Trading Technologies International, Inc. v. BGC Partners, Inc.

Filing 2214

MEMORANDUM Opinion and Order signed by the Honorable Virginia M. Kendall on 1/11/2022. IBG's motion to correct or, in the alternative, amend the judgment #2136 is denied and TT's motion to amend the judgment #2137 is granted in part and denied in part. See Opinion for further details. Mailed notice(lk, )

Case: 1:10-cv-00715 Document #: 2214 Filed: 01/11/22 Page 1 of 8 PageID #:122941

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
TRADING TECHNOLOGIES
INTERNATIONAL, INC.,
Plaintiff,
v.
IBG LLC, et al,
Defendants.

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No. 10 C 715
Judge Virginia M. Kendall

MEMORANDUM OPINION AND ORDER
TT’s Third Amended Complaint accused IBG’s BookTrader product of infringing four of
its patents: the ‘304, ‘132, ‘411, and ‘996 patents. (Dkt. 1118). At summary judgment, the Court
held that the ‘411 and ‘996 patents were patent ineligible and granted partial summary judgment
in IBG’s favor. (Dkt. 1971). Following a jury trial on the remaining patents, the jury returned a
verdict in TT’s favor. (Dkt. 2134). The Court entered judgment as follows:
Jury Deliberations held and completed on 9/7/2021. Jury returns verdict as follows:
With respect to Question 1 Infringement; Claims 1, 12, 15, 17, 22, 27 as to '304 Patent
For TT; Claims 1, 7, 8, 25, 51 as to '132 Patent For TT: With respect to Question 2
Willful Infringement; Finding for IB: With respect to Question 3 Obviousness; Claims
1, 12, 15, 17, 22, 27 as to '304 Patent For TT; Claims 1, 7, 8, 25, 51 as to '132 Patent
For TT: With respect to Question 4 Damages; Finding for TT in the amount of
$6,610,985. Enter Judgment. Civil case terminated.
(Dkt. 2131). IBG now moves to correct or, in the alternative, amend the judgment to include the
Court’s holding that the ‘411 and ‘996 patents were invalid. Fed. R. Civ. P. 60(a); 59(e); (Dkt.
2136). 1 TT also moves to amend the judgment to include prejudgment and post-judgment interest.

1

IBG initially moved to correct or amend the judgment to include the disposition of all 10 of the patents TT originally
asserted against IBG. (Dkt. 2136). Subsequently, however, IBG narrowed its motion to only the ‘411 and ‘996 patents.
(Dkt. 2156 at fn. 1).

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Fed. R. Civ. P. 59; (Dkt. 2137). For the following reasons, IBG’s motion is denied and TT’s
motion is granted in part and denied in part.
LEGAL STANDARD
A motion filed under Rule 59(e) is one to alter or amend a judgment. Fed.R.Civ.P. 59(e).
“A motion to alter or amend a judgment under Rule 59(e) may be granted to correct a manifest
error of law or fact.” Duran v. Town of Cicero, 653 F.3d 632, 642 (7th Cir.2011), citing Harrington
v. City of Chicago, 433 F.3d 542, 546 (7th Cir.2006). Similarly, under Rule 60(a), the “court may
correct a clerical mistake or a mistake arising from oversight or omission whenever one is found
in a judgment, order, or other part of the record.” Fed. R. Civ. P. 60(a).
DISCUSSION
I.

IBG’s Motion to Correct or Amend the Judgment
IBG request the Court correct or amend the judgment to reflect its disposition of the ‘411

and ‘996 patents in its favor.

