By Matthew Bultman
Law360 (April 30, 2019, 8:46 PM EDT) -- Trading Technologies has had a rocky couple of weeks at the Federal Circuit, a slide that continued Tuesday when the court ruled one of its patents on a graphical user interface used in electronic trading was invalid because it covered only an abstract idea.
The appeals court said in a precedential opinion that the Patent Trial and Appeal Board was correct to find the invention was not eligible for patent protection. The patent was challenged in the PTAB’s covered business method review program by brokerage firm Interactive Brokers.
“The claims ... make clear that ‘the focus of the claimed advance over the prior art’ is providing a trader with additional financial information to facilitate market trades, an abstract idea,” the appeals court wrote.
The decision comes after the Federal Circuit on April 18 upheld PTAB decisions invalidating three other Trading Technologies patents. The court similarly said those patents didn’t pass muster under a Supreme Court ruling that abstract ideas implemented using a computer are not eligible for patent protection.
Counsel for Interactive Brokers declined to comment Tuesday. An attorney for Trading Technologies could not immediately be reached.
Interactive Brokers has been feuding with Trading Technologies since at least 2010, when the latter filed an infringement lawsuit in Illinois federal court. A number of other financial services companies have been sued as well, which has led to a series of challenges at the PTAB.
During a hearing at the Federal Circuit, an attorney for Trading Technologies said more than a dozen of its patents have been swept into CBM review.
The problem this particular patent was meant to solve, according to court documents, was providing traders with information that wasn’t normally displayed on a trading screen — namely, profit and loss data associated with making a trade at a specific price.
Trading Technologies argued on appeal that the patent wasn’t even eligible for CBM review. The program is designed for patents related to financial products or services, but those that cover a technological invention are disqualified. The Federal Circuit wasn’t convinced.
“Merely providing a trader with new or different information is an existing trading screen is not a technical solution to a technical problem,” the court wrote. “Instead, it focuses on improving the trader, not the functioning of the computer.”
With respect to patent eligibility, Trading Technologies emphasized its invention arranged profit and loss data for a trade along an axis, something earlier trading screens lacked. It said this was enough to move the invention out of the realm of an abstract idea.
Federal Circuit judges pushed back on this idea during oral arguments in early April.
“I could absolutely see how it could be useful to a trader to know the profits and losses on a column,” Circuit Judge Kimberly Moore, the author of Tuesday’s opinion, said at the time. “I guess I just don’t understand how adding a new column of data to a display ... is patent eligible. That’s kind of a crazy concept to me.”
It hasn’t all been bad news for Trading Technologies at the Federal Circuit. In February, for example, the court threw out PTAB decisions invalidating four other patents challenged by Interactive Brokers because the court said they did not qualify for CBM review.
The patent at issue is U.S. Patent No. 7,783,556.
Senior Circuit Judge Raymond Clevenger sat with Circuit Judges Kimberly Moore and Evan Wallach on the Federal Circuit panel.
Trading Technologies is represented in-house by Steven Borsand and Jay Knobloch; and by Leif Sigmond, Michael Gannon, Jennifer Kurcz and Alaina Lakawicz of BakerHostetler, and Cole Richter of McDonnell Boehnen Hulbert & Berghoff LLP.
Interactive Brokers is represented by Richard Bemben and Robert Sokohl of Sterne Kessler Goldstein & Fox PLLC, and Michael Rosato of Wilson Sonsini Goodrich & Rosati PC.
The case is Trading Technologies International Inc. v. IBG LLC, Interactive Brokers LLC, case number 2017-2323, in the U.S. Court of Appeals for the Federal Circuit.
--Editing by Aaron Pelc.