Reed Smith’s Christine M. Morgan, Lisa A. Chiarini, Eric Hutz, James C. Martin, Amardeep Grewal, and Sid Kapoor represented MIAX in the matter. “Today’s decision by the PTAB invalidating the ’051 patent is good news for all institutional investors,” said Chiarini. “Nasdaq has long been the Goliath in electronic securities trading, but as Nasdaq’s patents are chipped away, this sector will doubtless become more of a free market, with competition that can lower trading costs.”

The PTAB decision arises as a consequence of a patent infringement and trade secret case Nasdaq filed against MIAX in the United States District Court for the District of New Jersey in September 2017. The lawsuit alleges that MIAX used Nasdaq’s patented intellectual property to launch MIAX’s competing options exchanges. MIAX denies the allegations.

Reed Smith successfully argued in a hearing before the PTAB in July that all of the claims of the ’051 patent are invalid under the landmark 2014 U.S. Supreme Court decision Alice Corp v. CLS Bank. That case held that inventions directed to an abstract idea without any inventive concept are ineligible for a patent under Section 101 of the U.S. Patent Code.

“We are pleased with the Board’s well-reasoned opinion agreeing with MIAX that Nasdaq’s claims are ineligible for patenting because they are directed to an abstract information routing idea with no inventive concept,” Morgan said. Chiarini added that “the PTAB’s decision in MIAX’s favor provides the Fintech sector with additional clarity about the spectrum of what is patent eligible when attempting to patent aspects of electronic securities systems.”