Judicial opinions granting partial summary judgment are

interlocutory orders that “merge[ ] into a subsequent final judgment.” Crown Packaging Tech.,
Inc. v. Rexam Beverage Can Co., 559 F.3d 1308, 1311 (Fed. Cir. 2009). For this reason, there is
no need to correct or amend the judgment in this case to reflect the Court’s prior summary
judgment rulings—those decisions are already part of the final judgment. IBG argues “the
principle of merger is inapposite because it relates to appellate jurisdiction over interlocutory
decision, not to motions to correct or amend a judgment.” (Dkt. 2156 at 1). While that is true, the
implication of the rule that interlocutory orders are generally only appealable after final judgment
is that such orders are considered part of the final judgment. See Wingerter v. Chester Quarry Co.,
185 F.3d 657, 662 (7th Cir. 1998) (Final judgment rule does not ‘“permit appeals, even from fully

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consummated decisions, where they are but steps towards final judgment in which they will
merge.’”) (quoting Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949)).
Abbot Labs v. Baxter Healthcare Corp., cited by IBG, is distinguishable. No. 04 C 836,
2010 WL 3894427, at *3 (N.D. Ill. Sept. 30, 2010). There, the defendant filed its motion for
summary judgment prior to filing a counterclaim seeking declaratory judgment that the patent-insuit is not infringed. Id. The court granted summary judgment in defendant’s favor on the issue of
infringement, but because a request for declaratory judgement was not included in defendant’s
summary judgment motion, the court did not grant summary judgment as to the declaratory
judgment claim. Id. Under such circumstances, which the court characterized as “a mistake arising
from oversight[,]” the court granted defendant’s motion to amend the judgment to include a
declaratory judgment that defendant did not infringe the patent at issue. Id. Here, there is no
mistake or oversight; all of the parties’ claims have been accounted for. The claims regarding the
‘411 and ‘996 patents were resolved in IBG’s favor at summary judgment and the claims regarding
the ‘132 and ‘304 patents were resolved in TT’s favor at trial. IBG’s motion is denied.
II.

TT’s Motion to Amend
TT requests the Court amend the judgment to include an award of prejudgment and post-

judgment interest. An award of prejudgment interest is the default rule in patent cases. See e.g.,
Gen. Motors Corp. v. Devex Corp., 461 U.S. 648, 655 (1983) (“In the typical case an award of
prejudgment interest is necessary to ensure that the patent owner is placed in as good a position as
he would have been in had the infringer entered into a reasonable royalty agreement.”); Crystal
Semiconductor Corp. v. TriTech Microelectronics Int'l, Inc., 246 F.3d 1336, 1361 (Fed. Cir. 2001)
(“[P]rejudgment interest [is] the rule, not the exception.”). The Court may, however, decline to
award or limit prejudgment interest in certain circumstances, including when the patentee unduly

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delays prosecution. Gen. Motors, 461 U.S. at 657; Crystal, 246 F.3d at 1361. Nonetheless,
“[a]bsent prejudice to the defendants, any delay by the patentee does not support the denial of
prejudgment interest.” Crystal, 246 F.3d at 1361–62 (internal quotations and citation omitted).
IBG argues TT unduly delayed prosecution when it waited to bring suit for nearly six years,
despite being aware of the infringing BookTrader product in March 2004. IBG presents evidence
that TT’s decision to delay suit was the result of a litigation decision to go after smaller, direct
competitors first before turning to larger brokers such as IBG. (Dkt. 2160 at 3–4) (quoting Trial
Transcript at 733, 4138). This decision sent conflicting messages to IBG regarding the infringing
nature of its BookTrader product. In 2004, TT published an Open Letter to the futures trading
industry informing the industry of its patents and intention to enforce them. (Dkt. 2160 at Ex. D).
At the time, IBG perceived the letter, which explicitly mentioned IBG as a competitor, as a threat
of suit, but when TT did not pursue litigation year after year, despite pursuing litigation against 18
other competitors in 2004 and 2005, (id. at Ex. C), IBG thought TT “was satisfied that we had a
moving price axis and we weren’t violating its patent.” (Dkt. 2167 Ex. C, Nemser Direct at 2756);
see also (Dkt. 2167 Ex. A, Petterfy Direct at 1929) (Q: So when you didn’t hear from TT for six
years, what did you think? A: I thought they had looked into our background, realized who we
were, and they didn’t want to prosecute this any long[er].”).
Apart from the accrual of prejudgment interest, however, IBG does not adequately
demonstrate how TT’s decision to delay suit caused it actual prejudice. See e.g., Lisle Corp. v. A.J.
Mfg. Co., No. 02 C 7024, 2004 WL 765872, at *1 (N.D. Ill. Apr. 7, 2004) (awarding prejudgment
interest although patentee waited six years to sue where defendant failed to demonstrate prejudice
independent of accrual of prejudgment interest). Accumulation of prejudgment interest will
always occur where there is any delay in prosecution by the patentee. Mere delay, absent

