A jury in Chicago has decided that eSpeed Inc., eSpeed International LTD and Ecco Ware LTD violated Trading Technologies International Inc.’s (TT) patents for the static ladder and single-click order entry. The deliberations lasted just four days after a three and a half week trial, winning $3.5 million in damages.
TT brought the suit in August 2004, and many more soon followed, with at least nine companies settling, admitting infringement and licensing the technology from TT. Similar cases against Rosenthal Collins Group, CQG and GL Trade are still pending.
“People characterize this as TT against the world,” says Steven F. Borsand, vice president intellectual property for TT. “Most people have resolved with us; 95% have honored our patents. There are a few aberrations fighting us.”
Lawyers for eSpeed and the joint defense had tried to prove TT’s patents were invalid by presenting the jury with examples of previous screen-based trading systems.
“The effort to dig for prior art in this case has been serious. I mean, we have been all over the world. There have been over 100 depositions, 50 plus subpoenas, 60 different requests for documents; just a mammoth effort coordinated across all sorts of law firms representing all these people. And they still haven’t been able to find anything to challenge the patents,” Borsand says.
“What [TT is] primarily interested in is having its patents be declared valid and then being able to use those patents to control the entire market and force everyone to take licenses or use different products,” says Neal Cohen, attorney for Faegre & Benson LLP, who represents CQG. “So, from their perspective, this is a test case. But I don’t think their master strategy is simply to win judgment against eSpeed, but to win a judgment against all the competitors that are designing electronic trading software for the futures market,” he says, adding that he is 99.9% certain that the TT vs. eSpeed verdict will be appealed. “Nobody is really going to have an answer for a couple years,” he says, noting that eSpeed also has filed a charge of inequitable conduct against TT, alleging TT committed fraud or didn’t disclose required information in the pursuit of the patents. If eSpeed succeeds, it would render the patents unenforceable.
