Patents & the Financial Services Industry

In Trading Technologies International Inc. v. eSpeed et al. (Fed. Cir. 2010), the CAFC upheld a $2.5 million infringement ruling against eSpeed Inc., a commodities exchange operator, and several of its affiliates.  The suit was brought by Trading Technologies International Inc. (TTI), which asserted U.S. Patent Numbers 6,766,304 and 6,772,132.

The patents-in-suit claim methods for displaying the market data for a commodity traded in an electronic exchange that includes a graphical user interface with “a dynamic display for a plurality of bids and for a plurality of asks in the market for the commodity and a static display of prices corresponding to the plurality of bids and asks.”  The GUI purportedly facilitates more accurate and efficient orders in a trading environment.  The problem solved by the invention relates to market fluctuations and rapid changes in bids and asks prices listed in those grids.  For example, when a trader wishes to place a buy at the inside market he may place the mouse cursor on the grids for the inside market and click the mouse.  However, as traders send bids and offers to the market, the price and quantity of the traded commodity change, which alter the inside market.  With earlier fixed grids, traders who wished to place an order at a particular price would miss that market opportunity if the inside market moved as the trader tried to enter an order, and in a fast moving market, missing an intended price could happen often and have very significant economic consequences.

The invention solved this problem by implementing static price levels, which are describe in more detail in the patents linked above:

(Claim 1 of the ’132 patent)

A method of placing a trade order for a commodity on an electronic exchange having an inside market with a highest bid price and a lowest ask price, using a graphical user interface and a user input device, said method comprising:

setting a preset parameter for the trade order;

displaying market depth of the commodity, through a dynamic display of a plurality of bids and a plurality of asks in the market for the commodity, including at least a portion of the bid and ask quantities of the commodity, the dynamic display being aligned with a static display of prices corresponding thereto, wherein the static display of prices does not move in response to a change in the inside market;

displaying an order entry region aligned with the static display prices comprising a plurality of areas for receiving commands from the user input devices to send trade orders, each area corresponding to a price of the static display of prices; and

selecting a particular area in the order entry region through single action of the user input device with a pointer of the user input device positioned over the particular area to set a plurality of additional parameters for the trade order and send the trade order to the electronic exchange.

 

(Claim 1 of the ’304 patent)

A method for displaying market information relating to and facilitating trading of a commodity being traded in an electronic exchange having an inside market with a highest bid price and a lowest ask price on a graphical user interface, the method comprising:

dynamically displaying a first indicator in one of a plurality of locations in a bid display region, each location in the bid display region corresponding to a price level along a common static price axis, the first indicator representing quantity associated with at least one order to buy the commodity at the highest bid price currently available in the market;

dynamically displaying a second indicator in one of a plurality of locations in an ask display region, each location in the ask

display region corresponding to a price level along the common static price axis, the second indicator representing quantity associated with at least one order to sell the commodity at the lowest ask price currently available in the market;

displaying the bid and ask display regions in relation to fixed price levels positioned along the common static price axis such that when the inside market changes, the price levels along the common static price axis do not move and at least one of the first and second indicators moves in the bid or ask display regions relative to the common static price axis;

displaying an order entry region comprising a plurality of locations for receiving commands to send trade orders, each location corresponding to a price level along the common static price axis; and

in response to a selection of a particular location of the order entry region by a single action of a user input device, setting a plurality of parameters for a trade order relating to the commodity and sending the trade order to the electronic exchange.

The district court ruled that eSpeed, Ecco, Eccoware, and eSpeed International nonwillfully infringed the two TTI patents, and the Federal Circuit affirmed.  One ruling of note related to the issue of priority.  On cross-appeal, eSpeed argued that the patents-in-suit did not deserve priority back to March 2, 2000, the filing date of the provisional application – both patents claimed priority back to a common provisional application – and that they were therefore invalid under the on-sale bar.

