Nasdaq takes on competitor in patent infringement case
New York-based Nasdaq Technologies is suing a competitor for patent infringement.
Nasdaq, the world’s first electronic stock market, alleged that its technology played a “central role” in helping US-based IEX create an electronic trading platform in a short time period.
IEX was founded in 2012 and began operating its electronic trading platform in 2013.
The complaint, filed yesterday at the US District Court for the District of New Jersey, claimed that in 2012 and 2013, at least four of Nasdaq’s key technology employees left the company for IEX. These employees are believed to have helped build the earliest version of IEX’s trading platform and continued to work on modifications.
The patents that Nasdaq alleges IEX has infringed are: “Closing in an electronic market” (US patent number 7,647,264); “Order book process and method” (7,895,112); “Multi-parallel architecture and a method of using the same” (7,933,827); “Order matching process and method” (8,244,622); “Closing in an electronic market” (8,280,797 and 8,386,362); and “System and method for optimising changes of data sets” (8,117,609).
The Nasdaq technologies that are protected by the patents include closing auction processes, multi-parallel order processing, matching engine performance, and data feed optimisations.
Edward Knight, Nasdaq general counsel and chief regulatory officer, said: “These seven patents cover important innovations that we, and our customers, rely on for reliability, scalability, and transparency.”
In its claim, the plaintiff alleged that IEX admitted in public filings that its closing auction process was “designed based on extensive review” of Nasdaq’s patents.
Nasdaq said that IEX has never obtained or sought to license any of the patents. Furthermore, it also alleged that the Nasdaq employees that helped to build IEX’s trading system would have been aware of the patents.
Nasdaq has requested a permanent injunction against IEX and enhanced damages due to the former Nasdaq employees’ alleged knowledge of the infringed patents.
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