From Futures & Options Week, 1 November Industry moves to avoid TT patent suits Mike Topping, Laurence Davison Two firms last week launched trading software they claim will help customers avoid patent suits from litigious ISV Trading Technologies (TT). London-based ISV Patsystems and Chicago broker Peregrine Financial Group separately launched trading systems that represent depth of market on an active ladder display. Both firms said their products do not infringe TTâs patents on its static ladder based MD Trader. Active ladder displays were the norm prior to the introduction of MD Trader in 2000, with Patsystems among the firms to offer it. The moves come amid mounting concern over TTâs ongoing campaign of patent litigation, which has seen suits against two of its customers settled, with a suit against Espeed still being contested. Patsystems ceo Kevin Ashby said he believed the introduction of his firmâs Reflector product would âput our customers and others in the industry at easeâ. Patsystems has not been sued directly, but has been named in at least one of the other suits. Sources told FO Week that prior to this development some of Patsâ large customers had considered dropping the ISV as a possible way to avoid legal action from TT. End users were apparently approached by clearing firms and asked what impact there would be if Patsystems was withdrawn. Ashby told FO Week he was not aware of such discussions but acknowledged that many firms were considering the impact of the TT patents, which amounted to a âsword of Damoclesâ hanging over the industry. âIt has created a great deal of uncertainty and, in a situation where people donât know what is going to happen, they tend to do nothing, which is no good from a commercial perspective.â Reflector was unveiled to positive responses at last weekâs FIA Expo in Chicago. Nick Garrow, Patsystemsâ head of sales, told FO Week, âwe have probably done over 100 demos here and the feedback we have received has been very positive. We have seen some of the biggest US FCMs here, and many of them have not only said thank you for developing this work around, but are also pleased with what has been added.â Toshihiko Endo, head of system development at Patsystems customer Nihon Unicom told FO Week he was confident that using Patsystems wold not make his firm the object of TTâs legal attention. âI have seen a demo [of Reflector], and although I havenât been able to use it live yet, I like what they have done,â he added. PFGâs Best Direct Fast product was produced as a joint venture with ISV TradeMaven and uses a similar dynamic display to Reflector. PFG ceo Russ Wasendorf told FO Week, âWeâve not only read TTâs patents in detail ourselves, but weâve had them examined by patent attorneys. They have patented a static price ladder and combined that with some other claims; the technology we have does not use a static price array â this is dynamic. It moves as the market moves, and itâs not until you are prepared to implement your strategy⦠that the prices stop moving.â Both Patsystems and PFG have applied for patents on their new functionality, but said they did not plan to use their intellectual property as a revenue driver. âWeâre not interested in seeing someone else lose just so we can win â thatâs never been our approach,â Wasendorf said. Ashby said he was also no fan of the use of intellectual property as a revenue driver, but conceded that he could not rule it out as a future strategy. âI would prefer it if we continued to make money from the provision of products and services rather than through IP. But I have shareholders to think of, and if thatâs the way the industry is going to go, weâd have to look at it.â Although TradeMaven plans to generate revenue by selling the new product to independent clients, Wasendorf said that at present PFG has no plans to white label the system and sell it externally, instead focusing on the firmâs âsomewhere north of 40,000 customersâ as a target market. Patsystemsânew functionality has been incorporated into the JTrader product, and will be included in the Trademark platform, due for release next year. Ashby said the firm is not immediately withdrawing its static ladder display and that it was up to firms to decide whether to continue offering it to their customers.
TT , eSpeed , all these firms seeking patents and lawsuits are a bunch of f**ing crooks akin to mafia. I read this letter they sent to the exchanges threatening lawsuits if they don't pay a fee per trade. It's insane. You can't award patents for things like this , this is a sham and the whole patent office is a joke. I remember reading this TT founder interview in Active Trader, the guy was like: you just can't afford no to use TT, what a bunch of bullsh*tters . they charge an arm and a leg for exchange access and they still can't make money without lawsuits !! this business is full of crooks I think IB has integrity, the rest is 70% more or less crooked.
I use J-trade from Man Financial, the DOME feature is missing recently. Does it have something to do with the patent?
JTrader DOME has been replaced by something called Reflector, in a version upgrade. It's like DOME except that price ladder moves up & down to keep best bid/ask centralised. It's not easy to see (graphically) when price changes - I really hate it.
For those who are using Reflector in J-trader, how do you compare it with DOME? I think the static ladder is better. GHCO still offers DOME in J-trader.
Advantage Futures Reaches Agreement with Trading Technologies CHICAGO, June 23, 2005 -- Advantage Futures LLC (Advantage) and Trading Technologies International, Inc. (TT) today announced they have reached agreement ensuring there are no issues between the parties regarding TTâs MD Trader patents. As part of the agreement, Advantage has agreed to honor TTâs MD Trader patents. With respect to static ladder order entry technology, Advantage has agreed to only use software from TT or from firms that have a licensing agreement with TT. The agreement does not preclude Advantage from using or offering order entry software from other sources so long as it does not infringe on TT's patents. TT has agreed to absolve Advantage and its customers from liability for very limited past infringement. Advantage has cleared over 100 million client contracts thus far in 2005. Advantage is the number one firm in terms of electronic trading volume at the Chicago Board of Trade (CBOT) and the number one firm in interest rate volume at the Chicago Mercantile Exchange (CME). TT has become Advantageâs primary provider for electronic trading software based on strong customer demand. Approximately 99% of Advantageâs electronic trading volume has been executed through TTâs X_TRADER® platform. "Advantage has enjoyed a successful relationship with TT to date because of TTâs ability to offer innovative, fast and stable products that provide traders with a competitive edge. One example of TTâs innovation has been the MD Trader product, which has proven to be a great trading tool", said Joe Guinan, Advantageâs CEO. "Advantage respects TTâs MD Trader patents. Advantage believes the only responsible course of action is to acknowledge TTâs intellectual property rights as validated by the U.S., U.K. and European patent offices. By doing so, Advantage customers can focus on trading rather than concerning themselves with the risks of patent infringement", continued Guinan. "Advantage has been instrumental in the growth of electronic trading. TT has always respected Advantageâs integrity, which is exemplified by Advantage acknowledging the innovation behind MD Trader and its related patents. TT looks forward to continuing to grow its business with Advantage by focusing on the demands of professional traders and institutional clients", said Harris Brumfield, TTâs CEO.