The crux of eSpeed’s argument about priority was that every claim of the patents-in-suit recites use of a “single action of a user input device,” but in contrast, the provisional application never used that phrase but instead referred only to “a single click of a computer mouse.”  It is well settled that, in order to enjoy the benefit the filing date of a provisional application, it must describe the invention in such a way that one of ordinary skill in the art “would understand that the genus that is being claimed has been invented, not just the species of a genus.”  eSpeed alleged that the district court erred in finding that one of ordinary skill in the art would understand the provisional application to mean that traders could enter orders through a “single action of a user input device.”

In its opinion, the Federal Circuit found that the patents-in-suit are indeed entitled to claim priority to the provisional application.  The provisional application distinguished between order entries performed in a single action and multiple-step actions, and the court agreed with TTI’s expert that the provisional did not distinguish a single-click from other types of single actions, and therefore one of ordinary skill in the art could read the provisional application to encompass any single actions.  Moreover, the parties’ experts did not dispute that one of ordinary skill in the art would have known about other forms of a “single action” such as a double-click or pressing a key.  The Federal Circuit reasoned that, considering the undisputed knowledge of those skilled in the art, disclosure of a species in this case provides sufficient written description and support for a later filed claim directed to a very similar and understandable genus.

In short, as long as the application did not distinguish a single-click from other types of single actions – such as a double-click or pressing a key – the disclosure of “a single click of a computer mouse” provides those skilled in the art with sufficient written description to support the broader “single action of a user input device.”  Presumably this would apply not just in a provisional/non-provisional context but also in a specification/claim context, where a claim recites a “single action of a user input device” and is sufficiently supported but a disclosure of “a single click of a computer mouse.”  This result makes sense; in the field of computer-based graphical user interfaces, skilled artisans understand a variety of I/O techniques, and this is particularly true in commodity trading interfaces or other financial transaction technologies.

“U.S. Bancorp stands to lose $200 million, and maybe more, in a patent dispute that the Minneapolis-based banking company and other banks across the country are fighting in a federal court in Texas…”

Read more here.

Plaintiff DataTreasury Corp. is asserting six U.S. patents against various defendants in this suit:

• U.S. Patent No. 5,910,988 for an invention in remote image capture with centralized processing and storage
• U.S. Patent No. 6,032,137 for an invention in a remote image capture with centralized processing and storage
• U.S. Patent No. 5,265,007 for an invention of a central check clearing system
• U.S. Patent No. 5,583,759 for an invention with a mechanism for expediting the deposit, transport, and submission of checks into the payment system
• U.S. Patent No. 5,717,868 for an invention with an electronic payment interchange concentrator
• U.S. Patent No. 5,930,778 for an invention with a system for expediting the clearing of financial instruments and coordinating the same with invoice processing at the point of receipt

Regent Markets Group, a Bahamas-based betting company, recently asserted U.S. Patent No. 7,206,762, against derivatives trading company IG Markets.  The patent, entitled “Betting system and method,” is directed towards an automated betting system and method for financial markets.  Specifically, the complaint alleges that Regent’s ‘762 patent is infringed by IG Markets’ PureDeal trading platform and that IG Markets contributes to and induces others to infringe the ‘762 patent.

Regent developed and operates an automated betting system that offers fixed-odds financial bets to the public over the Internet.  The patent explains the distinction between “spread bet” and a “fixed odds” bet:

Although betting in many diverse forms has been in existence for thousands of years, the concept of a bet on the future performance of one or more financial market indicators is a relatively recent one. Such a bet may take one of two forms, as will be described.

 

The first form of such a bet (the “spread bet”) is one which, if won by the making of a correct prediction, pays out a sum proportional to the market fluctuation. For instance, a speculator may bet that a given stock will fall within a set period of time, and, if this prediction is correct, may receive winnings in direct proportion to the amount by which the stock has fallen in that period of time.

