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Trading Technologies International, Inc. v. Bcg Partners

May 5, 2011

TRADING TECHNOLOGIES INTERNATIONAL, INC.
PLAINTIFF,
v.
BCG PARTNERS, INC.
DEFENDANT.



The opinion of the court was delivered by: Judge Virginia M. Kendall

MEMORANDUM OPINION AND ORDER

In early 2010, Plaintiff Trading Technologies, Inc. ("TT") filed 12 cases in this District alleging various defendants have infringed and continue to infringe on its patents relating to electronic trading applications. On February 3, 2011, the Court consolidated these individual cases, spread across several judges, into a single proceeding. Now some of those defendants have moved to dismiss the respective complaints against them for failure to state a claim. SunGard Data Systems Inc., SunGard Investment Ventures LLC and GL Trade Americas, Inc. (together "SunGard") concede that TT has plead direct infringement of the patents-in-suit but its allegations of contributory and induced infringement are inadequate under Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009). FuturePath Trading LLC ("FuturePath") contends that TT has not sufficiently plead any claim under Twombly and Iqbal. For the reasons below, the Court denies SunGard's motion and grants FuturePath's motion.

I. TT'S ALLEGATIONS

The Court accepts the following well-pleaded allegations as true for the purposes of this motion to dismiss. Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008).

A. FuturePath

TT is the owner of four patents for electronic trading inventions issued between 2007 and 2010, Nos. 7,212,999 ("the '999 patent"), 7,533,056 ("the '056 patent"), 7,412,416 ("the '416 patent") and 7,676,411 ("the '411 patent"). (Amend. Compl. ("AC"), Doc. 17 (Case No. 10 C 720) ¶¶ 7, 16, 25, 34.)TT is in compliance with "any applicable marking and notice provisions" with respect to all four patents. (Id. ¶¶ 8, 17, 26, 35.) TT alleges FuturePath has infringed and continue to infringe these patents "by making, using, selling and/or offering for sale products covered by claims" of each of the four patents, (id. ¶¶ 10, 19, 28 36) without TT's authorization. (Id. ¶¶10, 19, 28, 36.) TT asserts that FuturePath "has infringed and continues to promote, advertise and instruct customer and potential customer about its products, including infringing uses," through its websites "and distribution of manuals, release notes and tutorials." (Id. ¶¶ 11, 20, 29, 37.) Finally, TT alleges FuturePath's "actions have and continue to constitute active inducement of and contributory infringement of" each of the four patents. (Id. ¶¶ 13, 22, 31, 39.)

B. SunGard

TT's allegations against SunGard are more detailed, but similar to, TT's allegations against FuturePath. TT is the owner of the '999, '056 and '411 patents for electronic trading inventions. (Second Amend. Compl. ("SAC"), Doc. 46 (Case No. 10 C 716) ¶¶ 11, 20, 29.) TT is in compliance with "any applicable marking and notice provisions" with respect to those three patents. (Id. ¶¶ 12, 21, 30.) According to TT, SunGard has infringed these patents by "making, using, selling and/or offering for sale products, including at a minimum the GL Win software" without TT's authorization. (Id. ¶¶ 13, 22, 31.) Citing various SunGard websites and attaching SunGard brochures, TT alleges that SunGard "[has] in the past and continue[s] to actively and knowingly aid and abet direct infringement by promoting, advertising and instructing customers and potential customers about the GL Win software and uses of the product, including infringing uses of the QuickTrade window." (Id. ¶¶ 14, 23, 32.)

TT alleges SunGard had "constructive knowledge" of the '999 patent as of November 15, 2007, when TT "added the '999 patent to the list of markings that appear on the opening screen of TT's X_Trader product." (Id. ¶ 15.) SunGard had constructive knowledge of the '056 and '411 patents for the same reason as of June 2, 2009 and March 24, 2010, respectively. (Id. ¶¶ 24, 25.) TT also asserts SunGard knew of the '411 patent because it is a continuation of a patent that TT claims SunGard infringed in a suit filed in 2005, and "SunGard would have been tracking any continuations of the [older patent] as a matter of course." (Id. ¶ 34.) TT further alleges that SunGard "knew or should have known that GL Win software is especially made or especially adapted for use in an infringement" of each patent and "there is no substantially non-infringing use of GL Win software's QuickTrade window." (Id. ¶¶ 16, 25, 36.) Finally, "[i]n addition, [SunGard's] actions constitute active inducement of and/or contributory infringement" of each patent. (Id. ¶¶ 17, 27, 36.)

II. STANDARD

A Rule 12(b)(6) motion to dismiss for failure to state a claim "is a purely procedural question not pertaining to patent law," so the Court applies Seventh Circuit precedent. See McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1356 (Fed. Cir. 2007). To state a claim upon which relief can be granted, a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). To survive a motion to dismiss, a complaint must be "plausible on its face." Iqbal, 129 S. Ct. at 1949 (quoting Twombly, 550 U.S. at 570); see also Swanson v. Citibank, N.A., 614 F.3d 400, 404 (7th Cir. 2010) (noting "'plausibility' in this context does not imply that the district court should decide whose version to believe, or which version is more likely than not.") A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949. Determining whether a complaint states a plausible claim for relief requires "the reviewing court to draw on its judicial experience and common sense." Id. at 1950. "Specific facts are not necessary . . . the statement need only give the defendant fair notice of what the claim is and the grounds upon which it rests." Swanson, 614 F.3d at 404 (citing Erickson v. Pardus, 551 U.S. 89, 93 (2007)). In short, under Iqbal, "the plaintiff must give enough details about the subject-matter of the case to present a story that holds together . . . the court will ask itself could these things have happened, not did they happen." Swanson, 614 F.3d at 404.

III. DISCUSSION

A. FuturePath - Direct Infringement

FuturePath contends that TT's amended complaint does not state a claim for direct infringement because it does not allege the specific FuturePath product that allegedly infringes on TT's patents, but rather uses the vague catch-all "products." Some courts suggest it does not need to name a specific product or type of product. See e.g., Traffic Information, LLC v. Yahoo! Inc., No. 09 C 246, 2010 WL 2545500 at *2 (E.D. Tex. Apr. 13, 2010) (finding a plaintiff did not need to allege the allegedly infringing products because it pled the title of the patent-in-suit). Those cases, however, are inconsistent with Iqbal, Swanson and McZeal. In McZeal, decided after Twombly but before Iqbal, the Federal Circuit discussed the federal rules form for a patent infringement case (then Form 16, now Form 18), noting that form requires only "(1) an allegation of jurisdiction; (2) a statement that the plaintiff owns the patent; (3) a statement that defendant has been infringing the patent 'by making, selling and using [the device] embodying the patent;" (4) a statement that the plaintiff has given the defendant notice of its infringement; and (5) a demand for ...


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