Chicago Bd. Options Exch., Inc. v. Int' Sec. Exch., L.L.C., No. 11-1267 (Fed. Cir. 2012)Annotate this Case
The patent, titled "Automated Exchange for Trading Derivative Securities," discloses an invention directed to an automated exchange for trading options contracts that allocates trades among market professionals and that assures liquidity. The patent distinguishes an automated exchange from the traditional, floor-based "open-outcry" system, under which trading takes place through oral communications between market professionals at a central location in open view of other market professionals. The patent purports that it can "provide an automated system for matching previously entered orders and quotations with incoming orders and quotations on an exchange for securities, which will improve liquidity and assure the fair handling of orders." The district court held that the patent is not infringed by the trading system of Chicago Board Options Exchange. The Federal Circuit reversed in part. The district court erred in construing "system memory means," "matching," and "automated exchange."