make it back, I will do my best to watch both the direct and the cross of a witness or maybe both sides’ closings. That way I will be able to provide more perspective on the substance of the trial.

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Trading Technologies Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. Aug. 21, 2007) (Moran, Sen. J.).

Judge Moran denied the parties’ cross motions for summary judgment regarding whether GL Win with Trade Pad (“GL Trade Pad”) was invalidating prior art to plaintiff Trading Technologies’ (“TT”) patents. Defendant argued that the GL Trade Pad product was on sale prior to the critical date (the critical date was either March 2, 1999 or June 9, 1999, the Court previously held that it was a question of fact for the jury) based upon a February 19, 1999 software license (“February License”). But because the February License did not specifically name the GL Trade Pad software as part of the licensed software, both parties relied upon extrinsic evidence to prove whether GL Trade Pad was part of the February. The Court held that oral invalidity testimony must be corroborated by evidence other than additional interested oral testimony. eSpeed, therefore, corroborated its main witness’s testimony with Trade Pad software code and catalogs. eSpeed argued that this evidence showed that the Trade Pad software was made and sold on or before the February License and would have been included in the February License. But the Court held that eSpeed’s evidence did not meet its evidence of proving the sale by clear and convincing evidence. TT challenged each piece of eSpeed’s evidence and the Court could not decide summary judgment of invalidity based upon eSpeed’s remaining evidence – oral testimony of an interested party (GL is a defendant in a related case). The jury must weigh competing testimony and judge the witnesses' credibility. 

Trial started in this case the week of September 10. Expect to see several more opinions in this case and its related cases (there are two weighty summary judgment opinions still in my queue, as well as several other smaller opinions and orders). Additionally, I have some other obligations, but am planning to blog some of the trial. Stay tuned.

*You can read much more about this case and related cases in the Blog's archives.

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Trading Technologies Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. Aug. 16, 2007) (Moran, Sen. J.).*

Judge Moran granted in part plaintiff Trading Technologies’ (“TT”) motion for summary judgment regarding prior use and denied defendant eSpeed’s cross motion for summary judgment. TT argued for a March 2, 1999 critical date (one year before the March 2, 2000 filing of TT’s related provisional application). eSpeed argued that the provisional application did not fully describe the patented invention and that, therefore, the critical date was June 9, 1999 (one year before filing of TT’s parent application). The Court held that whether the provision application met the written description requirements was a question of fact for the jury. The Court, therefore, determined this summary judgment motion in the alternative, either if the jury found a March 2 or a June 9 critical date. eSpeed argued that various uses of TT’s software before March 2 constituted public use because trades were either completely or partially performed to test the software. But the Court held that this use of the software was only experimental and done solely for the purpose of making sure the software functioned properly. The trades that were initiated during the testing were canceled prior to completion, except in several discreet incidents where the users testified that they had intended to cancel the trades but forgot. eSpeed also argued that the software was reduced to practice before March 2. But the Court held that the software was not reduced to practice until March 2 based upon the developers’ testimony that they did not believe the software was fully functioning and were still testing it prior to March 2. The Court, therefore, granted TT summary judgment for pre-March 2 use of the software. 

The Court held that the March 2 to June 9 alleged use was a question of fact for the jury. eSpeed’s email, video and trading record evidence for the March 2 to June 9 period might constitute public use, but a question of fact remained.

Trial started in this case the week of September 10. Expect to see several more opinions in this case and its related cases (there are two weighty summary judgment opinions still in my queue, as well as several other smaller opinions and orders). Additionally, I have some other obligations, but am planning to blog some of the trial. Stay tuned.

