Trading Technologies on Monday suffered the first legal setback in the US software group’s long-running effort to enforce patents on trading technology used by much of the global derivatives sector.

The Chicago-based group’s claim of patent infringement was partially rejected by a US district court in a move which would allow eSpeed, the electronic bond trading unit of Cantor Fitzgerald, to offer its software without the risk of its clients being exposed to legal action.

Trading Technologies has sued more than a dozen futures brokers, alleging that they used trading systems for their clients that infringed a patent the company secured in 2004. Most had already settled, and the company was expected to pursue alleged infringement against the large banks that dominate futures trading.

New York-based eSpeed maintained it was now free to offer its customised software to traders.

“The cloud is now lifted,” said Paul Saltzman, chief operating officer. “It was very difficult for us to gain traction with our customers.”

However, Trading Technologies rebuffed eSpeed’s assessment ahead of a trial set for early next year on the court’s memorandum opinion.

“The court did not rule on the issue of whether eSpeed or any other defendant is infringing the patents,” said the group in a statement. “TT remains very confident in its case and that the court will find that eSpeed’s products infringe.”

Mr Saltzman rejected the claim: “The court couldn’t have been clearer that the scope of TT’s patent related only to ‘static’ price display,” he said, noting the court’s interpretation of the market-pricing environment as dynamic.

• Separately, tent holding company NTP said on Monday it filed a patent infringement lawsuit against Palm, maker of the Treo mobile phone, in a US court, sending Palm shares down more than 7 per cent, Reuters reports.

The suit alleges that Palm’s products and services infringed NTP’s patents and seeks recovery of monetary damages resulting from Palm’s direct and indirect infringement, the intellectual property firm said in a statement.

NTP said it is targeting services and systems primarily used or adapted for use in e-mail systems with radio frequency communications to mobile processors and related services.

Get alerts on Americas when a new story is published

Copyright The Financial Times Limited 2021. All rights reserved.
Reuse this content (opens in new window) CommentsJump to comments section

Comments have not been enabled for this article.