 

The other form that such a bet may take is known as the “digital option”. Digital bets are of the same form as a traditional sporting bet in that the speculator predicts a certain event and receives either a fixed sum of winnings (if that event does occur) or no winnings (if the event does not occur). For instance, a speculator may bet that a certain stock index will rise to a certain level by a certain time. If the named index does reach this level, the speculator wins an agreed amount of money irrespective of any amount by which the index has exceeded the predicted level. It is this type of bet that is known as a “fixed odds” bet.

So, under a fixed-odds system, a speculator who bets that a certain stock index will rise at a certain level by a certain time wins an agreed amount of money.  To draw the analogy to sports betting, the fixed-odds betting on financial markets is akin sports betting where participants receive a point spread when betting on events such as college football, the NFL, or the NBA, and gamblers win if they accurately predict the winner of the event after the final score is adjusted by the point spread.  Similarly, fixed-odds betting also bears some resemblance to a “money line” wager when betting on sporting events such as tennis, boxing, NASCAR or other bets where winners are picked without regard for the point spread; gamblers are paid out according to the fixed money line ratios if they accurately predict the result of the event.

A couple of things caught my attention about this case.  First, speculation in the financial markets is not uncommon.  And although there is a distinction between investment and speculation, a certain degree of speculation exists in a variety of investment decisions.  Thus, even though some have tried to draw a line between speculators and investors, a more accurate description may be a continuum, with risk-bearing financial decisions that represent “investments” at one end and speculative betting, or essentially a form of gambling, at the other end.

In this context, I found it interesting that the patent was so unabashed as to frame the invention as a “betting system” without any backup position that the system was somehow something less than a method for speculators, but rather it had an investment component too.  This may not pose a problem in the U.S., where gambling patents are readily issued without concern for 35 U.S.C. §101, and the utility requirement is low and innovations are rarely found unpatentable for protecting methods that are illegal in certain jurisdictions or are considered to be immoral or offensive.  However, this is not uniformly true in other patent systems around the world.  For example, Article 5 of the Patent Law of China provides that “No patent right shall be granted for any invention that violates the laws of the State, goes against social morals or is detrimental to the public interest,” and this provision is routinely used to object to inventions directed towards gambling on the grounds that they are publicly recognized as detrimental to public interest and contrary to social morality.  Regent Market Group is organized under the laws of the Bahamas and based out of the British Isles where it is licensed and regulated by the Gambling Supervision Commission, and its founder, Jean-Yves Sireau, declares his residence and citizenship to be of Hong Kong.

Second, I think it will be interesting to see whether the defendants attack the patent’s validity, either before the District Court or through reexamination at the USPTO.  Though the patent’s claims are plainly directed to a method and system that calculates fixed odds for a bet, based on input from the user and data on the financial market, here is a sample of what a couple of the independent claims would look like if we simply changed the term “financial market” with a well-known gambling context such as, say, “sporting event”:

26.         A computer program embodied on a computer readable medium and operable on a central processing machine in communication with a data feed, for:

receiving one or more parameters from a user relating to a fixed-odds bet on an aspect of a sporting event;

obtaining data concerning the sporting event via the data feed;

calculating a fixed-odds price for the bet based on at least one of the parameters received from the user and the data obtained via the data feed; and

communicating the fixed-odds price to the user.

32.         A fixed-odds betting system comprising:

a user terminal operable to accept from a user multiple parameters relating to a fixed-odds bet on an aspect of a sporting event;

a data feed to a source of data concerning the sporting event; and

a central processing machine in communication with the data feed and the user terminal, the central processing machine operable to calculate a fixed-odds price for the fixed-odds bet based on at least one of the parameters input by the user and data obtained from the data feed.

Such sport betting systems and methods are presumably practiced at casinos, racinos, and even on the Internet, but some of the automated features may not predate the priority date of the patent (March 28, 2000).  Moreover, just because these limitations may have existed in a sports betting context does not necessarily render them obvious in a financial betting context.  For these reasons, I am eager to see how the defendant responds to what appears to be broad patent covering financial market speculation.

