A federal judge in Illinois has backed up claims by Chicago-based Trading Technologies that a dealing system used by fixed income network eSpeed infringes on patents it holds.
In court Judge James Moran did not issue a preliminary injunction to stop eSpeed using the software because TT could not show evidence of irreparable harm "for now".
But Moran did say that he disagreed with eSpeed that TT's patent was invalid, adding that the patents were reviewed twice by the US Patent and Trademark Office (PTO), once through the usual procedures and then again through a special quality review.
TT filed a technology patent infringement lawsuit against eSpeed in August last year saying that a trading system used by the bond trading network infringed its patents.
The patents relate to TT's system for displaying multiple prices on a screen so that users can estimate the depth of a market. The system combines a static ladder price column with moving bid and ask data, together with a single order entry system.
In court Moran said: "When considering whether plaintiff (TT) has established that it is likely to suceed on its contention that defendent (eSpeed) infringes the patents. We conclude that it has."
Moran added that the ruling may cause eSpeed as well as others firms that TT claimd are in infringement "to reconsider their plans".
He also warned that if eSpeed takes on TT in the marketplace, the court "will have to reconsider its present belief that there has not been a sufficient showing of irreparable harm".
The ruling is a sign that TT could be successful in enforcing its patent more widely against other brokers and vendors.
TT, which claims to process in excess of 50% futures market share through its X-Trader platform, has already settled suits with two US brokerages. In an open letter to the futures industry, TT also asked for a fee of 2.5 cents per side on all trades conducted over the Big Four futures and options exchanges.
Last week a US court ruled that electronic trading technology used by Icap subsidiary BrokerTec did not infringe a patent held by eSpeed. The ruling was made after eSpeed admitted it couldn't prove that BrokerTec infringed its 580 patent which protects itw own dealing systems.