Nasdaq is suing its relatively new exchange rival IEX Group, claiming it infringed on several patents for electronic trading technology that took millions of dollars to develop.
In a lawsuit filed Thursday in New Jersey federal court, Nasdaq says IEX, also known as the Investors Exchange, employs several former Nasdaq workers who were familiar with the technology there and who have been involved in developing IEX's trading operation.
IEX has said it designed some of its technology based on extensive review of Nasdaq's processes, the lawsuit claims. The tech-stock-heavy Nasdaq said a key feature of its technology that is protected by patents is substantially similar to how IEX works.
The exchange world has been in an upheaval over the last decade as electronic trading took over. IEX emerged as a new exchange in 2016 with a system that slowed down trading in an effort to neutralize the effect of high-frequency trading.
Nasdaq said in a statement, "These seven patents cover important innovations that we, and our customers, rely on for reliability, scalability, and transparency."
In its own statement, IEX said, "Similar to our exchange application process, this is yet another attempt by Nasdaq to obstruct an innovative new competitor."