Technology provider and agency-broker ITG has dropped a claim of ‘tortious interference’ as part of an ongoing complaint against Liquidnet, which alleges ITG has infringed one of its patents.
Liquidnet, which operates a buy-side-only crossing network in more than 30 markets globally, originally made an allegation of patent infringement against ITG in 2006, claiming its ‘834 Patent was being infringed through the ‘Channel ITG’ and the ‘Macgregor XIP’ products.
Channel ITG – now called ITG Channel – automatically sweeps buy-side blotters for uncommitted shares at intervals to check against ITG’s Posit and Match Now crossing networks. Macgregor XIP is an order management system designed to help buy-side firms execute investment decisions.
Originally filed in Delaware in 2006, Liquidnet dropped its original claim after being counter-sued by ITG in 2007, although Liquidnet then filed an answer, affirmative defence and counterclaim in 2007 in New York.
ITG filed an amended complaint in 2008 which alleged that Liquidnet committed fraud against the US Patent and Trademark Office by, among other things, failing to disclose that Liquidnet derived its patent from work done in 1997-1998 by third parties.
The amended complaint by ITG contained the additional cause of action against Liquidnet for ‘tortious interference’ with prospective business relations that has now been dropped.
In a statement, ITG said “ITG continues to believe that Liquidnet’s patent infringement lawsuit is wholly without merit, and we will continue to vigorously defend ourselves in that matter. We do not believe that ITG has in any way infringed Liquidnet’s ‘834 patent, and furthermore, we believe the patent is invalid. ITG voluntarily dismissed its counterclaim for tortious interference, a small element of the larger lawsuit, in order to simplify the issues in the case. In our view, this move does not change the overall picture of the patent infringement lawsuit.”
Liquidnet issued a statement asserting, “This dismissal with prejudice means that ITG’s claim cannot be asserted against Liquidnet in the future. Liquidnet continues to pursue its patent infringement claims against both ITG and Pulse Trading.”
Liquidnet CEO Seth Merrin added, “Since its initial filing, we have maintained that the counterclaim was without merit and we are pleased that it has been dismissed.”
Liquidnet has also been awarded its second patent related to its equity trading system. US Patent No. 7,747,515 entitled ‘Electronic Securities Marketplace Having Integration With Order Management System’ is intended to protect Liquidnet’s proprietary computer-based methods for generating liquidity for block trades.