Miami International Holding Inc. et al. (MIAX) attained five victories within two weeks before the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office. In successive final written decisions issued in October, the PTAB declared that five Nasdaq patents related to electronic securities trading systems are invalid under 35 U.S.C. Section 101. Section 101 defines patent-eligible subject matter. The PTAB determined that all five Nasdaq patents (U.S. Patent Nos. 6,618,707; 7,246,093; 7,921,051; 7,747,506; and 8,386,371) were directed to abstract ideas, which are excluded from patent protection under the statute. MIAX awaits the PTAB’s decision on an additional patent (U.S. Patent No. 7,933,827) challenged by MIAX. One remaining related Nasdaq patent is still under review by the PTAB.
The PTAB’s proceedings were triggered by Nasdaq’s assertion of patent infringement claims against MIAX in the U.S. District Court for the District of New Jersey in September 2017. Nasdaq alleged that MIAX had violated the challenged Nasdaq patents and used Nasdaq trade secrets to launch MIAX’s competing options exchanges.
MIAX has vigorously disputed all of Nasdaq’s claims, and the NJ District Court has stayed all of the litigation pending final determination of the Nasdaq patents.
In an unrelated lawsuit, Nasdaq has sued yet another exchange, Investors Exchange (IEX), claiming that IEX infringes other Nasdaq patents related to electronic securities trading. That case was filed in March 2018 and is also pending in the U.S. District Court for the District of New Jersey. IEX is also challenging Nasdaq’s patents under Section 101. The five PTAB decisions in MIAX’s favor may help to pave the way for IEX as well as help sharpen the focus of what is and what is not patent-eligible in the FinTech industry for FinTech companies seeking patent protection or defending themselves against infringement allegations involving FinTech patents.