Nasdaq patent review dropped, but court clash continues
Electronic stock exchange Nasdaq and a competitor have settled a dispute over a trading technology patent, prompting the US Patent and Trademark Office (USPTO) to dismiss a review of US patent number 7,599,875.
However, litigation between Nasdaq and rival Miami International (MIAX) is set to continue at the US District Court for the District of New Jersey, minus the ‘875 patent.
Yesterday, September 5, the USPTO granted the parties’ joint decision to terminate a covered business method (CBM) review of the ‘875 patent, called “Dual quote market system”. The patent is owned by Nasdaq.
MIAX had petitioned for a review of the patent back in March this year, six months after Nasdaq accused the stock exchange of trade secrets misappropriation and patent infringement.
In its court filing, Nasdaq claimed that MIAX had hired at least 15 ex-Nasdaq employees so that it could “avoid incurring or reduce the risk, time and expense of independently developing its own trading technology”.
MIAX allegedly used information “stolen” by the former Nasdaq employees to build two options exchanges, MIAX Options and MIAX Pearl, in 2012 and 2017.
Nasdaq also claimed that the ‘875 patent was infringed, along with patents 6,618,707; 7,246,093; 7,599,875; 7,747,506; 7,921,051; and 7,933,827, all of which concern trading technology.
Last month, Nasdaq and MIAX filed a joint motion to terminate the CBM, accompanied by an agreement not to sue each other.
The USPTO said: “The parties explain that they entered into a covenant-not-to-sue agreement, in which petitioner agreed to terminate this CBM proceeding in exchange for patent owner voluntarily dismissing with prejudice the ‘875 patent from the district court litigation.”
In July, the New Jersey court dismissed the ‘875 patent from litigation after the parties agreed to drop the lawsuit.
Since then, District Judge Brian Martinotti has denied MIAX’s motion to stay the case, which MIAX was seeking pending resolution of its seven petitions for CBM review.
Martinotti explained that there is a split in the district courts over whether a motion to stay is “premature” if it is filed in district court after the CBM petition has been filed with the USPTO, but before the petition has been instituted by the Patent Trial and Appeal Board (PTAB).
The judge concluded that the best course was to defer ruling on the motion until the PTAB has made its decision.
“Because the time for the PTAB to act on the petitions is approaching, denying the stay at this time and allowing defendants to re-file their motion to stay after the PTAB has acted will not lead to an undue burden on the parties,” concluded Martinotti.
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