DCT

1:26-cv-05838

SpectraNet Tech LLC v. Imc Chicago LLC

Log In
Key Events
Complaint
complaint Intelligence

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:26-cv-05838, N.D. Ill., 05/20/2026
  • Venue Allegations: Venue is alleged based on Defendants IMC Trading and IMC Americas residing in the district, Defendant IMC Global Holdings having a regular and established place of business in Chicago, and Defendants Toggle and RCA operating antenna stations within the district.
  • Core Dispute: Plaintiff alleges that Defendants' high-frequency trading (HFT) enterprise, which utilizes a network of shortwave radio antennas for low-latency communications, infringes three patents related to optimizing wireless messaging.
  • Technical Context: The technology concerns methods for reducing end-to-end latency in long-distance radio frequency (RF) transmissions, particularly by using ionospheric propagation (shortwave) for time-critical applications like algorithmic financial trading.
  • Key Procedural History: The complaint does not mention any prior litigation, inter partes review (IPR) proceedings, or licensing history related to the patents-in-suit. The asserted patents are continuations of each other, originating from the same provisional application, and form a single patent family.

Case Timeline

Date Event
2012-07-24 Earliest Priority Date for all Patents-in-Suit
2020-01-01 Alleged shortwave HFT activity first observed
2021-03-23 U.S. Patent No. 10,959,123 ('’123' Patent) Issued
2022-11-29 U.S. Patent No. 11,516,694 ('’694' Patent) Issued
2025-09-09 U.S. Patent No. 12,414,002 ('’002' Patent) Issued
2026-05-20 Complaint Filed

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 10,959,123 - "Low Latency Wireless Messaging"

  • Issued: March 23, 2021

The Invention Explained

  • Problem Addressed: The patent identifies a need for low-latency communication systems, particularly in fields like HFT where microseconds can translate to significant financial differences (Compl. ¶30; ’123 Patent, col. 1:46-52). While radio waves travel faster through air than light through fiber optic cables, long-distance ionospheric (shortwave) radio transmissions suffer from their own latency issues, including processing delays related to message size and reliability challenges from atmospheric conditions (Compl. ¶¶31-34; ’123 Patent, background).
  • The Patented Solution: The invention proposes a method to reduce overall latency by tackling two distinct factors. First, it encodes a message (e.g., a trade order) into a compact, pre-defined format that is known in advance by the receiving device, which reduces the "message size latency" associated with processing and transmitting the data (Compl. ¶42; ’123 Patent, abstract). Second, it dynamically determines physical-layer transmission parameters—such as carrier frequency, modulation type, and power—based on both the overall "message latency" requirements and "predefined channel bandwidth" constraints to optimize the radio transmission itself (’123 Patent, col. 8:12-20). This dual optimization aims to leverage the propagation speed of radio while mitigating its inherent processing and bandwidth limitations.
  • Technical Importance: This approach provided a technical framework for making shortwave radio a viable, and potentially superior, alternative to fiber optics for trans-continental, low-latency data transmission critical to HFT (Compl. ¶¶30-33; ’123 Patent, abstract).

Key Claims at a Glance

  • The complaint asserts independent claim 1 and reserves the right to assert others (Compl. ¶65; Compl. ¶65, fn. 1).
  • Independent Claim 1 of the ’123 Patent recites:
    • A method for ionospheric RF transmission in a High Frequency (HF) band;
    • Receiving a request for a particular action to be performed;
    • Encoding a particular value using a format derived to effect message latency into an encoded message, where the value is known a priori by the remote receiver;
    • Determining transmission parameters for the encoded message based at least on (a) message latency and (b) a predefined channel bandwidth; and
    • Transmitting the encoded message according to the determined parameters.

U.S. Patent No. 11,516,694 - "Low Latency Wireless Messaging"

  • Issued: November 29, 2022

The Invention Explained

  • Problem Addressed: As a continuation of the ’123 Patent, the ’694 Patent addresses the same technical problem: minimizing total latency in long-distance wireless communications for time-sensitive applications by optimizing both data representation and RF transmission characteristics (’694 Patent, background).
  • The Patented Solution: The solution is substantively the same as in the ’123 Patent, involving data encoding and parameter determination. However, claim 1 of the ’694 Patent adds an explicit requirement that the "encoded message is smaller than the particular message" (’694 Patent, claim 1). This clarifies that the encoding step must result in data compression, a concept implied but not explicitly required in claim 1 of the parent ’123 Patent.
  • Technical Importance: The invention's importance remains the same: enabling competitive HFT over long-distance radio links by systematically reducing latency (’694 Patent, abstract).

