Lava Trading, a New York-based provider of direct access securities dealing software, has filed a lawsuit against the UK's royalblue Group for alleged patent infringement of its consolidated trading technology that allows for the aggregation of ECN books in a montage window.
The complaint, filed by Lava Trading on 18 June 2003 in US District Court in Delaware, asserts that royalblue infringed upon the patent entitled "Securities Trading System for Consolidation of Trading on Multiple ECNs and Electronic Exchanges".
The patented technology is used in Lava's Colorbook and Trading Floor products. The patent was filed in August 2001 and describes a product that provides connectivity with two or more ECNs, or other comparable ATSs, alone or in combination with one or more electronic exchanges.
Royalblue's flagship product Fidessa links to exchanges, ECNs and institutional clients.
Lava Trading filed a complaint in February 2003 against New York-based Sonic Trading Management for infringement of the same patent. Sonic has described the suit as 'frivolous' and without merit, while others in the industry have likened Lava's action to "patenting the wheel".
Richard Korhammer, CEO, Lava Trading, says he is convinced that the court will protect the firm's patented technology: "We had hoped to resolve this matter otherwise but have been left with no other choice than to enforce our patent rights in this appropriate manner. We have a responsibility to our shareholders and customers to protect our intellectual property."
Lava says it offers licensing opportunities for companies that want to develop products based on its technology.