Judge Brian R. Martinotti of the New Jersey District Court has partially dismissed a patent infringement complaint filed by OANDA against GAIN Capital.

In this lawsuit, OANDA alleges that GAIN infringes two patents, U.S. Patent Nos. 7,146,336 (“the ’366 patent”) and 8,392,311 (“the ’311 patent”).

On March 30, 2021, the Court partially axed OANDA’s complaint. In an opinion issued by Judge Brian R. Martinotti and seen by FX News Group, the Court finds that OANDA’s Complaint is partially deficient in identifying how GAIN’s product (that is, forex.com) allegedly infringes each claim of the patents.

GAIN argues OANDA’s screenshots cannot identify how or why each component of any accused product allegedly infringes the Patents-in-Suit, because

1. most of the claim elements of the Patents-in-Suit relate to backend functionalities, whereas the screenshots show only the frontend user interface for various webpages and applications, and

2. OANDA provides no explanation to give any context for the screenshot.

OANDA asserts it has provided claim charts with screenshots from www.forex.com to demonstrate how the website, the accused product, infringes. OANDA insists it should not be required to identify how GAIN’s non-public backend functionalities work. OANDA suggests the screenshots may give rise to a plausible inference that GAIN’s trading platform contains certain backend functionalities.

The Court finds OANDA’s Complaint is partially deficient, as some of the screenshots in the Complaint fail to clarify how each element of the claim corresponds to the component(s) in the screenshots. The Complaint does not cure this deficiency with supplementary explanations. Such a deficiency exists in the screenshots for a number of patent claims.

For instance, Claim 1(e) of the ’336 patent involves “a pricing engine” and “an interest rate manager”, but nothing in the adjoining three screenshots identifies which of them or which component(s) of them corresponds to such pricing engine or interest rate manager.

Accordingly, the Court finds OANDA’s direct infringement claim is viable, except for its allegation of GAIN’s infringement of Claims 1, 7, 9, and 10 of the ’336 patent.

Furthermore, the Court finds that OANDA’s induced infringement claim is not viable.

GAIN contends OANDA fails to plausibly plead an induced infringement claim, because the Complaint does not allege

1. direct infringement by a third party,

2. GAIN specifically intended others to infringe,

3. how GAIN induced infringement, and

4. GAIN possessed actual knowledge of its customers’ infringement.

GAIN says OANDA’s October 25, 2018 letter did not name a single product or accuse any GAIN product, platform, or service of infringement, and therefore cannot show GAIN knew of any infringement. OANDA counters it has alleged GAIN caused certain third parties (including subcontractors, managers, and agents) to operate or assist in the management of its infringing online trading system, and offered its system to certain third parties as a “white-label” product for creating their own infringing trading platform(s).

The Court disagrees with OANDA, as it has not pleaded facts raising a plausible inference of GAIN’s specific intent. Hence, OANDA’s induced infringement claim is not viable.

Also, OANDA’s contributory infringement claim was found as not viable.

The Court dismissed without prejudice OANDA’s Complaint as to Count I, to the extent it is based on GAIN’s alleged infringement of Claims 1, 7, 9, and 10 of the ’336 patent, and Count III. OANDA has 60 days to file an amended complaint, and failure to do so will turn dismissals without prejudice into dismissals with prejudice.