*You can read much more about this case and related cases in the Blog's archives.

http://www.chicagoiplitigation.com/tags/trading-technologies/

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Trading Techs. Int'l., Inc. v. eSpeed, Inc., No 04 C 5312, Slip Op. (N.D. Ill. Aug. 27, 2007) (Moran, Sen. J.).*

Judge Moran denied defendant eSpeed’s motion to compel production of damages documents from plaintiff Trading Technologies (“TT”). eSpeed sought, among other things, monthly licensing reports, monthly product profitability reports and documents for determining TT’s costs and sales budgets. TT argued that it had already produced the requested information, to the extent that it was kept in the form requested. And to the extent that the information was not kept in the requested form, TT stated that it had provided documents sufficient to determine the requested information. Noting that counsel are officers of the Court, the Court relied upon TT’s representations and denied eSpeed’s motion because TT stated that the documents had been produced.

Trial is set to start in this case the week of September 10. Between now and then expect to see several more opinions in this case and its related cases (there are two weighty summary judgment opinions still in my queue, as well as several other smaller opinions and orders). Additionally, I have some other obligations that week, but am planning to blog some of the trial. Stay tuned.

*You can download this opinion here and you can read much more about this case and related cases in the Blog's archives.

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Trading Techs. Int'l., Inc. v. eSpeed, Inc., No 04 C 5312, Slip Op. (N.D. Ill. Aug. 27, 2007) (Moran, Sen. J.).*

Judge Moran denied plaintiff Trading Technologies’ (“TT”) motions to reconsider the Court’s grant of summary judgment of noninfringement regarding defendant eSpeed’s software utilizing automatic and drift recentering of a price axis (discussed here). This opinion is most notable for the Court’s blunt footnote acknowledging that this case will be appealed to the Federal Circuit and that, therefore, the Court believes that “speedy resolution” is in all parties’ best interests:

We recognize that TT may have a valid argument [that an amendment during prosecution did not narrow the claims] and note that this was a close call. We also recognize that our decision may have been influenced by the impending trial and our disinclination to reopen a significant issue for debate. We have previously noted that this case is certain to find itself in front of the Federal Circuit for ultimate resolution and acknowledge our place as a “way station” to the Court of Appeals. Therefore, we are further convinced that speedy resolution of all issues before this court is in everyone’s best interest. . . .

Certainly other courts have thought along these lines, but few voice these opinions. 

The Court denied TT’s motions, noting that while they may have come close to rehashing TT’s original arguments, they also more fully developed the arguments. First, the Court held that its narrow constructions of “common static price axis” and “static display of prices” (discussed here and here) were warranted by the intrinsic evidence. Because the Court relied upon the intrinsic evidence, it was not swayed by TT’s arguments that claims issued to TT in foreign jurisdictions (extrinsic evidence) required a broader definition. The Court also rejected similar arguments based upon a patent being prosecuted in the PTO on behalf of eSpeed, which was also extrinsic evidence.

Trial is set to start in this case the week of September 10. Between now and then expect to see several more opinions in this case and its related cases (there are two weighty summary judgment opinions still in my queue, as well as several other smaller opinions and orders). Additionally, I have some other obligations that week, but am planning to blog some of the trial. Stay tuned.

*You can download this opinion here and you can read much more about this case and related cases in the Blog's archives.

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Trading Techs. Int'l., Inc. v. eSpeed, Inc., No 04 C 5312, Slip Op. (N.D. Ill. Aug. 27, 2007) (Moran, Sen. J.).*

Judge Moran denied plaintiff Trading Technologies’ (“TT”) motion to preclude defendant eSpeed from arguing its prior sale defense at trial. In a previous Order, the Court struck eSpeed’s summary judgment motion regarding its prior sale defense because it was filed after a case deadline. The Court stated eSpeed could use its “full arsenal of defenses” with the jury.

Trial is set to start in this case the week of September 10. Between now and then expect to see several more opinions in this case and its related cases (there are two weighty summary judgment opinions still in my queue, as well as several other smaller opinions and orders). Additionally, I have some other obligations that week, but am planning to blog some of the trial. Stay tuned.

*You can download this opinion here and you can read much more about this case and related cases in the Blog's archives.

