OANDA vs GAIN Capital – battle over patents erupts in New Jersey Court

Maria Nikolova

OANDA accuses GAIN Capital of patent infringement but GAIN says the complaint contains almost no factual allegations specific to its products.

Two online trading majors – OANDA Corporation and GAIN Capital, have clashed in Court over alleged patent infringement.

A lawsuit has been filed by OANDA against GAIN Capital Holdings, Inc. and GAIN Capital Group, LLC (operating as FOREX.com) at the New Jersey District Court. FinanceFeeds has been monitoring the developments in this case, and, now that GAIN has responded to OANDA’s allegations, we are ready to provide our readers with an overview of this case.

In brief, OANDA accuses GAIN of patent infringement. The patents at the heart of this lawsuit are U.S. Patent Nos. 7,146,336 (“the ’366 patent”) and 8,392,311 (“the ’311 patent”).

The ʼ336 Patent teaches, inter alia:

“In one aspect, the present invention comprises a system for trading currencies over a computer network. A preferred embodiment comprises: (a) a server front-end; (b) at least one database; (c) a transaction server; (d) a rate server; (e) a pricing engine; (f) an interest rate manager; (g) a trade manager; (h) a value at risk server; (i) a margin control manager; (j) a trading system monitor; and (k) a hedging engine. In another aspect, the present invention comprises methods for trading currency over a computer network. In another aspect, the present invention comprises software for currency trading over a computer network”.

The ’311 Patent teaches, among other things:

“In one aspect, the present invention comprises a system for trading currencies over a computer network. A preferred embodiment comprises: (a) a server front-end; (b) at least one database; (c) a transaction server; (d) a rate server; (e) a pricing engine; (f) an interest rate manager; (g) a trade manager; (h) a value at risk server; (i) a margin control manager; (j) a trading system monitor; and (k) a hedging engine. In another aspect, the present invention comprises methods for trading currency over a computer network. In another aspect, the present invention comprises software for currency trading over a computer network”.

According to OANDA, GAIN has infringed one or more claims of the ʼ336 Patent by making, using, selling, offering for sale, or selling products and/or services that meet each of the limitations of one or more claims of the ʼ336 Patent. More specifically, OANDA alleges that GAIN Capital Group, LLC has made, used, sold, and offered for sale infringing instrumentalities at https://forex.com, and GAIN Capital Holdings, Inc. has used those infringing instrumentalities, including the application programming interfaces (APIs), to operate automated infringing trading systems.

OANDA insists that the defendants have continued to operate their online trading platforms and systems in an infringing manner, despite being notified of its infringement by the plaintiff on at least one occasion by letter specifically referencing the ʼ336 Patent.

Furthermore, OANDA argues that GAIN has infringed one or more claims of the ʼ311 Patent by making, using, selling, offering for sale, or selling products and/or services that meet each of the limitations of one or more claims of the ʼ311 Patent. More specifically, OANDA claims that GAIN Capital Group, LLC has made, used, sold, and offered for sale infringing instrumentalities at https://forex.com, and GAIN Capital Holdings, Inc. has used those infringing instrumentalities, including the APIs, to operate automated infringing trading systems.

OANDA alleges that the defendants have continued to operate their online trading systems in an infringing manner, despite being notified of their infringement by the plaintiff on at least one occasion by letter specifically referencing the ʼ311 Patent.

The plaintiff seeks judgment that the defendants contribute to and induce the infringement of one or more claims of the ʼ311 and ʼ336 Patents, literally and/or under the doctrine of equivalents. It also seeks an order for an accounting, as well as an award of damages pursuant to 35 U.S.C. §284 sufficient to compensate the plaintiff for defendants’ past infringements, and any continuing or future infringement, up until the date that the plaintiff’s patent expires.

On July 17, 2020, GAIN Capital Holdings, Inc. and GAIN Capital Group, LLC submitted a brief in support of their motion to dismiss under Fed. R. Civ. P. 12(b)(6) OANDA’s Complaint for Patent Infringement.

GAIN argues that OANDA’s Complaint contains almost no factual allegations specific to GAIN products and fails to even identify a single specific GAIN product. Instead, OANDA’s Complaint falls far short of the requirements for a sufficient patent infringement complaint, the defendants say.

“The body of OANDA’s Complaint simply identifies each patent, identifies one GAIN website by web address without naming any specific GAIN product as an accused product, and makes conclusory allegations of infringement, inducement, and willfulness”, GAIN notes.

Furthermore, GAIN argues that there are no specific allegations about the accused products or how they might infringe (other than conclusory statements parroting the patent claims), and there is no indication that OANDA knows the answers to those questions.

“Because OANDA’s Complaint presents a familiar situation of threadbare and perfunctory pleading that courts have seen before and deemed insufficient”, GAIN requests that the Court dismiss OANDA’s Complaint.

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