Nasdaq, a provider of trading, clearing, exchange technology, listing, information and public company services, has lodged a patent infringement lawsuit against IEX Group over the unauthorized use of its electronic trading technology.
The lawsuit has been filed at the United States District Court for the District of New Jersey to protect its intellectual property.
Nasdaq said seven patents violated by the IEX represent millions of dollars in investment and cover several industry-leading innovations.
The patents asserted in the lawsuit support the functioning of Nasdaq’s trading platforms associated to closing auction processes, multi-parallel order processing, matching engine performance, and data feed optimizations.
The lawsuit affirms IEX knowingly violated the series of Nasdaq patents in the development of its trading platform.
Nasdaq general counsel and chief regulatory officer Edward Knight said: “In addition to using our technology to power our markets, Nasdaq is a leading technology provider to other market operators across the world.
“These seven patents cover important innovations that we, and our customers, rely on for reliability, scalability, and transparency.”
The lawsuit described that IEX employed several former Nasdaq employees familiar with Nasdaq technologies who were involved in the development of IEX’s trading platform.
IEX included in public filings that its closing auction process was “designed based on extensive review of” Nasdaq’s patented process and that the information its system is designed to spread to the market during closing auctions is “substantially similar” to the “Nasdaq Net Imbalance Order Indicator,” one of the crucial features of patents asserted in the lawsuit.
Nasdaq, which is the creator of world's first electronic stock market, provides technology to more than 90 marketplaces in 50 countries.
In September 2017, Nasdaq agreed to acquire eVestment, a data analytics and service provider in a deal worth $705m.
eVestment is a data and analytics provider, whose services are used by asset managers, investment consultants and asset owners.
Image: Nasdaq has filed a patent infringement lawsuit to protect its intellectual property. Photo: courtesy of mapichai / FreeDigitalPhotos.net.