Cantor subsidiary files patent infringement suit

Interdealer-broker Cantor Fitzgerald’s trading technology subsidiary eSpeed has filed a patent infringement suit against electronic fixed-income trading platform BrokerTec, while separately a court case pertaining to alleged constructive dismissal brought against Cantor in London is now entering its final stages.

Filed in the US district court for the district of Delaware, the suit explicitly names BrokerTec USA, BrokerTec Global, parent company Icap and Swedish financial transactions technology vendor OM.

eSpeed said it is seeking an order from the court directing BrokerTec to cease operations of its competing electronic trading system, which it claims infringes eSpeed's patented systems and methods.

Last year, eSpeed settled its lawsuit against the Chicago Mercantile Exchange (CME) and the Chicago Board of Trade (CBOT) over infringement on patented technology for electronic exchange trading. The CME and the CBOT each agreed to pay eSpeed $15 million in instalments over a period of five years.Meanwhile, in London’s High Court, closing arguments are being heard in a case between Steven Horkulak and his former employer Cantor Fitzgerald.

Horkulak - who left Cantor in June 2000, and is now head of euro interest rate swaps at brokerage Tullet – is claiming £1.5 million in compensation for alleged constructive dismissal.

The accusations of bullying made in this case echo claims made during a court case between Cantor and Icap heard in London last summer. Cantor Fitzgerald then claimed that rival broker Icap’s hiring away of several senior brokers in the aftermath of the September 11 attacks amounted to an inducement of a breach of contract. However, at the end of the 15-day trial, Justice McCombe decided that two of the brokers – Edward Bird and Spencer Gill – had actually been constructively dismissed by Cantor, due to some of the actions of the firm’s management. In his judgement, McCombe referred to the “aggressive and bullying fashion” that characterised some of the behaviour of some of Cantor’s senior management.