Chicago-based Trading Technologies (TT) has suffered a legal set back in its battle to protect the patents it holds on its electronic trading technology, MD Trader.
In a statement Cantor Fitzgerald subsidiary eSpeed says a US District Court has "squarely rejected" TT's attempt to constrict its futures product offerings by claiming patent infringement.
"It has been eSpeed's consistent view that its futures products were not covered by those patents, and in an October 31 claims construction decision, the US District Court for the Northern District of Illinois supported eSpeed's position," says the statement.
As a result eSpeed says it can now offer its futures trading software without the risk of its clients being exposed to legal action from TT.
Paul Saltzman, COO of eSpeed, adds: "The court's interpretation of the scope of Trading Technologies' patent claims in our favour has removed the uncertainty regarding our products."
Espeed says the decision is "a clear victory for the marketplace".
"ESpeed and ECCO are now better positioned to offer our customers a broader range of user interfaces to facilitate fast and easy futures execution capabilities," says Saltzman.
But TT was quick to follow up eSpeed's statement with its own which claims that eSpeed is "incorrect": "The court did not rule on the issue of whether eSpeed or any other defendant is infringing the patents," says the statement. "TT remains very confident in its case and that the Court will find that eSpeed's products infringe."
But Saltzman rejected TT's claim and told reporters that the court stated that that the scope of TT's patent related only to "static price display", adding that the court's interpretation of the market-pricing environment was "dynamic".
TT has sued around sixteen futures brokers over the last two years over 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.
The vendor has secured settlements and loyalty agreements with ISVs and broker-dealers including Nyfix, Patsystems, FFastFill, Advantage Futures, Kingstree Trading and Goldenberg Hehmeyer. Last year TT also secured a consent judgement from UK futures broker Man Group.
In March this year, TT secured its first settlement pay-out when Chicago-based TradeMaven agreed to pay $250,000 to settle a patent infringement lawsuit. TradeMaven admitted that two versions of its Trade Window product and a system made for futures dealer Peregrine Financial infringed the patents TT holds for MD Trader.
The TradeMaven payment was based on past futures volume of approximately 1,050,000 sides traded using the infringing trading screens since the patents were granted to TT in 2004.
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.