Mobile banking platform provider MShift files patent action against Digital Insight over mobile banking technology

MShift, Inc. has launched a patent infringement suit against Digital Insight Corporation as well as Digital Insight’s customers. Community Trust Financial Corporation and Community Trust Bank are named as co-defendants. The action asserts that the mobile banking technology that Digital Insight provides its banking customers infringes on a patent awarded to mShift in 2005. MShift technology powers over 200 US Mobile Banking applications for some of the largest financial institutions in America, as well as for local banks and regional credit unions across the USA.

 

The action, filed in the United States District Court in the Northern District of California, asserts that the mobile banking technology Digital Insight is providing its customers, such as Community Trust Bank, infringes on MShift’s United States Patent No. 6,950,881 (the ‘881 Patent’). The ‘881 Patent’ is entitled a ‘System for Converting Wireless Communications for a Mobile Device’ and was awarded to MShift on September 27, 2005. The ‘881 Patent’ is a fundamental patent that covers communications between a mobile device and a network site. The inventions of the ‘881 Patent’ enable mobile devices such as Smartphones to access network sites such as online or home banking sites by means of a conversion and adaptation engine which performs translations between the language of the network site (e.g. HTML) and the language supported by the mobile device (e.g., WAP, HDML, HTML) as required. By dynamically adapting and configuring data from one or more sources for presentation and use via mobile phones, the ‘881 Patent’ describes an innovative conversion engine that defines the modern mobile banking experience.

Ex parte Rodriguez, (Appeal 2008-000693)

In its Precedential Opinion penned by Allen MacDonald last fall, the Board of Patent Appeals and Interferences weighed in on the use of means-plus-function claims where the specification only discloses a general purpose computer.  In large part, this opinion just applies the Aristocrat Techs. Austl. Pty Ltd. v. Inter. Game Tech., 521 F.3d 1328 (Fed. Cir. 2008) and Blackboard, Inc. v. Desire2Learn Inc., 574 F.3d 1371 (Fed. Cir. 2009) cases, which essentially reiterate that when using a means-plus-function format to claim a programmed computer, the specification must disclose the corresponding structure in the form or a particular algorithm in order to satisfy §112, ¶6.

However, after reading the opinion, I noticed what I thought an interesting §112, ¶1 rejection for lack of enablement, in the alternative.  Essentially, the Board had found that §112, ¶6 applied to certain claim terms (“system configuration generator,” “system builder,” and “simulation verification environment”) but that there was no definite structure (i.e., algorithm) for these elements, and therefore they were indefinite under §112, ¶2.  Yet, the board went on to say that even “if § 112, sixth paragraph does not apply to these claim limitations, then we make an alternative rejection of [the] claims . . . for lack of enablement under 5 112, first paragraph because the claim elements are purely functional.”

I found the following discussion of what constituted “purely functional” claim language a rather useful claim drafting refresher, and it’s worth a read of the entire opinion if you have the time:

Scope of Enablement

Section 1 12 requires that the patent specification enable “those skilled in the art to make and use the full scope of the claimed invention without ‘undue experimentation’ ” in order to extract meaningful disclosure of the invention and, by this disclosure, advance the technical arts.

 . . .

 

Undue Experimentation - Wands Factors

Whether undue experimentation is needed is not a single, simple factual determination, but rather is a conclusion reached by weighing many factual considerations…

The Wands factors include:

      (1) the quantity of experimentation necessary,

      (2) the amount of direction or guidance presented,

      (3) the presence or absence of working examples,

      (4) the nature of the invention,

      (5) the state of the prior art,

      (6) the relative skill of those in the art,

      (7) the predictability or unpredictability of the art, and

      (8) the breadth of the claims. 

. . .