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Trading Techs. Int'l., Inc. v. eSpeed, Inc., No 04 C 5312, Slip Op. (N.D. Ill. Aug. 20, 2007) (Moran, Sen. J.).*

Judge Moran granted in part plaintiff Trading Technologies’ (“TT”) motion to bifurcate inequitable conduct from the rest of the trial – in another opinion issued on the same day, the Court denied defendant eSpeed’s motion to bifurcate willfulness and damages from the liability phase of the trial. The Court noted that bifurcation is the exception not the rule, but that Fed. R. Civ. P. 42(b) allows the Court to bifurcate trials for convenience, to avoid prejudice or when bifurcation benefits expediency and economy. The Court also explained that bifurcating inequitable conduct does not violate the Seventh Amendment, citing Gardco Mfg., Inc. v. Herst Lighting Co., 820 F.2d 1209 (Fed. Cir. 1987). 

TT sought an inequitable conduct bench trial after the conclusion of the jury trial. eSpeed asked the Court to try inequitable conduct before the jury and have the jury issue an advisory verdict pursuant to Fed. R. Civ. P. 39(c). The Court observed that there was substantial case law supporting both TT’s and eSpeed’s positions, showing the discretion the Court has on the issue. But the Court followed the reasoning of Judge Norgle in THK Am., Inc. v. NSK, Ltd., 1996 WL 33398071 (N.D. Ill. 1996). Judge Norgle bifurcated inequitable conduct, but heard the evidence of inequitable conduct each day after the jury was dismissed as the inequitable conduct evidence came up. The Court reasoned that this form of bifurcation prevented the jury from hearing potentially prejudicial evidence, while allowing witnesses not to have to return for additional days of testimony.

Trial is set to start in this case the week of September 10. Between now and then expect to see several more opinions in this case and its related cases. Additionally, I have some other obligations that week, but am planning to blog some of the trial. Stay tuned.

*You can download this opinion here and you can read much more about this case and related cases in the Blog's archives.

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Trading Techs. Int'l., Inc. v. eSpeed, Inc., No 04 C 5312, Slip Op. (N.D. Ill. Aug. 20, 2007) (Moran, Sen. J.).*

Judge Moran denied defendant eSpeed, Inc.'s (“eSpeed”) renewed motion to bifurcate willfulness and damages from the liability phase of the trial.  The Court denied eSpeed's original bifurcation motion.  The Court noted that since the initial motion, the Court had issued claim constructions largely favorable to eSpeed and summary judgment of noninfringement as to the majority of eSpeed's accused products.  But the Court had also denied eSpeed's motions for summary judgment of invalidity, leaving invalidity to be resolved by the jury.  The Court reasoned that the Real v. Bunn-O-Matic, 195 F.R.D. 618 (N.D. Ill. 2000) factors weighed in favor of not bifurcating the trial or were neutral.  The Court's summary judgment of noninfringement rulings severely limited the damages case and "significantly simplified" the infringement issues. 

The Court also held that eSpeed would not be prejudiced because of a Quantum dilemma.  The Court explained that the Quantum dilemma -- created when a defendant had to choose between maintaining privilege and defending itself against willfulness allegations by producing an opinion letter -- was substantially limited by the Federal Circuit's Knorr-Bremse Sys. v. Dana Corp., 383 F.3d 1337 (Fed. Cir. 2004) decision eliminating the adverse inference where defendant did not obtain or produce an opinion of counsel.  The Court also noted that any potentially prejudicing evidence at trial could be cured with a limiting instruction.

Trial is set to start in this case the week of September 10. Between now and then expect to see several more opinions (including another this week on a bifurcation issue) in this case and its related cases. Additionally, I have some other obligations that week, but am planning to blog some of the trial. Stay tuned.

*You can download this opinion here  and you can read much more about this case and related cases in the Blog's archives.

