Citadel Securities LLC v. HFT Solutions LLC

Citadel Securities LLC, the Petitioner in this IPR, is a prominent global market-making firm providing liquidity and trade execution services to institutional and retail clients across various asset classes, including equities, options, and fixed income. The company is a significant player in high-frequency trading (HFT) and leverages advanced technology for its operations. HFT Solutions LLC, the Patent Owner, is a wholly-owned subsidiary of Network-1 Technologies, Inc., a company engaged in the acquisition, development, licensing, and protection of intellectual property. HFT Solutions LLC is often characterized as a non-practicing entity (NPE) or patent assertion entity (PAE), focusing on monetizing its patent portfolios through licensing and litigation.

The IPR challenges U.S. Patent No. 11,575,381, titled "Field programmable gate array with external phase-locked loop." This patent generally relates to field-programmable gate array (FPGA) systems designed to achieve minimal latency by using an external phase-locked loop to manage clock signals. The technology is critical for latency-sensitive applications like high-frequency trading, where even nanosecond advantages can be significant for trading success. While the specific accused product or service in this IPR is not explicitly detailed in the prompt, HFT Solutions LLC has broadly asserted that Citadel Securities' high-frequency trading platforms, which utilize FPGAs, infringe this patent and related patents in a parallel district court litigation.

This IPR (IPR2026-00151) is currently pending before the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office. The procedural posture indicates that Citadel Securities is challenging the validity of the patent, likely arguing that its claims are unpatentable over prior art. The IPR is linked to a parallel patent infringement lawsuit filed by HFT Solutions LLC against Citadel Securities LLC (and Jump Trading, LLC) in the U.S. District Court for the Northern District of Illinois, initiated in December 2024 (Case No. 1:24-cv-13213). The notability of this case stems from its involvement of prominent high-frequency trading firms and the assertion of patents central to the low-latency technology that underpins modern financial markets. Such disputes highlight the ongoing legal battles over intellectual property in the highly competitive and technologically advanced financial trading industry. A motion by Citadel to dismiss the parallel district court case based on patent-ineligible subject matter under 35 U.S.C. § 101 was denied in December 2025.

Patent Infringement Litigation: HFT Solutions LLC v. Citadel Securities LLC

This report outlines the key legal developments and current posture of the patent infringement litigation between HFT Solutions LLC and Citadel Securities LLC, encompassing both a district court case and a parallel Inter Partes Review (IPR) proceeding.

District Court Litigation: HFT Solutions, LLC v. Citadel Securities LLC (N.D. Ill., Case No. 1:2024cv13213)

Filing & Initial Pleadings:

• December 24, 2024: HFT Solutions, LLC initiated a patent infringement lawsuit against Citadel Securities LLC in the United States District Court for the Northern District of Illinois. HFT Solutions asserted infringement of three patents: U.S. Patent No. 10,931,286, U.S. Patent No. 11,128,305, and U.S. Patent No. 11,575,381. These patents relate to Field Programmable Gate Array (FPGA) technology for high-frequency trading.
• January 5, 2026: Citadel Securities filed its Answer to the Complaint for Patent Infringement. In its answer, Citadel Securities asserted defenses of non-infringement and patent invalidity. Concurrently, Citadel Securities filed counterclaims seeking a declaratory judgment that it has not infringed any of the asserted patents, and that all asserted claims of the patents are invalid and/or unenforceable.

Pre-trial Motions of Substance:

• April 7, 2025: Citadel Securities filed a motion to dismiss the complaint under 35 U.S.C. § 101, arguing that the asserted patents were directed to patent-ineligible subject matter.
• December 1, 2025: The District Court, presided over by Judge Sharon Johnson Coleman, denied Citadel's motion to dismiss. The court found that the asserted claims, which focus on FPGA architectures using a phase-locked loop to synchronize clock signals and reduce latency, plausibly recite a specific technological improvement and are not directed to an abstract idea under Section 101.

Claim Construction (Markman) Outcomes & Milestones:

• February 13, 2026: A status hearing was held where counsel confirmed agreement with the claim construction deadlines.
• March 25, 2026: Revised Final Infringement Contentions and Revised Final Invalidity Contentions were due.
• April 8, 2026: Exchange of Claim Terms and Proposed Constructions was due.
• May 6, 2026: Final Non-Infringement Contentions and Final Validity Contentions were due.
• May 13, 2026: The Opening Claim Construction Brief was due.
• Upcoming Deadlines:
  • June 17, 2026: Responsive Claim Construction Brief is due.
  • July 1, 2026: Reply Claim Construction Brief is due.
  • July 8, 2026: Joint Claim Construction Chart is due.
• June 16, 2026: An in-person status hearing is scheduled.

