Thursday, 30 March 2017

IEX patents

An interesting wrinkle in NYSE's American IEX duplication will be the status of the IEX patent portfolio. IEX must decide whether or not to prosecute its patents. I am not a lawyer ... but there are risks to not prosecuting a known violation of your IP. A defensive M.A.D. strategy may or may not be a wise approach.

Some guy on the inter-webby tubes is probably not the guy to listen to for any reasonable view on the risks in such an important area, but let's put that thought aside for a moment.

I meandered through the IEX patent portfolio a while back here. I'll duplicate that patent list in the following table:
US20150073967A1Transmission latency leveling apparatuses, methods and systems [pdf]
US20150081508A1Techniques for facilitating electronic trading [pdf]
US20150261614A1Systems and Methods for Data Synchronization and Failover Management [pdf]
US20150261625A1: Techniques for message retransmission mechanism [pdf]
US20150302441A1Systems and methods for providing up-to-date information for transactions [pdf]
US20160055581A1Dynamic Peg Orders in an Electronic Trading System [pdf]
US20160078537A1System and method for facilitation cross orders [pdf]
US20160078538A1System and method for a semi-lit market [pdf]
And, further to those previously mentioned there are the following further actions, though not new patents:
KR20157009210A Transmission latency leveling apparatuses, methods and systems [pdf] Korean version of US20150073967A1
US9547565B2: Grant of US20150261625A1Techniques for message retransmission mechanism [pdf] Granted Jan 17, 2017. Also the same as a Canadian application CA2942355   
CA2942359A1 Systems and methods for data synchronization and failover management [pdf] Canadian version of US20150261614A1
The Canadian applications are understandable given the speed-bumps in Canada, but the Korean application was a bit of a surprise to me.

You really should check out the Techniques for facilitating electronic trading patent application just for the pictures:
Diagrams from page 1 of US20150081508A1Techniques for facilitating electronic trading [pdf]. Yes, there are more...
(click to enlarge)
Or, if you are not entertained,


you could read just the first claim:


No, that's not a joke.

Despite such flim-flam, there are some juicy bits in those patents. For example, the primary claim in the DPEG patent (US20160055581A1) is about quote instability. That is, there is no reliance on delays or speed-bumps for the primary claim to hold. It is not until the ninth claim that the idea of a non specific delay apparatus, which could be software, is introduced. NYSE's complete duplication of IEX's DPEG is an obvious thumbing of the nose in the general direction of this patent. Will IEX abandon their patent or prosecute? I do wonder if that first claim in DPEG is overly broad? If it is not, then that would be a pretty powerful claim for IEX to hold on to. Perhaps Alice will raise its ugly head? Time will reveal all.

The primary claim in "Techniques for message retransmission mechanism" is (worth skipping):
The above graphic is completely unrelated,
except in thought, to the surrounding text (source)
"1. An expedited message retransmission method for a computer system, comprising: maintaining, in a storage medium of the computer system, a master journal of sequenced messages generated from a plurality of messages written by applications or processes during operations of the computer system, at least one subset of said applications or processes requiring access to said sequenced messages to function properly; determining an estimated demand for access to said sequenced messages by said at least one subset of applications or processes that may experience failovers; generating, based on said estimated demand, one or more journal copies and/or one or more journal segments by duplicating content of said master journal, each said journal copy or journal segment being independently accessible by a single application or process at any given moment; and allocating said one or more journal copies and/or said one or more journal segments, upon demand, to some of said at least one subset of said applications or processes that have experienced failovers or a gap in said sequenced messages, such that multiple applications or processes can simultaneously access the content of said master journal, thereby expediting access to said sequenced messages in said master journal by said some applications or processes in their recovery from said failovers or said gap in said sequenced messages "
Really? That just screams, or perhaps just deadens the senses with soft, monotonic whispering, of prior art and a lack of innovation. That is the patent system we all know and trust ;-)

Happy trading,

--Matt.

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