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Trading Techs. Int'l., Inc. v. eSpeed, Inc., No 04 C 5312, Slip Op. (N.D. Ill. Aug. 17, 2007) (Moran, Sen. J.).*

Judge Moran denied plaintiff Trading Technologies’ (“TT”) motion to compel an additional Fed. R. Civ. P. 30(b)(6) witness. TT noticed a 30(b)(6) deposition of defendant eSpeed, Inc. (“eSpeed”) identifying twenty four topics, including someone with knowledge of the names of customers or potential customers of eSpeed’s accused products. eSpeed provided a witness on the topic, but he was only able to identify eSpeed’s customers and potential customers, he had no knowledge regarding any demonstrations to those customers or use of the accused products by those customers. TT, therefore, served a second notice, after the close of fact discovery, seeking a witness to testify regarding any demonstrations to or use by eSpeed customers. eSpeed refused to produce a witness in response to the second notice. The Court denied TT’s motion to compel because the original deposition sought only the identity of the customers, so the witness did not need to have any knowledge regarding demonstrations to or use by those customers. 

What is most interesting about this opinion, however, is the Court’s statements regarding the fact discovery history of the case. The Court shows some frustration with what appears to have been a very protracted and contentious discovery process:

Both parties in this case have been pushing discovery up to and through the close of discovery, which has been extended time and time again . . . . Enough is enough.

Trial is set to start in this case the week of September 10. Between now and then expect to see several more opinions in this case and its related cases. Additionally, I have some other obligations that week, but am planning to blog some of the trial. Stay tuned.

*You can download this opinion here and you can read much more about this case and related cases in the Blog's archives.

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Trading Techs. Int'l., Inc. v. eSpeed, Inc., No 04 C 5312, Slip op. (N.D. Ill. June 20, 2007) (Moran, Sen. J.).*

Judge Moran granted defendants (collectively "eSpeed") summary judgment of noninfringement regarding eSpeed's Dual Dynamic, eSpeedometer and Modified eSpeedometer products (collectively the "Products").**  The Court held that none of the Products met the "static" limitation in the claim terms "common static price axis" and "static display of prices."  In previous opinions, the Court construed and reconstrued "common static price axis" as:

a line comprising price levels that do not change positions unless a manual re-centering command is received . . . .

(emphasis added).  The Court also construed "static display of prices" as:

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

(emphasis added).  Because each of the Products included either an automatic re-centering feature or "drift" re-centering (automatic re-centering in response to market changes), the Court held that the Products did not meet the "static" limitation and, therefore, did not literally infringe plaintiff Trading Technologies' ("TT") patents.  In support of its ruling, the Court cited its claim construction reconsideration opinion (discussed in the Blog's archives), where it explained that "any movement of the static price axis leaves accused technology outside the protection of [TT's] patents."

The Court also held that the Products do not infringe pursuant to the doctrine of equivalents.  With respect to the Products that used automatic re-centering, the Court held that regardless of how infrequent the re-centering might occur a holding that automatic changing of positions was equivalent to only changing positions manually would "vitiate the 'static' requirement."  The Court held that the Products that used "drift" re-centering were equivalent because there was a "mouse lock" mechanism to ensure a trader never lost a price (the purpose of the "static" requirement").

But the Court held that prosecution history estoppel barred TT from relying upon the doctrine of equivalents with respect to the "static" limitation.  During prosecution, TT amended its claims adding the requirements that the "static price axis" and the "static display of prices" could "not move."  These amendments barred use of the doctrine of equivalents.

The Court also addressed the parties' arguments with respect to the "order entry region" limitation despite the fact that it could not change the outcome of the Court's decision "[b]ecause [the Court was] convinced that regardless of the outcome, this case will surely make its way to the Federal Circuit . . . ."  The Court explained that it "would likely determine" that the Products contain an "order entry region" and grant summary judgment on that issue for TT.  But because the Products did not meet the "static" limitation, the Court granted summary judgment of noninfringement for eSpeed.

*  You can download this opinion here and you can read much more about this case and related cases in the Blog's archives.

**  The Products are not eSpeed's only accused products, so this decision does not remove eSpeed from the case.

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Trading Techs. Int'l., Inc. v. eSpeed, Inc., No 04 C 5312, 2007 WL 1628352 (N.D. Ill. Mar. 1, 2007) (Moran, Sen. J.).

