Breaking: OANDA, GAIN Capital Clash Over Confidentiality in Patent Lawsuit

The patent infringement lawsuit brought by OANDA Corporation against online trading broker GAIN Capital, which is now owned by StoneX, continues at the New Jersey District Court.

The dispute now focuses on a proposed discovery confidentiality order (DCO), as the parties fail to agree on the discovery obligations in the lawsuit.

First, let‘s recall that, in this lawsuit, OANDA Corporation alleges patent infringement by GAIN Capital Holdings, Inc. and GAIN Capital Group, LLC (doing business as FOREX.com) of two patents: ’336 and 311.

• The ʼ336 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.

• 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.

On July 8, 2021, OANDA filed a letter with the Court, explaining that the two brokers fail to agree on a proposed Discovery Confidentiality Order (DCO).

The disagreement stems from Section 9 of the document, which governs the procedure when materials are requested that might impact the producing partys confidentiality obligations to a non-party.

A dispute exists with respect to Section 9(c) which states what should happen if the producing party, or non-party, believes there is a legal basis to withhold the requested information from the requesting party.

OANDA proposes a notice to be given to the non-party and then a 14-day period for either the producing party, or the non-party, to object and move for a protective order if either believes that the terms of the protective order are insufficient to protect the confidentiality of the information and that there is a valid legal reason to withhold the requested material in its entirety.

In contrast, GAINs proposes language that would allow parties to refuse to comply with discovery requests for non-privileged documents in their possession whenever the non-party “refuses to allow the party receiving the request to produce the information.”

Because OANDA has accused GAIN of contributory infringement via GAIN‘s “white-label” products, discovery of materials in GAIN’s possession subject to some type of third party confidentiality will likely be a factor in this case.

Additionally, GAIN has identified in its FRCP 26(a) disclosures employees of non-party StoneX as having relevant information pertaining to GAINs FX products.

GAIN has argued that it has confidentiality agreements with third parties that only permit disclosure when “required by law.” According to GAIN, this language requires a court order compelling production, and absent such an order, GAIN is exempt from complying with its ordinary discovery obligations.

GAIN has been trying to nix the lawsuit. In May, GAIN filed a counterclaim against OANDA.

According to GAIN, the claims of the patents are invalid under 35 U.S.C. § 101 because they are directed to an abstract idea without a sufficient inventive concept to transform the abstract idea into a patent-eligible application. In addition, and without limitation, the claims of the patent are invalid under 35 U.S.C. §§ 102 and/or 103 because they are anticipated or rendered obvious by relevant prior art, including but not limited to prior art of record during prosecution of the patents, and additional prior art that will be identified during discovery in this case.

Stay tuned for more broker & industry updates. Now you can search more than 28,000 forex brokers on WikiFX!