Key Claims at a Glance

  • The complaint asserts independent claim 1 and reserves the right to assert others (Compl. ¶82).
  • Independent Claim 1 of the ’694 Patent recites:
    • A method for ionospheric RF transmission in a High Frequency (HF) band;
    • Receiving a request to transmit a particular message;
    • Encoding the particular message into an encoded message using a format derived to effect message latency, where the encoded message is known a priori by the receiver and is "smaller than the particular message";
    • Determining transmission parameters based at least on (a) message latency and (b) a predefined channel bandwidth; and
    • Transmitting the encoded message using the determined parameters.

U.S. Patent No. 12,414,002 - "Low Latency Wireless Messaging"

  • Issued: September 9, 2025

  • Patent Identification: U.S. Patent No. 12,414,002 ("’002 Patent"), "Low Latency Wireless Messaging," issued September 9, 2025 (Compl. ¶27).

  • Technology Synopsis: The ’002 Patent continues the family's focus on low-latency RF messaging. Its claims introduce a specific basis for parameter selection, requiring transmission parameters to be selected based on an "estimated propagation latency" and a predefined channel bandwidth (Compl. ¶39; Compl. ¶101). The patent also describes factors for estimating this propagation latency, such as time of day, solar cycle, and number of ionospheric bounces, and includes claims directed to receiver-side methods (Compl. ¶40; Compl. ¶41).

  • Asserted Claims: The complaint asserts independent claim 1 (Compl. ¶102).

  • Accused Features: The accused features are the Defendants' HFT methods, which allegedly transmit encoded messages using parameters selected based on latency estimates and predefined bandwidths to comply with FCC licenses (Compl. ¶¶103-114).

III. The Accused Instrumentality

  • Product Identification: The accused instrumentality is not a discrete product but a system and method: the Defendants' alleged global HFT enterprise, which employs a network of shortwave (HF band) antenna stations for low-latency communications (Compl. ¶¶44, 59).
  • Functionality and Market Context: The complaint alleges that Defendants, operating as the "IMC Group," use a network of antenna stations to gain a competitive advantage in the HFT market through "latency arbitrage" (Compl. ¶45). This involves executing trades based on information transmitted faster via shortwave radio than is possible with fiber optic networks (Compl. ¶49). The complaint identifies specific antenna stations allegedly operated by Defendants Toggle and RCA in locations such as Seattle, WA, and multiple sites in Illinois (Elburn, Joliet, West Chicago) (Compl. ¶¶53-56). An aerial photograph in the complaint shows an antenna in Elburn, Illinois, which is allegedly oriented to point towards Asia, a known HFT path from Chicago (Compl. ¶54; Compl. p. 14). The complaint alleges that to overcome the inherent low bandwidth of shortwave radio, Defendants "tightly encode their prices or other information in just a few bytes or bits" (Compl. ¶58).

IV. Analysis of Infringement Allegations

10,959,123 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
receiving a request for a particular action to be performed; A request to execute a trade (e.g., buy/sell) is allegedly received by the Defendants' system, for example near the Chicago Mercantile Exchange, prior to transmission over the HF network (Compl. ¶¶67-68). ¶68 col. 7:1-6
encoding a particular value using a format derived to effect message latency into an encoded message... wherein the particular value is known a priori to the remote receiving device...; To maintain a latency advantage, HFT traders allegedly "tightly encode" trading information into a few bytes or bits. This encoded value, representing the trade action, is allegedly known in advance by the remote receiver to enable trade execution (Compl. ¶¶58, 69-70). ¶69; ¶70 col. 5:11-24
determining transmission parameters for transmission of the encoded message... based at least on (a) message latency and on (b) a predefined channel bandwidth; and Defendants allegedly must select transmission parameters (e.g., modulation type, frequency) to meet or beat latency constraints while also complying with FCC licensing requirements that dictate a predefined channel bandwidth (Compl. ¶¶71, 73). A provided FCC license screenshot shows an emission designator "24K0G1D," which the complaint alleges defines a 24 kHz bandwidth for the transmission (Compl. ¶72; Compl. p. 19). ¶71; ¶72; ¶73 col. 8:12-20
transmitting the encoded message in the ionospheric HF frequency band according to the determined transmission parameters to the remote receiving device. Defendants allegedly transmit these encoded messages via their network of shortwave antenna stations to remote locations to execute trades (Compl. ¶74). ¶74 col. 6:55-65

