UK futures broker Man Group has agreed to settle a patent infringement lawsuit brought by Chicago-based Trading Technologies (TT) - a move that could pave the way for further high-profile legal action against other major exchanges and investment banks.
TT filed a lawsuit again Man Group in April. The Chicago firm alleged that a program used by Man traders to buy and sell futures contracts infringed its patented MD Trader technology - an order-entry screen that displays multiple prices so that users can judge the depth of a market - which is part of its X_Trader order entry platform.
In a brief statement, TT says the lawsuit was resolved with the entry of a consent judgement finding infringement and validity. Man has agreed to not infringe TT's MD Trader patents in the future, while the vendor has absolved the company and its clients from any past liability for infringement.
The settlement also covers clients transferred to Man when the company bought Refco's futures business last month. TT had filed a separate patent infringement claim against the now bankrupt futures broker in March this year.
TT has already secured a number of settlements and loyalty agreements with ISVs and smaller broker-dealers including Patsystems, FFastFill, Advantage Futures, Kingstree Trading and Goldenberg Hehmeyer. But its latest victory over Man - which is now the largest futures broker - could lead to further legal action by the vendor against the investment banks that dominate global futures trading.
Last year TT asked the four biggest futures exchanges for a share of their revenues in return for protection from patent lawsuits. The vendor estimates that over 50% of electronic volume on the world's top four futures markets goes through its X_Trader system.
Earlier this year rumours surfaced that these claims had sparked the interest of the US Justice Department which is said to be investigating TT for possible monopoly abuse.
The vendor is still contesting a suit against bond trading network eSpeed and has filed other claims against ISVs GL Trade and Nyfix and futures dealer Peregrine Financial, among others.