 

 Functional Claiming versus 35 U.S. C. § 112, sixth paragraph

35 U.S.C. 5 112, sixth paragraph, when enacted, was a statutory response to the Supreme Court’s decision in Halliburton Oil Well Cementing Co. v. Walker, 329 U.S. 1 (1946). In Halliburton, the Supreme Court held invalid an apparatus claim on the ground that it used “means-plus-function” term which was purely functional. Such a claim was improper because the means term with a stated function merely described a particular end result, did not set forth any specific structure, and would encompass any and all structures for achieving that result, including those which were not what the applicant had invented.

 . . .

 

 Functional Language In and Of Itself

We recognize that functional language does not, in and of itself, render a claim improper. . . [E]ven though the claim at issue recited the desired property of the composition in functional terms, the claim nonetheless tied that functional language to a definite structure. . .  [T]he scope of the functional claim language of claim 1 is so broad and sweeping that it includes all structures or means that can perform the function. It is not limited to any corresponding structure, material, or act disclosed in the specification and equivalents thereof.

 . . .

 

 § 112(1) Rejection Analysis

In the present case, as discussed supra, we are presuming that despite the lack of structure in the claims, it is not proper to perform claim construction under 112, ¶ 6 paragraph. That is, the “system configuration generator configured to generate,” “system builder configured to (i) build . . . and (ii) generate,” and “simulation verification environment configured to verify” elements of claim 1 do not require claim interpretation under 5 112, sixth paragraph.10 As such, the result would be that these three elements are each a functional recitation in that there is no structure presented in the claim element itself, and we are not required to import structure from the Specification into the claim under 35 U.S.C. 5 112, sixth paragraph. These claim elements are purely functional. . . [I]n this case and those like it, the purported “structures” in the claims are essentially black boxes not connoting any structure to the skilled artisan, and are merely circularly defined by their desired functions.

Obviously the Board found that these “black box” structures were not enabled and were therefore properly rejected under § 112, ¶ 1 under this alternative theory.  Again, the opinion is worth a read, if for no other reason to see the Board’s discussion of whether a “system builder” is a term that “has achieved recognition as a noun denoting structure.”  Answer Hint: I wouldn’t try using it in any claim that you’re drafting.

In the Federal Circuit decision In re Henry Gleizer, an applicant appealed a BPAI decision that had affirmed the examiner’s decision to reject all pending claims as being obvious.  The appellant, Henry Gleizer, represented himself pro se.

The invention relates to systems and methods for electronically facilitated transactions.  Claim 89 reads:

89. An automated transaction method for enabling a transaction of electronic funds and physical goods between a buyer and a seller, said automated transaction method comprising:

a. accessing information comprising:

(1) an electronic funds payment instrument information corresponding to said transaction of said electronic funds, and

(2) a shipping information corresponding to said transaction of said physical goods, said shipping information comprising a shipping address;

b. receiving said electronic funds using said electronic funds payment instrument information;

c. printing a shipping label comprising said shipping information, and a shipment tracking information;

d. checking a delivery status of said physical goods using said shipment tracking information; and

e. disbursing said electronic funds to a party comprising a customer selected from the group consisting of said seller and said buyer.

On appeal one of the Appellant’s arguments was that even if the prior art disclosed every limitation in claim 89, the prior art failed to show the specific sequence of steps required by the claim.

This can be powerful argument for financial services patent applications when demonstrating to the PTO that claims are not rendered obvious; often times a financial services innovation may appear – at least facially – to be obvious when compared to prior art, and the differences may appear too subtle to convince an examiner of patentability, except for the particular order or sequence in which the claimed steps of the innovation are performed.  In other words, sometimes the innovative features of financial services inventions are not appreciated by examiners until it is explained to them how certain steps of a process may or must be performed in a different order than is taught in the prior art.

