CQG, Inc. and CQGT, Llc.v.Trading Technologies International, Inc.

Patent Trial and Appeal Board

Sep 16, 2015

09894637 (P.T.A.B. Sep. 16, 2015)

Trials@uspto.gov Paper 15
Tel: 571-272-7822 Entered: September 16, 2015

UNITED STATES PATENT AND TRADEMARK OFFICE
_______________
BEFORE THE PATENT TRIAL AND APPEAL BOARD
_______________
CQG, INC. and CQGT, LLC,
Petitioner,

v.

TRADING TECHNOLOGIES INTERNATIONAL, INC.,
Patent Owner.
____________

Case CBM2015-00057 (Patent 6,766,304 B2)
Case CBM2015-00058 (Patent 6,772,132 B2)
_______________

Before SALLY C. MEDLEY, MEREDITH C. PETRAVICK, and
PHILIP J. HOFFMANN, Administrative Patent Judges.

MEDLEY, Administrative Patent Judge.

DECISION
Request for Rehearing
37 C.F.R. § 42.71
CBM2015-00057 (Patent 6,766,304 B2)
CBM2015-00058 (Patent 6,772,132 B2)

2

INTRODUCTION
CQG, Inc. and CQGT, LLC (collectively, “Petitioner”), filed a
Request for Rehearing (CBM2015-00057, Paper 14, “Req. Reh’g” 1) of the
Decision Denying Institution of Covered Business Method Patent Review
(Paper 13, “Decision” or “Dec.”) in both proceedings. Because the
rehearing arguments presented are the same for the two cases, we decide
both rehearing requests in one decision. In the rehearing requests, Petitioner
argues that we misapprehended or overlooked (1) that the dismissal of the
Colorado DJ Action was final, thereby rendering the action a nullity, (2) that
we should follow other Board cases and grant institution with similar facts,
(3) that counterclaims cannot bar institution of a CBM proceeding, and (4)
that actions taken after dismissal of the Colorado DJ Action were not a result
of the order dismissing the Colorado DJ Action. Req. Reh’g 1–2.
ANALYSIS
When rehearing a decision on petition, the Board will review the
decision for an abuse of discretion. 37 C.F.R. § 42.71(c). An abuse of
discretion may be determined if a decision is based on an erroneous
interpretation of law, if a factual finding is not supported by substantial
evidence, or if the decision represents an unreasonable judgment in weighing
relevant factors. Arnold Partnership v. Dudas, 362 F.3d 1338, 1340 (Fed.

1 Citations are to CBM2015-00057.
CBM2015-00057 (Patent 6,766,304 B2)
CBM2015-00058 (Patent 6,772,132 B2)

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Cir. 2004). For the reasons that follow, Petitioner has not shown that the
Board abused its discretion.
In the Decision, we determined that Petitioner’s filing of the Colorado
DJ Action before filing its Petitions prevented us from instituting a covered
business method patent review of either the ’304 or ’132 patents. Dec. 9.
Petitioner argues that we overlooked the fact that the order of dismissal of
the Colorado DJ Action was final without any conditions or procedures for
reinstatement. Req. Reh’g 3–5. Petitioner does not identify where in its
petition this argument was made previously. A rehearing request is not
proper for advancing arguments not made previously. 37 C.F.R. § 42.71(d).

In any event, we are not persuaded by Petitioner’s arguments that we
misinterpreted Brennan v. Kulick, 407 F.3d 603 (3d Cir. 2005), which
Petitioner argues makes clear that “a naked dismissal without prejudice
devoid of any conditions must be treated as a final order of dismissal.” Req.
Reh’g 4–6. Petitioner’s arguments are misplaced. We did not find that the
dismissal without prejudice was a naked dismissal. Dec. 3–4. As explained
in our Decision, the order was pursuant to “agreement of the parties” which
we found, based on substantial record evidence, included all that was in the
Proposed Minute Order (Ex. 1012). Id. Petitioner does not show
sufficiently that we abused our discretion by making that finding. Rather,
Petitioner’s rehearing request does not take into account all of the language
of the order, but focuses only on certain words of the order, while ignoring
other words.
CBM2015-00057 (Patent 6,766,304 B2)
CBM2015-00058 (Patent 6,772,132 B2)

