The End of ECN Books in Level II???

Discussion in 'Trading Software' started by GHJ, Oct 12, 2002.

  1. GHJ


    Someone forwarded me this story (below) about Lava Trading. It appears that these idiots are threatening software companies who put ECN books in their level II window with patent infringement!

    This looks like a truly outrageous attempt to manipulate the patent system and extort royalties from vendors and traders. There has to be software firms out there that can claim precedence to this "invention." Trading software companys need to band together and file a patent challenge.

    Realtick, REDI+, Cyber, Tradecast, Greybox, et al. All of you guys have to stop this because I've seen Lava. It sucks! And I don't want to be forced to use it.

    If anyone wants to let Lava know how they feel about this BS, their email is:

    THE STORY...

    "Direct access vendor Lava Trading is threatening legal action against competitors over patent infringement. Lava notified direct access firms offering ECN aggregation that their systems violate a patent on its ColorBook front-end. ColorBook made a big splash last year as the first vendor-built trading system to aggregate and provide access to every quote on multiple ECNs. Now used by 11 of the top investment banks, according to Lava, it was patented in August 2001. In the wake of its success, several direct access firms have begun offering similar functionality.

    Lava has engaged a law firm to press its case. "They have a patent and we will be seeking to enforce their intellectual property rights," said Bob Hanlon of Coudert Brothers. Patent No. 6,278,982 describes ColorBook as a "securities trading consolidation system" that allows traders to "conduct security transactions with two or more ECNs, or other comparable ATSs." One competitor who received an accusatory letter from Lava likened the action to "patenting the wheel."

    by Traders Magazine
  2. they should do more research cuz other firms had books over 2 years ago!

    More wasted money in the legal system
  3. This makes me want to throw up. Lava Trading has a lot of balls to suggest they invented ECN books in a level II window. Cyber, Blackwood, and Realtick had this ages ago.

    Software with level II routing was available well before ECNs gained popularity. The order destination (be it an ECN or whatever) is irrelevant. It like saying that if new exchange is created, someone has the right to patent the ability to route to that new exchange from a level II window. There's no inventiveness in this whatsoever.
  4. pathetic, absolutly pathetic
  5. wow, that's ridiculous
  6. What a joke. How did they get that patent in the first place.
  7. GHJ


    My guess is that since software patent examiners are so extraordinarily overworked they sometimes overlook the "prior art." In this case I can't see how this patent wouldn't be overturned if challenged. The question is, are trading software companies going to band together and try to stop Lava or are they going to roll over and let Lava take their business.
  8. frezza


    What do the people at Townsend Analytics,, and other software companies think of this? Does anyone plan to fight it or are traders going to be stuck with Lava?
  9. It is definately crazy and I doubt that their attempt to enforce this will get far!
  10. GHJ


    Wow. Can't believe more people are not up in arms over this. This bogus Lava patent affects every single one of you. If Lava isn't stopped we may all have only one choice of level II software some day very soon.
    #10     Oct 15, 2002