March 19, 2013 10:33 pm

Software claim dropped in Ikos legal battle

Elena Ambrosiadou, one of the hedge fund industry’s wealthiest women, has dropped claims against her estranged husband, Martin Coward, alleging a rival fund he runs uses proprietary software from the company they co-founded, Ikos.

The development is a significant victory for Mr Coward in the four-year legal battle between him and his wife that has culminated in recent weeks in an intellectual property case in the UK’s High Court.

The tussle between the pair and their companies – which has amounted to more than 40 separate legal actions across Europe and allegations of corporate and personal espionage – is one of the most high-profile disputes in the hedge fund industry. The centrepiece UK case currently being heard is based on a claim made by Mr Coward for property rights over Ikos’s trading codes.

Ikos relies on the codes to automatically trade in markets around the world for its clients – a strategy that has made hundreds of millions of pounds in profits since the hedge fund’s foundation two decades ago.

In an initial claim filed last year, Mr Coward alleged the codes were mainly developed by himself. Mr Coward is seeking ownership rights to the codes. Ikos denies Mr Coward has any rights to the code.

Ikos counterclaimed and alleged a new venture Mr Coward had established – a Monaco-based hedge fund manager named Dormouse – was using Ikos-owned code in its models and so had “infringed” its “copyright and database rights”.

The counterclaim, which sought an injunction to stop Dormouse using the code, was significantly amended shortly before the trial began this month, however, to drop the claims made against the Monaco fund. A spokesperson for Ms Ambrosiadou, who is Ikos’s chief executive, confirmed that the elements of her counterclaim against Dormouse had been dropped.

“Ikos dropped the action to focus on the continuing litigation to prove it is the ultimate owner of the software in a case that is ongoing,” he said.

The move paves the way for Mr Coward to concentrate on the new venture and return to the hedge fund industry. Fundraising for Dormouse has until now been hampered by the legal uncertainty surrounding ownership of its computer codes.

Mr Coward resigned as chairman and chief investment officer of Ikos in 2009. Details of what went on at the company that caused the rift between him and his wife have been kept private.

He is gagged by a court injunction that prevents him from discussing almost anything to do with Ikos or his divorce.

The injunction was applied for by Ms Ambrosiadou in Cyprus and was granted there, but it is enforceable in the UK.

A spokesperson for Mr Coward said he was unable to comment.

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