Case 1:11-cv-10824 Document 1 Filed 05/10/11 Page 1 of 6

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

)
BOSTON OPTIONS EXCHANGE GROUP, LLC, )
)
Plaintiff, )
v. )
)
CIVIL ACTION
INTERNATIONAL SECURITIES EXCHANGE, )
NO. 11-10824
LLC, CHICAGO BOARD OPTIONS EXCHANGE, )
INC., and NASDAQ OMX PHLX, INC., )
)
Defendants. )
)
)

COMPLAINT AND JURY DEMAND

Plaintiff Boston Options Exchange Group, LLC (“BOX”), for its Complaint for patent

infringement against defendants International Securities Exchange, LLC (“ISE”), Chicago Board

Options Exchange, Inc. (“CBOE”), and NASDAQ OMX PHLX, Inc. (“PHLX”) (collectively,

the “Defendants”), alleges as follows:

THE PARTIES

1. Plaintiff Boston Options Exchange Group, LLC is a limited liability company

organized and existing under the laws of the State of Delaware with its principal place of

business located in Boston, Massachusetts.

2. Upon information and belief, defendant International Securities Exchange, LLC is

a limited liability company organized and existing under the laws of the State of Delaware with

its principal place of business located in New York, New York.

3. Upon information and belief, defendant Chicago Board Options Exchange, Inc. is

a corporation organized and existing under the laws of the State of Delaware with its principal

place of business located in Chicago, Illinois.

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4. Upon information and belief, defendant NASDAQ OMX PHLX, Inc. is a

corporation organized and existing under the laws of the State of Delaware with its principal

place of business located in Philadelphia, Pennsylvania.

JURISDICTION AND VENUE

5. This action arises under the patent laws of the United States, 35 U.S.C. § 1 et seq.

This Court has jurisdiction over the subject matter of the claims asserted in this action under 28

U.S.C. §§ 1331 and 1338(a).

6. Venue is proper in this District pursuant to 28 U.S.C. §§ 1391 and 1400.

FACTUAL BACKGROUND

7. BOX is an all-electronic equity options market. BOX was established in 2002

and launched trading in February 2004 as an alternative to the then-existing market models.

Since inception, BOX has provided its members with an efficient, transparent marketplace,

cutting edge technology, and best price filtering for customer order execution.

8. BOX is the owner by assignment of United States Patent No. 7,941,364 (“the ‘364

patent”), which was duly and legally issued by the United States Patent and Trademark Office on

May 10, 2011, for an invention titled “Price Improvement Processor for Electronic Trading of

Financial Instruments.” A true and correct copy of the ‘364 patent is attached hereto as Exhibit

A.

9. The ‘364 patent grants BOX the exclusive right to make, use, offer for sale,

and/or sell the devices and methods claimed therein.

10. Upon information and belief, ISE operates a national securities exchange. ISE

offers options trading on, inter alia, equity, ETF, and index products.

11. Upon information and belief, CBOE operates a national securities exchange.

CBOE offers options trading on, inter alia, equity, ETF, and index products.

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12. Upon information and belief, PHLX operates a national securities exchange.

PHLX offers options trading on, inter alia, equity, ETF, and index products.

13. Upon information and belief, ISE regularly transacts business in the

Commonwealth of Massachusetts and in this judicial district by, among other things, using and

offering a secondary auction process for its members, giving said members an opportunity for

price improvement, wherein said process meets the limitations set forth in the claims of the ‘364

patent.

14. Upon information and belief, CBOE regularly transacts business in the

Commonwealth of Massachusetts and in this judicial district by, among other things, using and

offering a secondary auction process for its members, giving said members an opportunity for

price improvement, wherein said process meets the limitations set forth in the claims of the ‘364

patent.

15. Upon information and belief, PHLX regularly transacts business in the

Commonwealth of Massachusetts and in this judicial district by, among other things, using and

offering a secondary auction process for its members, giving said members an opportunity for

price improvement, wherein said process meets the limitations set forth in the claims of the ‘364

patent.

16. Upon information and belief, ISE’s infringement of the ‘364 patent has been

knowingly and willfully committed.

COUNT ONE - INFRINGEMENT OF THE ‘364 PATENT

17. BOX hereby re-alleges the allegations contained in paragraphs 1 through 16 of the

Complaint as though fully set forth herein.

