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IEX aims to dismiss Nasdaq's patent infringement lawsuit

IEX Group Inc. is pushing a New Jersey federal court to dismiss what the exchange operator called Nasdaq Inc.'s "baseless" patent infringement lawsuit filed against it earlier in 2018.

In March, Nasdaq filed the lawsuit against IEX, which controls the newest U.S. stock exchange, claiming that the company infringed on seven of Nasdaq's technology patents while developing its electronic trading platform. The patents represent millions of dollars in investments over decades, Nasdaq said after filing the lawsuit.

Nearly three months later, IEX has asked the U.S. District Court for the District of New Jersey to dismiss Nasdaq's lawsuit, saying in a press release that the patents "claim unpatentable abstract ideas." IEX also said in its release that Nasdaq fails to specifically identify "where or how key elements of its alleged inventions appear in IEX's exchange."

"We built our own technology with the explicit purpose of being a fundamentally different kind of exchange," IEX General Counsel Sophia Lee said in a statement. "This lawsuit is just the latest in a series of baseless attempts by Nasdaq to stop the march of progress toward a fairer and more transparent market for companies, investors and brokers."

A Nasdaq spokesperson declined to comment on IEX's motion.

Since its founding, IEX has questioned the models used by exchange giants including Nasdaq and the New York Stock Exchange, which is owned by Intercontinental Exchange Inc.

Most recently, the company has outlined its plans to enter the corporate listings business, a highly visible venture long dominated in the U.S. by Nasdaq and NYSE. IEX, which originally planned to launch its corporate listings business in early 2018, has outlined a fee credit plan designed to woo companies to switch their listings to its exchange. An exact launch date for the business remains unclear.

In her statement, IEX's Lee pointed to the timing of Nasdaq's claims, saying that they "also coincide with IEX's approval and announced intention to launch a corporate listing business, a business in which Nasdaq has enjoyed a ... duopoly" with NYSE.