CBOE contends in court papers that ISE did nothing more than acquire a patent for a method that had already been used elsewhere.
“Automating such floor-based trading is far from new,” the Chicago exchange’s lawyers said in a pretrial brief filed last month. CBOE argued that the ISE patent claims lack innovation and should be declared invalid.
Lefkow declared the patent invalid in March 2011. A federal appeals court reversed that ruling in May.
While the process of selecting eight jurors began today, the judge told candidates for service they won’t begin hearing evidence until March 14. Lefkow will hear arguments on still-pending pretrial motions tomorrow and on March 13, according to her ruling.
C2 Options Exchange Inc., an all-electronic exchange owned by CBOE Holdings, in August sued ISE seeking a declaratory judgment that it too is not infringing the same patent at issue in the trial.
Chicago U.S. District Judge Matthew Kennelly in January denied ISE’s bid for dismissal of that complaint. It filed an answer on Jan. 28.
CBOE, in a separate lawsuit filed in Chicago last year, accused ISE of infringing patents related to quote-risk monitoring and quote-modification. That case, in which CBOE seeks at least $525 million in damages, has been transferred to federal court in New York.
An Illinois appeals court last year rejected ISE’s bid to overturn a court order barring it from providing a forum for trading S&P 500 index options. ISE had been sued by McGraw-Hill Cos., parent of Standard & Poor’s, and CBOE, which claims an exclusive license to offer S&P 500-based options.
ISE has asked the U.S. Supreme Court to review that ruling.
The cases are Chicago Board Options Exchange Inc. v. International Securities Exchange LLC, 07-cv-00623, and International Securities Exchange LLC v. Chicago Board Options Exchange Inc., 07-cv-04709, U.S. District Court, Northern District of Illinois (Chicago).