The Toronto Stock Exchange (TSX) says it has settled an intellectual property lawsuit it filed against the parent company of rival upstart bourse Pure Trading.
TSX filed suit against Canadian Trading and Quotation System (CNQ) with the Ontario Superior Court last July, accusing the rival outfit of illegally using its trading system specifications.
CNQ was accused of mis-using TSX's technical information in order to speed up the launch of Pure Trading in the Canadian market. It was also reported that TSX had accused Pure Trading of copying protocols and specifications for aspects such as data transmission in order to enable customers to connect to the Pure platform in the same way they link to the TSX's markets.
The documents were provided to CNQ subject to a 2002 confidentiality agreement, and shouldn't have been used in the Pure launch, claimed TSX.
Under the terms of the settlement agreement TSX says CNQ has acknowledged its ownership and intellectual property rights. The Toronto Exchange has agreed to grant licenses to Pure Trading for the continued use of the technology. No other terms of the settlement were revealed.
However the rivals have also agreed to cooperate in other areas related to market access and data delivery to "assist the Canadian securities industry in its efforts to adapt to the evolving multiple market system".
Pure Trading will provide its data feeds and supporting gateway access for TSX's Smart Order Routing and ATX initiatives. Meanwhile TSX will provide data feeds and open gateway access to Pure Trading, enabling the provision of order routing services for CNQ's participating dealers.
CNQ will also supply the Pure Trading real time data feeds, including full market depth for inclusion in TSX's Consolidated Data Feed product.
Commenting on the settlement Rik Parkhill, interim co-CEO, TSX Group, says: "We believe it is in the best interest of the industry to have access to all marketplaces' full depth of book, either directly or indirectly, to ensure best execution is obtained."
"We are very pleased with this outcome of this matter. It is critical that the Canadian capital markets be free of distraction as we collectively embark on the evolution to a more competitive multiple market system," adds Ian Bandeen, CEO, CNQ.