Judge Moran denied plaintiff Trading Technologies' ("TT") motion for a protective order to prevent the deposition of Robert Klinger, related to defendant eSpeed's inequitable conduct defense (more on this case in the Blog's archives).  The Court held that discovery is a "balancing act."  eSpeed's assertion that Klinger was involved in drafting a response to a USPTO Office Action at the center of its inequitable conduct claim outweighed TT's best argument -- that the deposition was duplicative because defendants had deposed or have scheduled the depositions of two lead outside patent prosecutors, TT's in-house patent prosecutor and the relevant patent examiner.  The Court also noted that the case is approaching the discovery close, so we may start seeing fewer discovery motions in the case and more substantive motions.

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Trading Techs. Int'l., Inc. v. GL Consultants, No. 05 C 4120, Slip Op. (N.D. Ill. May 17, 2007) (Gottschall, J.).*

Judge Gottschall denied defendant GL Trade SA's ("GL SA") motion to dismiss for lack of personal jurisdiction, with leave to refile after completion of jurisdictional discovery.  GL SA is a French company located in Paris.  GL SA does not have an office or any assets in Illinois, but it does have a subsidiary, defendant GL Americas, Inc. ("GL Americas").  GL Americas maintains a regional office in Chicago.  The Court noted that despite three rounds of briefing on jurisdiction, neither party "provided anything of substance to the court."  Plaintiff Trading Technologies ("TT") treated GL SA's subsidiary GL Americas as GL SA, and had not submitted evidence of GL SA's specific contacts with Illinois.  GL SA submitted several declarations, but none sufficiently clarified that GL SA did not have minimum contacts with Illinois.  As a result, the Court held that it lacked sufficient evidence to rule upon the motion, and granted TT's motion for jurisdictional discovery.

After ruling on the motions, the Court offered its jurisdictional analysis as a "framework" for the issues the parties should address through the discovery process.  First, the Court pointed out that neither party had detailed GL SA's specific contacts with Illinois.  Neither party identified which software products were GL SA products and which were GL Americas products.  Furthermore, neither party identified any sales of GL SA or GL Americas products to Illinois consumers.  The Court noted that if none of the GL SA products at issue were sold in Illinois, the Court would not have specific jurisdiction over GL SA.  And if there were sales to Illinois consumers, discovery was still required to show whether GL SA had a purpose and intent to serve the Illinois market.  Finally, the Court noted that TT must make its case for the Court's jurisdiction over GL SA based upon GL SA's actions, without imputing GL America's actions or contacts to GL SA.

*More analysis of opinions from this case and the various related TT cases, can be found in the Blog's archives. 

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Trading Techs. Int'l., Inc. v. eSpeed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. May 17, 2007) (Moran, Sen. J.).

Judge Moran denied plaintiff Trading Technologies' ("TT") motion to compel additional production from third party Chicago Mercantile Exchange ("CME").  TT served CME with a subpoena seeking, among other things, anything referring or relating to potential prior art to the patents at issue and communications between CME and any other entity regarding the patents at issue, including any joint defense agreement between CME and such parties.  After TT filed the motion to compel, CME produced thousands of pages, including what it stated were all documents in its possession regarding possible prior art.  Because all prior art documents had been produced, the Court denied TT's motion to compel additional prior art-related documents.

The Court also denied TT's motion to the extent it sought communications regarding the possible prior art.  First, the Court considered any communications CME might have had with defendants in the currently pending cases.  The Court referred to its May 1, 2007, order which required defendants to produce a list of all members in their joint defense agreement (that opinion and order, as well as numerous other opinions from this and its related cases, are in the Blog's archives).  The Court held that defendants' list would allow TT to discover whether CME was involved in a joint defense and that no further discovery from CME was necessary. 

Second, the Court considered CME's communications, including potential joint defense agreements, with any parties not involved in TT's pending suits.  The Court held that the common interest doctrine could attach to communications even before the filing of a suit, so long as the parties anticipated litigation.  Furthermore, the Court held that regardless of whether CME's communications with other third parties were part of a joint defense, they were not discoverable because they were "irrelevant" to this case.  The Court explained that while relevance is broadly defined, it does have boundaries and TT's motion ran "up against such a boundary."

