Reuters sues Bloomberg over alleged FX patent infringement
US trading technology firm Bloomberg could be forced to stop using parts of its foreign exchange matching and conversational dealing technology if its UK rival Reuters succeeds in a patent infringement lawsuit.
"The real aim is to protect our intellectual property," said the Reuters spokesperson. "Reuters has invested millions in research and development to deliver the best automated trading technology to the market. Although Reuters had preferred not to resort to litigation, it cannot allow the unauthorised use of its intellectual property."
Bloomberg last week hit back at Reuters’ claims: "We are confident that we have not violated the patent, and in our judgement the suit is without merit," said Bloomberg’s spokesperson in New York.
Allegations of patent infringement do not necessarily imply the defendant has copied business processes or software, said Nick Groombridge, a partner with the patent litigation group at Weil, Gotshal & Manges in New York. "It’s not limited to a copy like a copyright is. You could develop it on your own and not know about the patent."
Reuters said discussions have been ongoing since January to licence the processes covered by the patents to Bloomberg. But the UK company would not reveal how much it planned to charge for a licence, nor give the names of other companies that have licensed the technology.
If successful, said Groombridge, there would be an injunction against Bloomberg to prevent it from using the processes – or variants of the processes – covered by the patents. Damage payments would also be involved, which are calculated by assessing ‘lost profits’ – something that is difficult to determine in the field of services.
Patent owners succeed in at least half of cases that go to trial, said Groombridge. But it may take two or three years to get to trial, and the great majority of patent lawsuits result in an out-of-court settlement.
Some market participants see the move as Reuters’ reaction to Bloomberg’s increasing encroachment into foreign exchange – Reuters’ traditional stronghold. In the past 12 months, Bloomberg has launched an interbank forward swaps platform, Powermatch FX; Instant Bloomberg, a new instant messaging service; and, most threatening of all to Reuters, an alliance with its rival in spot interbank forex, EBS. From the third quarter, Bloomberg’s screens will offer EBS Trader, EBS’s conversational spot dealing platform.
"For the first time, Bloomberg is serious about the forex market," said one senior official at a foreign exchange trading technology firm in London. "Reuters may be panicking, but I don’t think it will have any impact in stopping Bloomberg. In fact, it may work the other way – it could bring them the publicity to make everyone aware that Bloomberg is serious about the forex space."
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Technology
Dismantling the zeal and the hype: the real GenAI use cases in risk management
Chartis explores the advantages and drawbacks of GenAI applications in risk management – firmly within the well-established and continuously evolving AI landscape
Chartis RiskTech100® 2024
The latest iteration of the Chartis RiskTech100®, a comprehensive independent study of the world’s major players in risk and compliance technology, is acknowledged as the go-to for clear, accurate analysis of the risk technology marketplace. With its…
T+1: complacency before the storm?
This paper, created by WatersTechnology in association with Gresham Technologies, outlines what the move to T+1 (next-day settlement) of broker/dealer-executed trades in the US and Canadian markets means for buy-side and sell-side firms
Empowering risk management with AI
This webinar explores how artificial intelligence (AI) can strip out the overheads and effort of rapidly modelling, monitoring and mitigating risk
Core-Payments for business leaders: why real-time access to payment data is key to long‑term business success
Business leaders require easy access to timely, reliable and complete information across post-trade processes. Aside from the usual requirements of senior managers to optimise for risk, revenues and costs, they increasingly need to demonstrate to their…
Risk applications and the cloud: driving better value and performance from key risk management architecture
Today's financial services organisations are increasingly looking to move their financial risk management applications to the cloud. But, according to a recent survey by Risk.net and SS&C Algorithmics, many risk professionals believe there is room for…
Machine learning models: the validation challenge
Machine learning models are seeing increasing demand across the capital markets spectrum. But how can firms improve their chances of gaining internal and regulatory approval for these type of models?