Court Dismisses OANDA’s Patent Lawsuit Against Gain Capital

Canadian-based brokerage firm OANDA has had its patent infringement case against US-based Gain Capital dismissed by a New Jersey Court. The court gave OANDA a 60-day period to file an amendment complaint before finalizing its ruling.

Failure to respond within the stipulated time frame will see the court turn its “dismissal” into a permanent rejection.  Consequently, the presiding Judge said that Gain Capital’s request for a stay order has also been blocked.

Expounding on the decision, the Judge said that OANDA had not sought a preliminary injection.  The injection is a crucial counteracting consideration which helps to determine undue prejudice.

According to the judge, OANDA warned Gain Capital about the patent infringement, but questionably delayed in filing a formal complaint.  In court, the brokerage didn’t offer sufficient explanation as to why it waited 18 months, the judge said.

“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’s statement declared.

OANDA and Gain Capital Lock Horns over Patent Rights

The feud between the two online trading giants publicly started in July 2020, when Gain Capital first responded to OANDA’s lawsuit. The patents under contest are US. Patent No. 7,146,336 and 8,392,311, both of which allegedly belong to OANDA.

OANDA claims that Gain Capital has used and profited from its patent without the firm’s knowledge or permission.

“More specifically, Defendant GAIN Capital Group, LLC has made, used, sold, and offered for sale infringing instrumentalities.”

In response, Gain Capital moved to dismiss OANDA’s lawsuit, stating failure to state its claim or terms of compensation. Additionally, Gain Capital filed   CBM (covered business method) petitions against OANDA on September 14 and 15.

“The most likely outcome (80% likelihood) is that some or all of the asserted claims [in OANDA’s patents] will be found unpatentable.”

Court proceedings revealed that the US Patent and Trademark Office denied a request by Gain Capital to review both patents. However, the trial judge said that denial could be reversed and PTAB could institute the review for CBM.  The whole process could take one year or more before coming to a final decision from the tribunal.

“Competition between parties can weigh in favor of finding prejudice. Courts are hesitant to stay patent cases when it comes to direct market competitors.”

In other OANDA news, the brokerage firm recently announced the completion of its acquisition of TMS Brokers. This followed an earlier approval from the Polish Financial Supervision Authority.