The Financial Times reports that the New York Mercantile Exchange has drawn first blood in its legal dispute with eSpeed after a court admitted as evidence a 32-year old document that predates the broker's electronic trading patent.
The ruling means Nymex can now submit the 130-page document as evidence of 'prior art', reports the FT. The document was written by Richard Sandor in 1970, when he was a professor at the University of California, Berkeley. Unearthed in a Chicago basement last summer, it predates by 20 years the 'Wagner' patent, which eSpeed registered in 1990 and has since used to claim royalty payments from operators of electronic fiutures and options systems.
The Nymex dispute is the first true legal test of the validity of the eSpeed patent. The broker used the patent to extract $30 million in out-of-court settlements with the CME and CBOT, and reach a licensing agreement with the Intercontinental Exchange.