Espeed, Inc. v. Brokertec Usa, L.L.C.

• Decision Date: 25 October 2004
• Docket Number: Civ.A. No. 03-612-KAJ.
• Citation: 342 F.Supp.2d 244
• Parties: eSPEED, INC.; Cantor Fitzgerald, L.P.; and CFPH, L.L.C., Plaintiffs, v. BROKERTEC USA, L.L.C.; Brokertec Global, L.L.C.; Garban, LLC; ICAP PLC; OM AB; and OM Technology (U.S.), Inc., Defendants.
• Court: U.S. District Court — District of Delaware

342 F.Supp.2d 244

eSPEED, INC.; Cantor Fitzgerald, L.P.; and CFPH, L.L.C., Plaintiffs, v. BROKERTEC USA, L.L.C.; Brokertec Global, L.L.C.; Garban, LLC; ICAP PLC; OM AB; and OM Technology (U.S.), Inc., Defendants.

Civ.A. No. 03-612-KAJ.

United States District Court, D. Delaware.

October 25, 2004.

COPYRIGHT MATERIAL OMITTED

Jack B. Blumenfeld, Julia Heaney, Morris, Nichols, Arsht & Tunnell, Wilmington, DE, for plaintiffs. Of counsel: Gary A. Rosen, Law Offices of Gary A. Rosen, P.C., David J. Wolfsohn, Alan C. Promer, Michele D. Hangley, Hangley Aronchick Segal & Pudlin, Philadelphia, PA.

Richard L. Horwitz, David E. Moore, Potter Anderson & Corroon LLP, Wilmington, DE, for defendants. Of counsel: James W. Dabney, Peter L. Simmons, Henry C. Lebowitz, Fried, Frank, Harris, Shriver & Jacobson LLP, New York City.

MEMORANDUM OPINION

JORDAN, District Judge.

I. INTRODUCTION

This is a patent infringement case, set for a jury trial beginning on February 7, 2005. Jurisdiction is proper under 28 U.S.C. §§ 1331 and 1338. Presently before me are four Motions for Summary Judgment (Docket Items ["D.I."] 466, 469, 472, and 475) and one Motion for Reargument on Claim Construction (D.I. 521) filed by eSpeed Inc., Cantor Fitzgerald L.P., and CFPH L.L.C. (collectively, "Plaintiffs" or "eSpeed") and two Motions for Summary Judgment (D.I. 479, 481) filed by BrokerTec USA LLC, et al., (collectively, "Defendants" or "BrokerTec"). On August 2, 2004, eSpeed filed a Motion for Partial Summary Judgment of No Invalidity Due to Obviousness (D.I. 466), a Motion for Partial Summary Judgment on Issue of Non-infringing Alternatives (D.I. 469), a Motion for Partial Summary Judgment of Literal Infringement (D.I. 472), and a Motion for Partial Summary Judgment on Issue of Inequitable Conduct (D.I. 475). On August 2, 2004, BrokerTec filed a Motion for Summary Judgment of Invalidity. (D.I. 479.) On August 3, 2004 BrokerTec filed a Motion for Summary Judgment of Non-Infringement. (D.I. 481.) For the reasons set forth herein, all of the Motions are denied, except for Defendants' Motion for Summary Judgment of Non-Infringement (D.I. 481), which is granted in part, solely as to noninfringement under the doctrine of equivalents as pertaining to the "control trading" claim limitation.

II. BACKGROUND

Because the procedural and factual history of this case is by now familiar to those concerned¹, I will set forth only those facts that are pertinent to the Motions under consideration.

eSpeed instituted this action on June 30, 2003, seeking a judgment of willful infringement of U.S. Patent No. 6,560,580 B1 (issued May 6, 2003) (the " '580 patent") against BrokerTec.

The '580 patent discloses "[a] data processing system for implementing transaction management of auction-based trading for specialized items such as fixed income instruments." ('580 patent, Abstract (D.I. 463, Ex. A).) The System provides "a highly structured trading protocol" (id.) that the parties commonly refer to as an electronic trading platform. See eSpeed I, 2004 WL 62490 at *1, 2004 U.S. Dist. LEXIS 385 at *3. The Plaintiffs argue that the Defendants operate two electronic trading platforms that infringe the '580 patent, namely, the BrokerTec ETN and the Garban ETC/GTN.² (D.I. 464 at 2.) Specifically, Plaintiffs allege that Defendants' electronic trading platforms infringe the "workup protocol" claimed in each of the independent asserted claims of the '580 patent, that is, claims 20, 22, 24, and 29. (Id. at 3-5.)

