Court Dismisses OANDA’s Patent Infringement Case against Gain Capital

A patent infringement case brought by OANDA against Gain Capital has been dismissed by a New Jersey court today. The Canadian-based brokerage has 60 days to file an amended complaint, otherwise, the district court will turn its 'dismissal without prejudice' into a permanent rejection.

The judge hearing the case of patent infringement allegations has also blocked Gain Capital’s request for a stay order.

Explaining the rationale behind this decision, the judge said OANDA "has not sought a preliminary injunction," which is a "countervailing consideration" for finding undue prejudice. In addition, he states that the broker never explained why it did not commence this litigation at an earlier time, or why the company waited 18 months since the date it initially warned GAIN about its potential infringement.

“This is a prolonged delay for which OANDA offers no justification. Such unexplained inaction and delay cut against finding undue prejudice on OANDA's part,” the court paper says.

A US Patent and Trademark Office tribunal refused Gain Capital's request to review the two patents it has been accused of infringing. But, the trial judge said that this denial could be upturned and the PTAB could institute the CBM review, which may take an additional year or more before the tribunal makes a final decision.

"Competition between parties can weigh in favor of finding undue prejudice. Courts are hesitant to stay patent cases when direct market competitors are involved," the court further explained.

Background

OANDA filed the lawsuit in 2020 alleging that GAIN has infringed upon two patented technologies. As per the statement in its complaint, OANDA claims that: “Defendants have infringed one or more claims of the ʼ336 Patent by making, using, selling, offering for sale or selling products and/or services that meet each of the limitations of one or more claims of the ʼ336 Patent.”

In October 2020, Gain argued that there was plenty of evidence to refute the plaintiff’s claims to justify the denial of its request to suspend the case proceedings.

For its part, Gain Capital wanted the court to consider a covered business method (CBM) review which provides a means to challenge the validity of an issued patent.

A CBM review is not automatically kicked off, still, it has been a powerful tool for accused infringers wanting to challenge the validity of a patent. In addition, Gain Capital claimed that OANDA cannot dispute that the denial of institution of a CBM petition is a rare occurrence and that the PTAB only denied institution for 95 petitions since 2012.

But after Gain’s CBM petition was dismissed, OANDA asked the court to proceed with a federal case discovery as quickly as possible by countering Gain’s defense attempt to delay it.