ICE Purchases Automated Trading Patents

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The threat of so-called patent 'trolls' has spurred this latest effort by ICE, according to a group spokesperson.

The IntercontinentalExchange Group (ICE) has announced the acquisition of several patents related to electronic trading strategies, in an implicit bid to protect clients from predatory patent buyers.

Most of the patents in the deal, the terms of which were not disclosed, handle pricing and order entry systems in electronic trading environments, particularly automated ones. The patents in question are 7,177,833; 7,251,629; 8,498,923; 8,478,687; 8,660,940; 8,732,048 and 8,725,621, along with various pending patents.

"We believe these intellectual property rights cover important aspects of transacting in today's markets," says David Goone, chief strategy officer at ICE. "ICE acquired these patents with the goal of preventing third parties from using these intellectual property rights against our customers. ICE intends to make these patents available broadly for license to customers that provide beneficial liquidity in ICE's and NYSE's markets."

The financial industry has become increasingly concerned with so-called patent trolls ─ firms that purchase patents and do not produce goods or services from them, but seek to sue organizations that use similar technology─ in recent years. A high-profile case between the Alice Corporation and CLS Bank recently ended in a victory for the foreign exchange settlement service, but had the potential to disrupt payment systems on a global basis.

Vulnerability
In that case, the US Supreme Court ruled that the idea of intermediated settlement could not be patented, but the result has not diminished fears that financial firms are particularly vulnerable to attempts to patent what most regard as widespread and practical applications of technology.

"The Supreme Court correctly rejected the attempt of Alice Corporation, a non-practicing entity or 'troll,' to foreclose productive companies like banks from practicing the ancient economic method of intermediated settlement," said Mark Perry, lead counsel for CLS Bank, at the time of the ruling. "As the Court explained, patent law does not allow someone to monopolize a fundamental abstract idea, and implementing the idea on any generic computer does not change this result. We are delighted with the result."

ICE acquired these patents with the goal of preventing third parties from using these intellectual property rights against our customers. - David Goone, ICE.

ICE is one of the largest exchange operators in the world, having grown substantially in recent years through its acquisition of NYSE Euronext. It is dual-headquartered in Atlanta, Georgia and New York City.

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