*  Because Westlaw has not published this opinion yet, here is a copy of Judge Moran's original, signed opinion.

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Trading Techs. Int'l., Inc. v. eSpeed, Inc., No. 05 C 4120, (N.D. Ill. May 16, 2007) (Moran, Sen. J.).

Judge Moran granted in part and denied in part plaintiff Trading Technologies' ("TT") motion to compel additional production from defendants GL Consultants, Inc. and GL Trade SA (collectively "GL").  The Court required GL to update certain interrogatory responses and to produce documents based upon an earlier priority date that GL had argued for, as opposed to stopping at the later priorit date alleged by TT.  The Court also required GL to provide TT access to original source code and certain electronic archives, without regard to whether TT had provided GL similar access.  Finally, the Court denied TT's request to lower the confidentiality designation of the source code for GL's "GL Tradepad" software.  But what is most interesting about the Court's opinion is its reminder to the parties about how the Court expects them to conduct discovery:

At the outset, we reiterate some of the points regarding discovery that we have stressed throughout this complicated and contentious litigation. First, parties should err on the side of over-production; relevance should be argued sparingly. Second, counsel are officers of the court and their word is generally sufficient. Third, there will always be additional persons to interview, additional documents to discover, and alleged prior art to be found; we must, however, put an end to discovery at some point. . . . With such guidelines in mind, we address the current dispute.

* Because Westlaw has not published this opinion yet, here is a copy of Judge Moran's original, signed opinion.

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Trading Techs. Int'l., Inc. v. eSpeed, Inc., No 04 C 5312, 05 C 1079, 05 C 4088, 05 C 4120, 05 C 4811 & 05 C 5164, 2007 WL 1302765 (N.D. Ill. May 1, 2007) (Moran, Sen. J.).

Judge Moran granted in part and denied in part plaintiff Trading Technologies' ("TT") motion to compel production of defendants' communications between themselves (more on this case in the Blog's archives).  Defendants asserted claims of attorney-client and work product privileges regarding various communications and information exchanged as part of a joint defense agreement among, at least, the various defendants and DJ-plaintiff (collectively "defendants") in the patent suits regarding TT's patents.  The Court explained that the joint defense privilege protects communications and exchange of information between parties that have expressly decided to cooperate in a litigation -- with or without a written agreement.  The Court held that defendants had expressed a sufficient intent to cooperate in their respective litigations against TT and, therefore, held that defendants need not produce communications made in relation to their joint defense.  The Court required that defendants produce any written joint defense agreement or, in the absence of a written agreement, the identities of all members of the joint defense.  The Court further held that third parties need not be identified to the extent that their identities are protected as work product, but that third parties should be identified if defendants' communications with them are allegedly protected by attorney-client privilege.  The Court also required that defendants produce all prior art in their possession, regardless of how it was located.  And finally, the Court noted that "it must rely on the integrity of counsel to determine what is and is not privileged."  As a result, the Court required that defendants produce "any communications not protected by a legitimate privilege . . . ."

You can download the opinion here.

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Trading Techs. Int'l., Inc. v. eSpeed, Inc., No 04 C 5312, 2007 WL 704525 (N.D. Ill. Mar. 1, 2007) (Moran, Sen. J.).

Judge Moran granted plaintiff Trading Technologies' ("TT") motion to compel production of documents and answers to interrogatories regarding defendant eSpeed's patent licenses (more on this case in the Blog's archives).  The Court held that the licenses could be relevant to three of the Georgia Pacific factors:  1) Rates paid by the licensee for patents similar to the patents in suit; 2) customary royalty rates in the industry; and 3) the royalty that would have been agreed upon in an arms length negotiation.  The Court acknowledged that the eSpeed licenses were not for the same technology as the patents in suit, but held that the fact that the patents were all for technology within the futures trading industry was sufficient to make them potentially relevant.  And the Court noted that if the eSpeed patents are ultimately not comparable to the patents in suit, the licenses covering the eSpeed patents will not be given weight in the final determination.