Current Posture:
The district court litigation is ongoing, with the parties actively engaged in the claim construction phase. There is no information about any trial events, verdicts, post-trial motions, settlement, or final judgment at this time. The case remains open.

Parallel PTAB IPR Proceeding: Citadel Securities LLC v. HFT Solutions LLC (IPR2026-00151)

Filing & Status:

• December 3, 2025: Citadel Securities LLC filed an Inter Partes Review (IPR) petition, IPR2026-00151, challenging U.S. Patent No. 11,575,381.
• Current Status: As of May 29, 2026, the IPR proceeding is listed as "Pending." There is no publicly available information regarding an institution decision by the Patent Trial and Appeal Board (PTAB) for IPR2026-00151. The PTAB has generally seen a downward trend in institution rates, with various discretionary factors, including parallel litigation and domestic industry considerations, potentially influencing decisions.

Effect on Litigation:
Given that the IPR is still in the "Pending" status and an institution decision has not been publicly released, there is no direct information on its effect on the district court litigation in the form of a motion to stay or other impact at this time. The district court continues to move forward with its schedule, including claim construction deadlines.

Counsel for Petitioner Citadel Securities LLC in IPR2026-00151

As of May 29, 2026, the specific external counsel of record representing Petitioner Citadel Securities LLC in IPR2026-00151 has not been explicitly identified in publicly available search results. While Citadel Securities LLC maintains a robust in-house legal team, including Brooke Cucinella (Global Head of Litigation & Regulatory Inquiries), Guy Miller (Senior Deputy General Counsel), and David Rusoff (Chief Legal Officer), these individuals oversee broader legal matters for the company rather than directly serving as counsel of record in specific IPR proceedings.

Pillsbury Winthrop Shaw Pittman LLP is known for its extensive intellectual property litigation practice, including experience with inter partes reviews (IPRs) before the Patent Trial and Appeal Board (PTAB). The firm also focuses on the financial services and technology industries, aligning with Citadel Securities' business. However, direct evidence specifically linking Pillsbury or any of its attorneys to IPR2026-00151 for Citadel Securities LLC could not be definitively confirmed from the available information.

Filings with the PTAB, such as the initial petition and any subsequent "Power of Attorney" documents, would typically name the attorneys of record. However, direct access to these specific documents for IPR2026-00151 was not available through the conducted web searches.

Therefore, while a firm like Pillsbury Winthrop Shaw Pittman LLP would be a strong candidate given their expertise and client base, the precise external counsel representing Citadel Securities LLC in this IPR remains unconfirmed based on the provided resources.

HFT Solutions LLC, the Patent Owner in IPR2026-00151, is represented by attorneys from Russ August & Kabat. This firm also represents HFT Solutions LLC in a related patent infringement lawsuit, HFT Solutions, LLC v. Citadel Securities LLC, Case No. 1:24-cv-13213, in the U.S. District Court for the Northern District of Illinois, which involves the same patent challenged in this IPR (US 11,575,381).

The counsel of record for HFT Solutions LLC includes:

• Marc A. Fenster - Lead Counsel
  • Firm: Russ August & Kabat, Los Angeles, CA.
  • Note: Mr. Fenster is a founding partner of Russ August & Kabat and is highly recognized for his work in intellectual property litigation, particularly in patent cases. He has extensive experience representing patent owners in complex disputes and has secured significant verdicts and settlements.
• Paul A. Kroeger - Counsel
  • Firm: Russ August & Kabat, Los Angeles, CA.
  • Note: Mr. Kroeger is a partner at Russ August & Kabat and focuses on intellectual property litigation, including patent, copyright, and trade secret matters. He has represented clients in various technology sectors.
• Brian D. Ledahl - Counsel
  • Firm: Russ August & Kabat, Los Angeles, CA.
  • Note: Mr. Ledahl is a partner at Russ August & Kabat with substantial experience in patent litigation across diverse technologies, representing both plaintiffs and defendants.
• Joshua Scheufler - Counsel
  • Firm: Russ August & Kabat, Los Angeles, CA.
  • Note: Mr. Scheufler is an attorney at Russ August & Kabat who practices in intellectual property litigation, including patent disputes.
• Dale Chang - Counsel
  • Firm: Russ August & Kabat LLP, Los Angeles, CA.
  • Note: Mr. Chang is an attorney at Russ August & Kabat with experience in complex patent litigation.

The information regarding counsel for HFT Solutions LLC is derived from the publicly available docket for the related district court case where they are listed as attorneys for HFT Solutions LLC. While a direct PTAB docket for IPR2026-00151 was not located within the immediate search results that explicitly listed counsel for the Patent Owner, it is standard practice for the same legal team to handle related IPR proceedings.