This “temporal relationship” of steps may be achievable in a new electronic commerce method or other financial system/process due to a variety of reasons, such as processing or receiving certain data earlier or later (relative to other steps) than what occurred in the prior art.  In this case, the Appellant argued that the electronic funds must be received from the buyer prior to shipping the purchased goods and that such sequence was not shown in the prior art.  On its face, this may not seem like an overwhelming argument for non-obviousness, but in the overarching context of the invention it plays better when put into context.

Although such “order” arguments can have merit, unfortunately for the Appellant in this case, the Federal Circuit found that the requirement of receiving electronic funds prior to shipping the goods was disclosed only in the specification and is not an actual requirement of the claims:

We have held that unless the steps of a method actually recite or implicitly necessitate a specific order, the steps are not ordinarily construed to require one. Interactive Gift Express, Inc. v. Compuserve Inc., 256 F.3d 1323, 1342–43 (Fed. Cir. 2001). We agree with the Board that Gleizer has failed to show how a sequence of steps described in one embodiment mandates a narrow construction of the claim. See In re Bigio, 381 F.3d 1320, 1325–26 (Fed. Cir. 2004) (“Absent claim language carrying a narrowing meaning, the PTO should only limit the claim based on the specification or prosecution history when those sources expressly disclaim the broader definition.”). We therefore agree that the Board properly affirmed the examiner’s rejection of claim 89.

This of course does detract from the strength of non-obviousness based on the order claim steps are performed; it just means – as always – make sure the limitations that distinguish an invention over the prior art are in the claims.

In Encyclopaedia Britannica v. Alpine Electronics, Inc. (Fed. Cir. 2009), the Federal Circuit reaffirmed its view that “where the disclosed structure in a means-plus-function claim is a computer programmed to perform a function, the structure is a special purpose computer programmed to perform the disclosed algorithm, not a general purpose computer.”

Encyclopaedia Britannica asserted its patent directed to a computerized multimedia search system with multiple separate and independent entry paths for searching and retrieving textual and graphical information.  The lone independent claim in the patent invoked § 112 ¶ 6, and on summary judgment the district court held the claim invalid for indefiniteness.

In a pattern that we’ve seen a lot of recent litigation, when the defendant argued that the means-plus-function claim was invalid for indefiniteness, the plaintiff (Britannica) responded by asserting claim was not indefinite due to the specification disclosing sufficient corresponding structure for the element because a person of ordinary skill in the art would recognize that the specification inherently discloses a class of algorithms for performing the function of retrieving information from a database on a general purpose computer.

The Federal Circuit was quick to point out – as have all the other courts where this attractive-but-misguided argument is made – that showing that one of ordinary skill in the art could build the claimed device incorrectly conflates the disclosure requirement of § 112 ¶ 6 and the enablement requirement of § 112 ¶ 1.  In short, the Federal Circuit reaffirmed Aristocrat (means-plus-function limitations for computer-implemented functions require that some algorithm be disclosed in the specification, 521 F.3d at 1337) and WMS Gaming (a specification must disclose an algorithm that transforms a general purpose microprocessor to a “special purpose computer” programmed to perform the disclosed algorithm, 184 F.3d at 1349), and found the patent invalid.

The moral is certainly not that means-plus-functions claims have lessened value or that they cannot be a useful tool for computer-based claims.  The key is to carefully draft the specification to ensure that the means-plus-function claims are definite.

After filing a patent infringement suit against 42 banks — including Bank of America, Capital One, Citigroup, Goldman Sachs Group, JPMorgan Chase & Co. and Merrill Lynch & Co. — TQP obtained another settlement, this one from Citigroup Inc. and its subsidiaries.  The patent at issue is U.S. Patent Number 5,412,730, entitled “Encrypted data transmission system employing means for randomly altering the encryption keys,” issued in 1995, is directed towards online encrypted data transmissions technology.

TQP has already settled with Goldman Sachs, JPMorgan, Merrill Lynch and Morgan Stanley.  In September, TQP sued another group of online vendors including Ticketmaster, Apple, eBay and PayPal, alleging the same claims.

