eSpeed settles patent dispute with CBOT and CME
eSpeed, a subsidiary of interdealer broker Cantor Fitzgerald and developer of electronic trading technology, has settled its lawsuit against the Chicago Mercantile Exchange (CME) and the Chicago Board of Trade (CBOT) over infringement on patented technology for electronic exchange trading. The CME and the CBOT each agreed to pay eSpeed $15 million in installments over the next five years.
At issue in the suit was whether the CME and the CBOT had infringed upon a patent purchased by eSpeed in April 2001 from Electronic Trading Systems for $3 million in stock and cash. The technology is involved in an electronic automated futures order matching system.
Electronic Trading Systems had already filed suit against the Chicago exchanges for infringement prior to the technology's sale to eSpeed. eSpeed assumed the role of plaintiff through the purchase.
Several other exchanges have been concerned with the technology at issue between the former litigants. In April, eSpeed reached an agreement with the IntercontinentalExchange, an online electronic market-place particularly strong in energy and metals contracts, to license the technology for $2 million per year and $0.20 per trade.
Meanwhile, a lawsuit between eSpeed and the New York Mercantile Exchange over the same technology is ongoing.
In a statement, eSpeed's chief executive and president Howard Lutnick said: "[We] believe this is just one illustration of the enormous unrealised value of eSpeed's extensive intellectual property portfolio."
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