Exchange sued by former employee over trading platform patent

Euronext-Liffe, the pan-European derivatives exchange, is facing a patent fight from a former employee over who owns the exchange’s trading platform.

Euronext-Liffe, the pan-European derivatives exchange, is facing a patent fight from a former employee over who owns the exchange’s trading platform.

The Financial Times reports that the former marketing employee claims he owns the patent rights over the exchange’s electronic trading platform.

The case is set to highlight the relatively low level of patents covering technology used in the City.

In the Liffe case, says the FT, a High Court judge has already ruled that the inventions Pavel Pinkava devised while working for Liffe between 2001 and 2005 were not made in the course of his "normal duties".

But the judge also decided that the inventions were made after Pinkava was specially asked to develop an exchange-tradable credit derivative.

"It was in solving this problem that Dr Pinkava made his inventions. They were, thus, made in the course of his specially assigned duties," said the judge.

The FT reports that the inventions covered the electronic trading of various financial instruments, including credit default swaps, credit interest swaps, interest rate swaps and overnight index swaps.

Pinkava is said to have believed the system he devised belonged to Liffe, but he later received advice that it belonged to him. He then applied for four patents in the US.

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