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Nasdaq alleges rival stole technical secrets
By Brian Louis and David Voreacos
Bloomberg

Nasdaq has sued a rival exchange operator, accusing Miami International Holdings of infringing patents and stealing trade secrets with help from former Nasdaq employees.

Nasdaq alleges that Miami International copied its core trading technology. Miami International operates two options exchanges, MIAX Options and MIAX Pearl, that handle about 6 percent of the US equity options market. Nasdaq says at least 15 of its former employees joined MIAX. Nasdaq alleges that three of them forwarded technical documents to their personal emails before leaving, while another employee improperly retained some.

Nasdaq, which has an almost two-fifths share of US options trading, asked the court to stop MIAX from infringing seven patents and pay damages. The lawsuit isn’t requesting an order to shut MIAX, something plaintiffs can ask for in cases like this one. The alleged trade-secrets violations center on Nasdaq’s INET technology, which is the core software engine that powers Nasdaq’s exchanges. Nasdaq also licenses that technology to more than 100 exchanges around the world, according to the complaint.

MIAX spokeswoman Dominique Prunetti-Miller didn’t have an immediate comment. Nasdaq spokesman Allan Schoenberg declined to comment.

The MIAX website says its trading platform was ‘‘developed in-house.’’ Nasdaq disputed that assertion in its complaint, saying: ‘‘MIAX instead relied on or piggybacked off of the Nasdaq trade secrets and other technical know-how acquired by former Nasdaq employees during their tenure at Nasdaq.’’