11,516,694 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
receiving a request to transmit a particular message to the remote receiving device; To execute a trade, a request (e.g., buy/sell a security) is allegedly received by Defendants prior to transmission over the HF band to a remote device at a different location (Compl. ¶¶84-85). ¶85 col. 7:4-8
encoding the particular message... into an encoded message... wherein the encoded message is known a priori... and wherein the encoded message is smaller than the particular message; Defendants allegedly encode messages into a smaller format to overcome shortwave's limited bandwidth and effect latency. The complaint states the encoded message must be smaller, "otherwise it would diminish the latency advantage provided by the shortwave medium" (Compl. ¶¶86-88). ¶86; ¶88 col. 9:43-51
determining transmission parameters for transmission of the encoded message... based at least on (a) message latency and on (b) a predefined channel bandwidth; and Defendants allegedly must determine parameters to meet latency requirements while complying with FCC licenses that specify a predefined channel bandwidth (Compl. ¶¶89, 93). The complaint again references an FCC license with a "24K0G1D" emission designator, alleged to correspond to a 24 kHz bandwidth, as the predefined channel bandwidth (Compl. ¶¶90-92; Compl. p. 24). ¶89; ¶91; ¶93 col. 8:12-20
transmitting the encoded message over the frequency in the ionospheric HF frequency band using the determined transmission parameters. The encoded HFT messages are allegedly transmitted over the shortwave frequency band using the determined parameters (Compl. ¶94). ¶94 col. 6:55-65
  • Identified Points of Contention:
    • Scope Questions: A central question may be the scope of "determining transmission parameters." The complaint alleges that selecting parameters to comply with an FCC license (which defines bandwidth) while also trying to achieve low latency meets this limitation. A court may need to decide if this "determination" requires a dynamic, computational process where latency and bandwidth are explicit inputs—as the patent specification may suggest—or if selecting from a set of options to meet performance goals and regulatory limits is sufficient.
    • Technical Questions: What evidence does the complaint provide that the Defendants' system uses "message latency" as an input for determining parameters, as opposed to low latency being the desired output or goal of the system? The infringement theory relies on the inference that to be fast, the system must be optimized for latency, but it does not detail the specific mechanism by which this claimed "determination" occurs.

V. Key Claim Terms for Construction

  • The Term: "determining transmission parameters ... based at least on (a) message latency and on (b) a predefined channel bandwidth"
  • Context and Importance: This term is the technological core of the asserted claims, describing the active optimization of the RF signal. The outcome of the case may hinge on whether the Defendants' alleged practice of selecting frequencies and modulation schemes to achieve speed while adhering to FCC license constraints falls within the scope of this term.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: A party could argue that the plain language does not require a complex algorithm. The patent states a "controller... may determine transmission parameters" and lists various "determinators" (e.g., for frequency, modulation, power) that receive various inputs, which may support the view that any reasoned selection of parameters based on latency goals and bandwidth limits constitutes "determining" (Compl. ¶38; ’123 Patent, col. 7:50-56; ’123 Patent, Fig. 3).
    • Evidence for a Narrower Interpretation: A party could argue that "determining" implies a specific calculation. The specification provides a detailed formula for calculating a component of propagation delay (τ) and another for defining total message latency (T), suggesting that "message latency" is a quantifiable input to a computational process, not just a general goal (’123 Patent, col. 14:21-55). This may support a narrower construction requiring a specific algorithmic step that the complaint has not detailed.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges inducement by asserting that Defendants, acting as a joint enterprise, actively induce each other and related entities to infringe (Compl. ¶¶76-77; Compl. ¶¶96-97; Compl. ¶¶116-117). The factual basis for this is primarily the alleged common ownership, control, and concerted action of the various entities within the "IMC Group" (Compl. ¶24).
  • Willful Infringement: Willfulness allegations for all three patents are based on alleged post-suit knowledge. The complaint asserts that Defendants have been aware of the patents "at least since the filing of this lawsuit" and that their continued infringement is objectively reckless (Compl. ¶78; Compl. ¶98; Compl. ¶118).

VII. Analyst’s Conclusion: Key Questions for the Case

  1. A central issue will be one of claim construction and scope: Does the phrase "determining transmission parameters based at least on... message latency" require a dynamic, computational optimization where latency is a specific input variable, as potentially suggested by formulas in the patent's specification? Or, is the claim broad enough to read on the act of selecting operational parameters from a set of choices to achieve a low-latency outcome while complying with a pre-existing regulatory constraint like an FCC license?
  2. A key evidentiary question will follow: Assuming a construction is adopted, what proof can Plaintiff offer that Defendants' system actually performs the claimed "determination"? The complaint infers this optimization from the commercial necessity of speed in HFT and compliance with FCC licenses, but the case may turn on whether direct evidence of the accused system's internal logic and decision-making processes aligns with the claim language.
  3. A secondary question concerns joint liability: Can Plaintiff prove that the various named Defendants, including the antenna operators (RCA, Toggle) and the trading entities (IMC), operate as a single "joint enterprise" for infringement purposes, such that the actions and knowledge of one are legally attributable to all?
Loading Complaint