OANDA Corporation is suing StoneX Group Inc (NASDAQ:SNEX) over alleged patent infringement. OANDA’s complaint, seen by FX News Group, was filed at the Illinois Northern District Court.

The patents at the core of this legal dispute are U.S. Patents Nos. 7,356,504 (the ʼ504 Patent), 7,702,548 (the ’548 Patent), and 7,742,959 (the ʼ959 Patent). OANDA is the owner of these three patents.

The ʼ504 Patent teaches, among other things:

A preferred embodiment comprises a method for determining value-at-risk based on tick-by-tick financial data. Major steps of the method comprise the following: (1) financial market transaction data is electronically received by a computer; (2) the received financial market transaction data is electronically; (3) a time series z is constructed that models the received financial market transaction data; (4) an exponential moving average operator is constructed; (5) an operator is constructed that is based on the exponential moving average operator; (6) a causal operator Ω[z] is constructed that is based on the iterated exponential moving average operator; (7) values of predictive factors are calculated; (8) the values calculated by the computer are stored in a computer readable medium, and (9) value-at-risk is calculated from the values stored in step (8).

The ’548 Patent teaches, among other things:

A preferred embodiment comprises a method for obtaining predictive information (e.g., volatility) for inhomogeneous financial time series. Major steps of the method comprise the following: (1) financial market transaction data is electronically received by a computer over an electronic network; (2) the received financial market transaction data is electronically stored in a computer-readable medium accessible to the computer; (3) a time series z is constructed that models the received financial market transaction data; (4) an exponential moving average operator is constructed; (5) an iterated exponential moving average operator is constructed that is based on the exponential moving average operator; (6) a linear, time-translation-invariant, causal operator Ω[z] is constructed that is based on the iterated exponential moving average operator; (7) values of one or more predictive factors relating to the time series z and defined in terms of the operator Ω[z] are calculated by the computer; and (8) the values calculated by the computer are stored in a computer readable medium.

OANDA notes that the claims of the ʼ548 Patent are not directed to an abstract idea or concept. Rather, they are directed to specific implementations of computerized trading systems and interfaces for trading currencies (that is, Forex).

The ’959 Patent teaches, among other things:

A method and apparatus for filtering high frequency time series data using a variety of techniques implemented on a computer. The techniques are directed to detecting and eliminating data errors such as the decimal error, monotonic series of quotes, long series of repeated quotes, scaling changes, and domain errors. Further, by means of comparison with nearby quotes in the time series, the techniques are also able to evaluate the credibility of the quotes.

OANDA claims that StoneX uses the StoneX Trader platform, including the APIs, to operate automated infringing trading systems. OANDA alleges that the defendant’s platforms and systems practice each and every limitation of at least claim 1 of the ʼ504 Patent, claim 1 of the ʼ548 Patent, and claim 1 of the ʼ959 Patent.

In addition, OANDA says that the StoneX Select service, and its offered analysis tools and services are an infringing products and services offered by StoneX.

In this action, OANDA seeks an award of damages pursuant to 35 U.S.C. § 284 sufficient to compensate Plaintiff for Defendant’s alleged past infringements, and any continuing or future infringement, up until the date that Plaintiff’s patent expires. OANDA also requests an injunction against continued infringement, including but not limited to an injunction against StoneX and/or its agents.

Let’s note that OANDA is also suing GAIN Capital for patent infringement. The patents at the hart of the lawsuit against GAIN Capital are U.S. Patent Nos. 7,146,336 (“the ’366 patent”) and 8,392,311 (“the ’311 patent”). Last year, GAIN Capital, operator of brands such as Forex.com, was acquired by StoneX.