[ by Melanie Gretchen ]

The Chicago Board Options Exchange (CBOE) reinvigorated its rivalry with the International Securities Exchange LLC, when on Monday it filed a complaint in the U.S. District Court in Chicago.  On Monday, the CBOE accused the ISE of infringing on 3 patents related to an automated options trading system.

The patents, which were issued in 2008, 2011 and 2012, cover systems to monitor quote risk and automatically adjust quotes when risk exposure gets too high, the complaint said.     To cover what it described as lost profit and reasonable royalties, it is seeking at least $525 million;  in the event that the infringement was willful, it will seek triple damages.

A History of Violence. Past conflict over a range of intellectual property issues include:

• Six months ago: a U.S. appeals court in Washington, D.C. revived ISE's own patent infringement lawsuit challenging CBOE's hybrid trading system, which combines floor-based "open outcry" trading and electronic trading.  (ISE is an all-electronic platform.)
• Less than 3 weeks later: an Illinois state appeals court upheld a ban on ISE from listing Standard & Poor's 500 index options, one of CBOE's most profitable products, and Dow Jones Industrial Average options.

The case: Chicago Board Options Exchange Inc v. International Securities Exchange LLC, U.S. District Court, Northern District of Illinois, No. 12-09085.

For further details, go to [Reuters, 11/13/12].