TSX Inc. and Canadian Trading and Quotation System Inc. have reached a deal in the intellectual property lawsuit filed TSX filed against the firm in June of last year, the firms announced today.

TSX, operator of Toronto Stock Exchange and TSX Venture Exchange and CNQ, operator of the CNQ stock exchange and Pure Trading marketplace have been involved with the suit since last summer.

Under the terms of the settlement, CNQ has acknowledged TSX’s ownership and intellectual property rights in the materials under dispute, and TSX has agreed to grant commercial licenses for the continued use of these materials to Pure Trading and its participating vendors and dealers, according to a statement released today.

The intellectual property at the heart of the dispute is the computer protocol language STAMP, which has been used for many years by dealers and vendors to connect to Canadian stock and derivatives exchanges. The protocol has been around for more than ten years and was developed by the industry to facilitate cost effective connectivity to multiple marketplaces in Canada.

The two firms have not released any further terms of the settlement deal and said they will remain confidential.

The original suit filed by TSX claimed damages and other relief arising out of alleged copyright and trade-mark infringement. Last July, after the suit was put forth, Ian Bandeen, vice chairman and CEO of Canadian Trading and Quotation System Inc., said CNQ strenuously rejected allegations contained in the lawsuit.

“The timing of this action is no coincidence,” Bandeen said in a statement last July. “Pure Trading is weeks away from launch following a series of successful tests supported by the dealer and vendor community in North America. The fact that the TSX would initiate a baseless legal claim at this time suggests to our group that they are trying to stifle competition. CNQ and Pure Trading believe that all of the TSX’s allegations are without merit, and that all of the claims will be dismissed. This development will have no impact on our imminent launch,” Bandeen said at that time.

Today, TSX and CNQ also announced they have also agreed to cooperate in other areas related to market access and the delivery of consolidated data solutions. For example, the two company’s have agreed that CNQ’s Pure Trading will be providing its data feeds and supporting gateway access for TSX’s smart order routing (SOR) and ATX(R) initiatives.

As well, TSX will provide its data feeds and supporting gateway access to Pure Trading enabling the provision of order routing services for CNQ’s participating dealers. And finally, CNQ will supply the Pure Trading real time data feeds, including full market depth, to TSX for inclusion in TSX’s Consolidated Data Feed (CDF(TM)) product.

“We will continue to protect and enhance our commercial assets, and are pleased that we have brought this issue to completion,” said Rik Parkhill, interim co-CEO at TSX Group, in a statement. “We believe it is in the best interest of the industry to have access to all marketplaces’ full depth of book, either directly or indirectly, to ensure best execution is obtained. Our SOR and CDF products will both be designed to help achieve that goal.”

“We are very pleased with the outcome of this matter. It is critical that the Canadian capital markets be free of distraction as we collectively embark on the evolution to a more competitive multiple market system,” said Ian Bandeen, in today’s news release. “This will allow us each to move forward and focus on our commercial priorities. We applaud the leadership position that the TSX has taken in helping to resolve this matter in such a mutually satisfactory manner.”