IP Law Daily, PATENT—N.D. Ill.: Patents directed to high frequency trading system survive early Alice challenge, (Dec 5, 2025)

By Kevin M. Finson, J.D.

A high frequency trading company failed to show competitor’s patents claimed abstract ideas.

Patent claims relating to computers used in high frequency trading were not invalid for being directed to an abstract idea, at least at the pleading stage, the federal district court in Chicago has ruled. The asserted patents were not directed to an abstract idea, but rather to specific technological improvements, such as system architecture and methods to reduce latency. In addition, the claims included the inventive concept of adding components aimed at improving clock synchronization (HFT Solutions, LLC v. Citadel Securities LLC, No. 1:24-cv-13213 (N.D. Ill. Dec. 1, 2025)).

HFT Solutions, LLC (HFT) was the owner of U.S. Patents Nos. 10,931,286 (the ’286 patent), 11,128,305 (the ’305 patent), and 11,575,381 (the ’381 patent), all of which were directed to “field programmable gate array” (FPGA) systems used to improve data processing time in computer chips, specifically, by using a “phase locked loop” in place of the prior art’s “clock domain crossing” circuit. This improvement in data processing times was important in the field of high-frequency trading in the financial industry.

HFT brought suit for infringement against Citadel Securities, LLC, a company engaged in high frequency trading, alleging that Citadel had configured its own FPGA systems in a way which infringed all three patents. Citadel moved to dismiss on the ground that the patents were invalid for being directed at an abstract idea. After briefly finding that Citadel’s proposed representative claims fairly represented the issues at hand, the court applied the two-step Alice test.

Abstract idea. On the first step of the Alice test the court found that Citadel’s characterization of the claims as “manipulation of data” was reductive. The claims described a specific system architecture and methods used for addressing the technological problem of latency found in the prior art, so they were not directed to an abstract idea.

Inventive concept. Turning to the second step, the court further found that even if the claims were found to be directed at an abstract idea, they included multiple added components aimed at improving clock synchronization over the prior art systems which were not well-understood, routine, or conventional. This amounted to an inventive concept that would be sufficient to save the patentability of each claim even if they were directed to an abstract idea.

The court denied the motion to dismiss.

The Case is No. 1:24-cv-13213.

Judge: Coleman, S.

Attorneys: Brian D. Ledahl (Russ August & Kabat) for HFT Solutions, LLC. Sean W. Gallagher (Bartlit Beck LLP) for Citadel Securities LLC.

Companies: HFT Solutions, LLC; Citadel Securities LLC

Cases: Patent TechnologyInternet IllinoisNews