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prejudice, however, is insufficient to deny a prevailing patentee prejudgment interest. See e.g.,
Lummus Indus., Inc. v. D.M. & E. Corp., 862 F.2d 267, 275 (Fed. Cir. 1988); Crystal, 246 F.3d at
1361. IBG claims that had TT timely informed it of its infringement allegations, “IB could have
easily altered BookTrader to design around TT’s patents” by switching to an always-centered price
ladder like other competitors or by offering BookTrader as a standalone product. (Dkt. 2160 at 4–
5). This assertion, however, is undercut by the fact that IBG never altered BookTrader to switch
to either of these alleged alternatives even after being sued in 2010.
Crystal Semiconductor, cited by IBG, is distinguishable. 246 F.3d at 1361–62. There, the
Federal Circuit denied prejudgment interest where the patentee failed to notify the defendant of its
patents, despite having determined that defendants’ product infringed its patents. Id. Notably, the
patentee informed 30–40 other companies of its patents but did not notify defendants until bringing
suit two years later. Id.at 1362. Under these circumstances, the court held that the patentee’s twoyear “delay was self-serving and resulted in prejudice to the defendants.” Id. Unlike the patentee
in Crystal Semiconductor, TT did not attempt to hide its patents from IBG as part of some selfserving litigation tactic. The 2004 Open Letter explicitly mentioned IBG and IBG was aware of
the letter, as well as TT’s patents. See (Dkt. 2160 at Ex. D); (Dkt. 2167 at Ex. A, Ex. C). Moreover,
IBG was aware of and followed TT’s litigation against other competitors. (Dkt. 2167 Ex. C at
2752–56).
If prejudgment interest were not the default rule in patent cases, the Court might be more
swayed by IBG’s position, as there was no need, apart from a litigation decision to go after other
competitors first, for TT to delay suit against IBG. See for example, Milwaukee Elec. Tool Corp.
v. Snap-On Inc., 288 F. Supp. 3d 872, 907 (E.D. Wis. 2017) (limiting prejudgment interest where
patentee delayed suit merely due to a litigation decision to sue larger industry players first).

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Nonetheless, IBG has failed to demonstrate the sort of bad faith conduct or prejudice warranting
variance from this rule. For this reason, an award of prejudgment interest is justified in this case.
The parties also disagree as to the amount of prejudgment interest that should be awarded.
Their primary dispute concerns whether the jury’s damages award should be characterized as a
lump-sum payment, in which case, prejudgment interest applies to the entire amount over the 17year infringement period, or whether it reflects a running royalty, in which case, prejudgment
interest is applied to each reasonable royalty payment IBG would have paid TT based on its use
of TT’s product.
Both parties’ damages experts offered damages opinions based on the reasonable royalty
IBG and TT would hypothetically negotiate at the start of the infringement period and their
suggested award amounts were tied to actual use or access to the patented invention. (Trial
Transcript at 1822, 3273). Both experts relied on the same three comparable agreements, each
structured as running royalty arrangement, whereby the licensee would remit royalty payments to
TT on a monthly or quarterly basis based on their use of TT’s patented invention. (Id. at 1676–77,
3352); (Dkt. 2160 at Ex. H–J). Based on the damages testimony offered at trial, it is reasonable to
conclude that the jury’s award most likely reflects a running royalty amount rather than a lumpsum
payment. This conclusion is bolstered by the fact that the jury’s damages award exactly matches
one of the proposed damages amount offered by IBG’s damages expert, who opined that at a
reasonable royalty rate of 10 cents per user in the United States, based on the amount of IB
customers who actually used BookTrader, the damages amount would be $6,610,985. (Trial
Transcript at 3330, 3273).
Based on TT’s business practices with other licensees, it is reasonable to conclude that had
IBG and TT negotiated a licensing arrangement, IBG would have paid TT royalties on a quarterly

