The Patent World

Jim Kharouf

Jim Kharouf


We’re back in court today.

On Friday, Nasdaq filed suit against Miami International Holdings, the parent company of MIAX, the youngest of the U.S. options exchange groups. Nasdaq announced it had filed suit for patent infringement and theft of secret information by MIAX, which has hired a number of former Nasdaq and International Securities Exchange professionals.

According to Bloomberg, the Nasdaq suit claims that “MIAX instead relied on or piggybacked off of the Nasdaq trade secrets and other technical know-how acquired by former Nasdaq employees during their tenure at Nasdaq.” Nasdaq is asking the court to force MIAX to stop infringing and pay damages.

In an interview with MIAX executives, they vigorously deny they’ve copied or stolen anything from Nasdaq. The company has scrapped and clawed its way into the US equity options space with its technology platform. MIAX executives say they’ve done it by the book and have been careful to file their own patents for technology developed in-house.

MIAX hired 12 employees from Nasdaq/ISE out of the 110 it currently employs. The company also has a number of former PHLX employees. Such is the nature of the options industry.

It appears the crux of the case dates back to August 2010 to January 2011, when Nasdaq alleges that a senior technology person, who then worked for ISE, forwarded technical documents to his personal email. Interestingly, MIAX was founded in 2012, although Nasdaq says the information in question was allegedly used later on the MIAX technology.

Thomas P. Gallagher, chairman and CEO of MIH told JLN that the suit is a bullying tactic used by Nasdaq. And in MIAX’s official response, he stated, “We believe that NASDAQ’s complaint is nothing more than a feeble attempt to stifle innovation by a smaller company that has had tremendous success over the past five years.”

Gallagher also wonders why Nasdaq actually tried to recruit the same employees in recent years.

Right now, that is what is on the docket. It is impossible to tell at this stage who is right. So it’ll go to court.

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