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Trading Techs. Int'l., Inc. v. eSpeed, Inc., No 04 C 5312, 2007 WL 611258 (N.D. Ill. Feb. 21, 2007) (Moran, Sen. J.).

Judge Moran denied plaintiff Trading Technologies ("TT") motion for clarification of the Court's claim construction or in the alternative for reconsideration (more on the claim construction and the case generally here).  TT sought clarification of the Court's construction of "static" and a correction to the Court's construction of "plurality."  The Court defined "static" relative to a "price axis" as a line that does not change position unless it is manually re-centered.  TT sought clarification as to whether a product that had a "static" "price axis" for periods of time in between automatic re-centering would fall within the definition of "static" at least for part-time infringement.  The Court denied to clarify the construction as TT requested and held that for something to be "static" it must have "a permanent lack of movement."

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Trading Techs. Int'l., Inc. v. eSpeed, Inc., No 04 C 5312, 2006 WL 3541933 (N.D. Ill. Dec. 5, 2006) (Moran, Sen. J.).

Judge Moran denied plaintiff Trading Technologies ("TT") motion to compel additional deposition testimony from third party Brucato, the founder of TT's competitor Catus Technologies.  TT subpoenaed Brucato's deposition relating to Catus's work with defendant eSpeed or TT's software.  Brucato appeared for the deposition and answered questions on those topics, but refused to answer questions regarding work for clients other than eSpeed.  TT argued that evidence of Catus's work with other third party clients was relevant to show proof of widespread copying, which is an indicia of non-obviousness.  The Court acknowledged that, but balanced the relevance against TT's need for the evidence and the hardship to Catus.  The Court found that TT's request was only based upon TT's suspicions or speculations as opposed to any hard facts and that the connection, therefore, was not strong enough to warrant the risk third party Catus faced in providing such information to its competitor TT.

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Trading Techs. Int'l, Inc. v. eSpeed, Inc., No. 04 C 5312, 2006 WL 3147697 (N.D. Ill. Oct. 31, 2006). (Moran, Senior J.)

Judge Moran issued this opinion construing the claims of the patents-in-suit after a Markman hearing.  There are two items of special note.  First, the opinion provides a thorough recitation of the claim construction standards post-Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005).  Second, the Court provides further proof that claim construction is an organic process which can change througout a case, with this succinct quote:

Although our preliminary injunction construction aligned with plaintiff's view, such construction was, simply put, preliminary.

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Ruling on several motions for protective orders, Judge Moran provided insight into the increasing use of multi-tiered confidentiality designations. Before the Court were numerous cases that originated before different judges, all involving Trading Technologies International, Inc. as either Plaintiff or Defendant-Counterclaimant. Before consolidation, differing protective orders were entered in several of the cases. Some of the orders provided for relatively simple two-tier designations ("CONFIDENTIAL" and "HIGHLY CONFIDENTIAL -- ATTORNEYS' EYES ONLY"), but others provided an additional designation for documents related to patent prosecution which were even more limited than the Highly Confidential documents. Documents with this designation were to be restricted to outside counsel, as well as a limited number of identified inside counsel and business persons who are not directly or substantially involved in the party's patent prosecution activities.

The Court ultimately allowed a third designation ("HIGHLY CONFIDENTIAL -- PATENT PROSECUTION") for "particularly sensitive product design information which is of the type that can be included in a patent application and form the basis, or part of the basis for a patent claim or claims." See Docket No. 365, Ex. B #3 (the Court's rulings at *2 are best understood by referencing this chart prepared by Defendant FuturePath Trading LLC).

This case is notable not just for the Court's willingness to allow a third tier of designation, but also for the Court's statements that it believes that attorneys take their confidentiality obligations seriously and that the restrictions detailed in protective orders are generally followed. That has generally been my experience (with some exceptions), but it is good to see that a court has found the same thing.

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