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basis 2 based on IBG customers’ use of TT’s product. (Dkt. 2160 at Ex. H–J, L). Critically, TT
would not have received the entire $6,610,985 damages amount in July 2004, because it would not
have known how much IBG’s customers would use its product over the course of the next 17 years.
The purpose of prejudgment interest awards is “to ensure that the patent owner is placed in as good
a position as he would have been in had the infringer entered into a reasonable royalty agreement.”
Gen. Motors, 461 U.S. at 655 (emphasis added). To treat the damages award as a lumpsum and
charge interest on it over the course of the infringement period would overcompensate TT by
awarding it interest on money it would not have yet received. Indeed, the difference in the
lumpsum interest award advocated by TT, $7,334,417, and the running royalty interest award
advocated by IBG, 2,099,171, is telling3. Awarding interest on royalty payments as TT would
have received them based on IBG’s use of its patented invention is the most accurate way to
compensate TT.
Next, while the parties agree that the prime rate should be used to calculate interest, they
disagree as to whether the average prime rate or a fluctuating, current prime rate should be used.
In this Circuit, “the best starting point is to award interest at the market rate, which means an
average of the prime rate for the years in question.” Cement Div., Nat'l Gypsum Co. v. City of
Milwaukee, 144 F.3d 1111, 1114 (7th Cir. 1998) (internal quotations and citation omitted)
(emphasis added). While a few courts have veered from this approach by using a fluctuating rate,
see e.g., Ryl-Kuchar v. Care Centers, Inc., 564 F. Supp. 2d 817, 829 (N.D. Ill. 2008) (awarding
prejudgment interest based “on the monthly prime rate set by the Federal Reserve during the
months for which” plaintiff sought interest), the Seventh Circuit has on at least one occasion

2

The transaction date IBG provided to the jury was based on quarterly amounts. (See Dkt. 2160 at Ex. E).
These numbers represent prejudgment interest calculated at the average prime rate, compounded monthly up until
the date of the Court’s original judgment.

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suggested that the average rate should be used over a fluctuating, current rate. First Nat. Bank of
Chicago v. Standard Bank & Tr., 172 F.3d 472, fn. 9 (7th Cir. 1999) (“[W]e held that the average
prime rate for the entire time period was the appropriate measure, rather than the current prime
rate.”). Thus, the Court will adhere to the standard approach of utilizing the average prime rate
and amend the final judgment to include an award of prejudgment interest on the jury award of
$6,610,985 at a rate of 4.413% beginning in July 2004 through the date of this Order, compounded
monthly, for a total of $2,122,355. 4
Finally, IBG does not contest the award of post-judgment interest in this case. Thus, the
final judgment is also amended to include an award of post-judgment interest on the jury award of
at a rate of 0.07% beginning on September 7, 2021, compounded annually. Post-judgment interest
on the pre-judgment interest is also awarded beginning on the date of this Order at a rate of 0.41%,
compounded annually.

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CONCLUSION
For the foregoing reasons, IBG’s motion to correct or, in the alternative, amend the
judgment is denied and TT’s motion to amend the judgment is granted in part and denied in part.

____________________________________
Virginia M. Kendall
United States District Judge
Date: January 11, 2022
The parties agree that the prejudgment interest owed through the date of the Court’s original judgment, September
7, 2021, using the average prime rate, compounded monthly is $$2,099,171. (Dkt. 2160 at fn. 13) (Dkt. 2167 at fn. 2).
A daily rate of $184 per day is then applied through the date of the amended judgment, January 11, 2022, to reach a
total amount of $2,122,355. (Dkt. 2160 at fn. 13).
5
The applicable post-judgment interest rate is “equal to the weekly average 1-year constant maturity Treasury yield
… for the calendar week preceding the date of the judgment.” 28 U.S.C. § 1961(b). For the week beginning January
3, 2022, the applicable average rate is 0.41%. See Federal Reserve Select Interest Rates,
https://www.federalreserve.gov/releases/h15/.
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