Patsystems settles TT patent claim Published by finextra.com: 20/05/2005 10:15:00 Electronic screen dealing firm Patsystems has agreed to settle a patent infringement lawsuit brought by Chicago rival Trading Technologies. The suit was filed yesterday in the United States District Court by TT, alleging that Patsystems has infringed certain of TT's patents. In a brief statement, Patsystems says the lawsuit will be disposed of once the settlement has been approved by the Court. It goes on to say: "The directors believe that this agreement is in the best interests of Patsystems and they further believe that it will have no material financial impact on the company." Further details will be forthcoming once the claim is settled. Patsystems is the sixth firm to be accused of patent infringement by TT. The Chicago firm has claims outstanding against UK hedge fund manager Man Group, futures commission merchant Refco and bond trading network eSpeed. Chicago brokers Kingstree Trading and Goldenberg Hehmeyer both agreed an out-of-court settlement with TT within days of being sued by the vendor last year. In its financial results for 2004, Patsystems noted that uncertainty arising from the Trading Technologies patents issue was unsettling the market, resulting in the delay of at least two major prospective projects. Shares in the vendor moved up 3.7% or 0.5 pence to 14 pence on news of the settlement.
Patsystems to License Trading Technologiesâ Patented MD Trader⢠Technology CHICAGO, IL and London, May 23, 2005 â Trading Technologies International, Inc. (TT) and Patsystems today announced that they have agreed to settle a lawsuit pending in the United States District for the Northern District of Illinois in Chicago alleging that Patsystems infringed TTâs U.S. Patent Nos. 6,766,304 and 6,772,132. As part of the settlement, TT has licensed its patented MD Trader technology to Patsystems. The patent lawsuit was resolved today with the entry of a Consent Judgment finding infringement. Under the settlement agreement, Patsystems admitted that its DOME trading screen infringes on TTâs patents. Furthermore, TT granted Patsystems a license under which it will pay TT a variable royalty of at least $.10 per side for all contracts that trade through DOME with a minimum monthly royalty of $50 per screen that use DOME. As part of the settlement, TT has absolved Patsystems from any potential past liability that may have arisen under the granted patents by selling its DOME product. âWe believe that TTâs static ladder order entry patents are strong. To my knowledge, the first time that Patsystems saw the static ladder order entry concept was when TT released its MD Trader product. We believe that TT invented this concept. Reflector does not infringe TTâs MD Trader patents and TT has acknowledged this by entering into a binding agreement not to sue Patsystems, our customers or any of our third-party API users for using Reflector both now and in the future,â said Kevin Ashby, CEO of Patsystems. âOur discussions with Patsystems have been very productive. We hope this encourages other infringing entities to work with us towards settlement rather than litigation,â said Harris Brumfield, TT's CEO. âPatsystemsâ development of its Reflector product shows that patents in our industry do not stifle, but rather, encourage innovation,â continued Brumfield. TT has received patents from the US, UK and European Patent Offices relating to innovations in its MD Trader product, the market-depth-style order-entry screen incorporated in TTâs X_TRADER® trading software.
Under this agreement, probably, Pats will pay nill to TT as a recognition of the valuable MD patent. Indeed, the licensing agreement will be effective starting fron Aug 20 and Pats will dismiss it's DOME in favor of Reflector before Aug 19. As the with the other pre-arranged settlements reached with some of its best customer, this way TT hope to affirm the validity of its dubious MD patent. http://www.finextra.com/fullstory.asp?id=13709
Reflector ... www.elitetrader.com/vb/showthread.php?threadid=44736 www.elitetrader.com/vb/showthread.php?threadid=49402
An interesting agreement. PatSystems conceeds the patent but drops the product essentially. I wonder if it is possible that blind defense of the patent by TT causes the industry to migrate to other approaches leaving TT with substantially fewer customers. By charging $.50/side, they have effectively increased the incentive of broker/dealers to switch by that amount. Can't wait to see how this one develops. It's definitely a HBS case study in the making...
Just a quick correction: I'm pretty sure it's actually 10 cents a side not 50. $50 is the monthly minimum which may be where you got the number 50 from.