Update: TQP reached a settlement agreement with Capital One in its patent infringement suits over its online encrypted data transmissions patent.  The parties jointly filed to dismiss TQP’s claims against Capital One.

TQP and ING also jointly filed to dismiss the claims against ING.

Back in August, Phoenix Licensing filed a complaint in the U.S. District Court for the Eastern District of Texas, asserting its automated financial services marketing patents against more than three dozen insurers and financial companies, including Allstate, Prudential, Barclays, New York Life Insurance Co., PNC Bank, Hartford Financial Services Group Inc., Royal Bank of Scotland Group PLC, KeyCorp and Bank of America. Phoenix Licensing LLP et al v. The Allstate Corp. et al, case number 2:09-cv-00255-TJW.

The complaint claims that the defendants infringe two of its patents relating to marketing and sales of financial products:

• U.S. Patent Number 5,987,434, entitled “Apparatus and method for transacting marketing and sales of financial products,” which recites electronically collecting clients’ information and automatically selecting and presenting financial products appropriate for that client.  See, e.g., independent claim 2:

2. A method for using client information about clients comprising a plurality of client records to automatically select and present financial products appropriate for the clients, the method comprising:

 

automatically inputting into a computer-accessible storage medium the client information including the plurality of client records without human intervention between input of the respective client records, inputting information about the financial products, and inputting decision criteria pertaining to selection from among the financial products;

 

using a central processing unit in communication with the storage medium to select a subset of the financial products for each of the clients appropriate for that client using the client information, the financial products information, and the decision criteria; and

 

using an output device to prepare a client communication for each of the clients which identifies the subset of the financial products appropriate for that client.

• U.S. Patent Number 6,999,938, entitled “Automated reply generation direct marketing system”, which recites creating automatically generated customized replies in response to communications from customers and delivering them to the customers.  See, e.g., independent claim 1:

1. A method for automatically preparing customized replies to responses from one or more consumer entities, the method comprising:

 

receiving one or more responses from one or more consumer entities, said responses comprising nonpurchase requests and being in response to mass marketing communications relating to offerings for one or more financial products or services being offered as part of a mass marketing campaign;

 

automatically generating one or more replies, each of said replies being generated prior to receipt from a consumer entity of a purchase commitment of said one or more financial products or services being offered as part of said mass marketing campaign, each reply customized for a consumer entity using other than one or more of name, address and account number of said consumer entity, and responsive to a nonpurchase request received from said consumer entity, each of said replies specific to one of said responses or a subsequent response; and

 

delivering said replies to corresponding consumer entities.

In their Answers, the defendants of course asserted non-infringement and invalidity.  However, with the claims as broad as they are, the interesting part of the dispute – if it gets that far – may focus on the prior art.  On the other hand, the patents’ priority date goes back to 1996.

Back in 2007, Phoenix Licensing threatened legal action with the same two patents against State Farm Mutual Automobile Insurance. State Farm sued Phoenix, seeking declaratory judgment of noninfringement and invalidity of the patents.

On September 1, 2009, U.S. Patent Nos. 7,584,133 and 7,584,134 issued to Weather Risk Solutions LLC of Palm Beach, Florida.  The patents are entitled “Financial Activity Based on Tropical Weather Events” and “Graphical user interface for financial activity concerning tropical weather events” respectively, and they appear protect Weather Risk’s commodity option called Hurricane Risk Landfall Options.

The inventions provide for a financial activity network that allows participants to submit their prediction as to the point of landfall and/or point along the land track of a future strike of a natural event such as a hurricane or tropical cyclone.  If their predictions match the observed natural event, the successful, qualifying investors will share in the accumulated pooling of investment funds.

The natural event may be observed by an external objective independent information source whose observations, findings and conclusions are made available to the financial activity. The financial activity can include games of chance, games of skill, property value protection, derivative securities interests and secondary trading of financial assets by participants engaged in the financial activity.