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We also are not persuaded by Petitioner’s argument (Req. Reh’g 6–
10) that we should follow other Board cases and grant institution with
“identical facts,” because those cases are not based on identical facts.
Indeed, Petitioner does not direct us to where in any of the dismissal orders
of those cases the dismissals were based on an agreement of the parties that
included all of the content in the Proposed Minute Order of these cases.2
Petitioner argues that the Decision erred in determining that “DJ
claims can effectively continue as counterclaims” in violation of 35 U.S.C.
§ 325(a)(3) and that counterclaims of invalidity are irrelevant to a Section
325(a)(1) analysis. Req. Reh’g 10–11. Notwithstanding that this is a new
argument, not presented previously, the argument is without merit. The
requirements of 35 U.S.C. § 325(a)(3) are of no moment to whether
Petitioner is barred under 35 U.S.C. § 325(a)(1). Unequivocally, section
325(a)(1) precluded us from instituting a covered business method patent
review because, prior to filing its petitions, Petitioner filed a civil action
challenging the validity of a claim of the challenged patents.
We also are not persuaded by Petitioner’s arguments that it did not
add an invalidity counterclaim after dismissal of the Colorado DJ Action.
Req. Reh’g 11–14. Per the Amended Answer, Affirmative Defenses and
Counterclaims submission filed with the Illinois Court (Ex. 1014), Petitioner

2 Petitioner argues that the agreement of the parties (e.g., the Proposed
Minute Order) is silent as to any consolidation. Req. Reh’g 8, fn 3. The
Proposed Minute Order (Ex. 1012) contemplates, as part of the parties’
agreement, granting an already filed motion to reassign and consolidate. Ex.
1012.

CBM2015-00057 (Patent 6,766,304 B2)
CBM2015-00058 (Patent 6,772,132 B2)

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included the same assertions of invalidity (page 7, paragraph 10) that it
included in the Colorado DJ Action (Ex. 1003, ¶ 18). It is of no moment that
the original answer in the Illinois Infringement Action already included a
counterclaim directed to invalidity. Petitioner, by way of the order from the
Illinois Court was authorized to amend its answer in the Illinois
Infringement Action, and Petitioner took full advantage of doing so by
maintaining and including assertions of invalidity. Lastly, we find
unpersuasive Petitioner’s argument that because Rule 15(a)(2) of the Federal
Rules of Civil Procedure permits liberal amendment of counterclaims, that
that is the reason Petitioner chose to file an Amended Answer; not because
the Illinois Court authorized the amended answer. Req. Reh’g 14–15.
Again, this is a new argument not presented previously. More importantly,
however, the argument is unsupported by record evidence, which tends to
show the opposite. The Amended Answer, Affirmative Defenses and
Counterclaims (Ex. 1014) was filed with the Illinois Court immediately
after, and on the same day as, the court’s order granting Petitioner leave to
file that paper.
For all of the above reasons, Petitioner’s Requests for Rehearing are
denied.

CBM2015-00057 (Patent 6,766,304 B2)
CBM2015-00058 (Patent 6,772,132 B2)

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PETITIONER:

Adam G. Kelly
William J. Kramer
William J. Voller, III
LOEB & LOEB LLP
akelly@loeb.com
wkramer@loeb.com
wvoller@loeb.com

PATENT OWNER:

Erika H. Arner
Joshua L. Goldberg
FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER, LLP
erika.arner@finnegan.com
joshua.goldberg@finnegan.com

Steven F. Borsand
TRADING TECHNOLOGIES INTERNATIONAL, INC.
Steve.Borsand@tradingtechnologies.com