18. The ‘364 patent was validly issued by the Patent Office and is valid and

enforceable.

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19. Upon information and belief, ISE manufactures, imports, uses, sells, and/or offers

for sale products or services throughout the United States that infringe one or more claims of the

‘364 patent literally or under the doctrine of equivalents, including with respect to its price

improvement secondary auction process called the “Price Improvement Mechanism” (a/k/a

“PIM”). By its acts, ISE is also inducing others to infringe the ‘364 patent and contributing to

the infringement by others of the ‘364 patent.

20. Upon information and belief, CBOE manufactures, imports, uses, sells, and/or

offers for sale products or services throughout the United States that infringe one or more claims

of the ‘364 patent literally or under the doctrine of equivalents, including with respect to its price

improvement secondary auction process called the “Automated Improvement Mechanism” (a/k/a

“AIM”). By its acts, CBOE is also inducing others to infringe the ‘364 patent and contributing

to the infringement by others of the ‘364 patent

21. Upon information and belief, PHLX manufactures, imports, uses, sells, and/or

offers for sale products or services throughout the United States that infringe one or more claims

of the ‘364 patent literally or under the doctrine of equivalents, including with respect to its price

improvement secondary auction process called the “PIXL.” By its acts, PHLX is also inducing

others to infringe the ‘364 patent and contributing to the infringement by others of the ‘364

patent

22. BOX has been irreparably harmed and monetarily damaged by ISE’s infringement

of the ‘364 patent. If ISE’s infringement is not permanently enjoined, BOX will continue to be

irreparably harmed and monetarily damaged.

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23. BOX has been irreparably harmed and monetarily damaged by CBOE’s

infringement of the ‘364 patent. If CBOE’s infringement is not permanently enjoined, BOX will

continue to be irreparably harmed and monetarily damaged.

24. BOX has been irreparably harmed and monetarily damaged by PHLX’s

infringement of the ‘364 patent. If PHLX’s infringement is not permanently enjoined, BOX will

continue to be irreparably harmed and monetarily damaged.

25. Upon information and belief, ISE has been and is aware of the ‘364 patent. ISE’s

infringement has been and continues to be in total disregard of BOX’s exclusive rights under the

‘364 patent.

26. Upon information and belief, this is an exceptional case against ISE warranting an

award of treble damages to BOX under 35 U.S.C. § 284 and an award of its reasonable attorneys'

fees and costs for the maintenance of this action under 35 U.S.C. § 285.

27. Upon information and belief, this is an exceptional case against CBOE warranting

an award of treble damages to BOX under 35 U.S.C. § 284 and an award of its reasonable

attorneys' fees and costs for the maintenance of this action under 35 U.S.C. § 285.

28. Upon information and belief, this is an exceptional case against PHLX warranting

an award of treble damages to BOX under 35 U.S.C. § 284 and an award of its reasonable

attorneys' fees and costs for the maintenance of this action under 35 U.S.C. § 285.

PRAYER FOR RELIEF

WHEREFORE, BOX prays that this Court enter judgment as follows:

A. Judgment that Defendants and those in privity therewith have infringed U.S.

Patent No. 7,941,364;

B. Judgment that Defendants’ infringement of U.S. Patent No. 7,941,364 was

willful;

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C. Award BOX compensatory damages and prejudgment interest thereof for

Defendants’ acts of infringement of U.S. Patent No. 7,941,364;

D. Award treble damages for willful infringement of U.S. Patent No. 7,941,364;

E. Permanently enjoin Defendants from further infringement of U.S. Patent No.

7,941,364;

F. Judgment that this is an exceptional case under 35 U.S.C. § 285 warranting an

award of BOX’s attorneys’ fees; and

G. Award BOX its costs, expenses and such other relief as are deemed just and

equitable.

JURY DEMAND

BOX demands a trial by jury on all matters and issues triable by a jury.

Dated: May 10, 2011 Respectfully submitted,

BOSTON OPTIONS EXCHANGE
GROUP, LLC,

By its attorney,

/s/ Joshua M. Dalton

Joshua M. Dalton, BBO #636402
joshua.dalton@bingham.com
Lawrence T. Stanley, Jr., BBO #657381
lawrence.stanley@bingham.com
BINGHAM MCCUTCHEN LLP
One Federal Street
Boston, MA 02110-1726
617.951.8000

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