The application for the '580 patent, U.S. Patent Application No. 09-294526 (the " '526 application"), was filed on April 20, 1999. Claim 20 of the '526 application is set forth below with certain terms that correspond to the "workup protocol" of the '580 patent in italics:

20. A method of financial instrument trading implemented on a distributed workstation computer system, wherein said system provides for a predetermined trading protocol delineating trader access comprising the steps of:

(a) providing a Bid/Offer System State wherein customers participate by entry bid, offers, price and volume information;

(b) distributing said information to said plural workstations in essentially real time;

(c) receiving hits and/or lifts from said customers responding to pending bids/offers as displayed on said workstations;

(d) entering a Trading State wherein transactions are completed at a single price;

(e) returning to the Bid/Offer State after a preestablished termination event in said Trading State;

(f) tracking and outputting consumed trades from said Trading State.

('526 application, pp. 37-8 (D.I. 142 at 00254-55) (emphasis added).) The original claims in the '526 application, including the above cited claim, were rejected in the first office action from the Patent and Trademark Office (the "PTO") under 35 U.S.C. §§ 102 and 103. (D.I. 143 at 00612-19.) The applicants then petitioned the PTO to withdraw the rejection because the filling fee was not properly paid. (D.I. 143 at 00625-28.) Thereafter, the applicants filed a preliminary amendment cancelling all of the original claims and adding all of the claims in the now issued '580 patent. (D.I. 463, Ex. L.)

The claims filed in the preliminary amendment issued without further alteration. (D.I. 463, Ex. L.; '580 patent, col. 20, ll. 4-29.) Claim 20, set forth below with disputed claim terms in italics, exemplifies the claimed workup protocol that is in dispute:

A method implemented on a distributed workstation computer system for trading an item between passive participants and an aggressor participant, the method comprising:

providing a bid/offer system state wherein the passive participants participate by entering bids or offers at select prices and volumes for the item;

distributing the bids or offers to the workstations;

receiving a hit or lift from the aggressor participant in response to one or more of the bids or offers to trade a desired volume of the item at a desired price; and

transitioning to a trading system state wherein:

(a) a trade transaction is executed, at a defined price set by the hit or lift, between the aggressor participant and each passive participant whose bid or offer had been hit or lifted by the aggressor participant;

(b) a period of exclusivity is provided during which the aggressor participant and a designated passive participant may control trading by transacting additional volume of the item with each other at the defined price to the exclusion of other participants desiring to participate in trading; and

(c) upon termination of the period of exclusivity, new trade transactions involving the other participants are tested for and executed at the defined price without providing the other participants a period of exclusivity to control trading.

('580 patent, col. 20, ll. 4-29.) (emphasis added).

III. STANDARD OF REVIEW

Summary judgment is proper only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party bears the burden of proving that no genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n. 10, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Rockwell Int'l Corp. v. United States, 147 F.3d 1358, 1362 (Fed.Cir.1998). "A dispute about a material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Schering Corp. v. Geneva Pharm., Inc., 339 F.3d 1373, 1381 (Fed.Cir.2003) (internal citations omitted).

If the moving party has demonstrated an absence of material fact, the nonmoving party then "must come forward with `specific facts showing that there is a genuine issue for trial.' "Matsushita, 475 U.S. at 587, 106 S.Ct. 1348 (quoting Fed.R.Civ.P. 56(e)). The court will "view the evidence in a light most favorable to the non-movant, and draw all reasonable inferences in its favor." Group One, Ltd. v. Hallmark Cards, Inc., 254 F.3d 1041, 1045 (Fed.Cir.2001). The mere existence of some evidence in support of the nonmoving party, however, will not be sufficient for denial of a motion for summary judgment; there must be enough evidence to enable a jury reasonably to find for the nonmoving party on that issue. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

If the nonmoving party fails to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof, the moving party is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

IV. DISCUSSION

Based on the record before me, I conclude that, with the limited exception noted hereafter, there are genuine issues of material fact that prevent the entry of summary judgment.

A. Defendant's Motion for Summary Judgment of Non-Infringement

With regard to this motion, there is a material issue of fact regarding Defendants' infringement of the "control trading" limitation; however, Plaintiffs are barred from asserting the doctrine of equivalents as to this limitation, due to prosecution history estoppel.

1. Literal Infringement

In a patent infringement analysis, application of the claim to the accused process or product is a question of fact. Kustom Signals, Inc. v. Applied Concepts, Inc., 264 F.3d 1326, 1332 (Fed.Cir.2001). Summary judgment in patent suits is appropriate when it is apparent that only one conclusion regarding infringement could be reached by a reasonable jury. Telemac Cellular Corp. v. Topp Telecom, Inc., 247 F.3d 1316, 1323 (Fed.Cir.2001). Literal infringement is found only when each and every limitation of a claim is present in the accused product. Telemac Cellular Corp. v. Topp Telecom, Inc., 247 F.3d 1316, 1323 (Fe...