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Appeals Court Rules in Favor of i-Deal

WASHINGTON - A federal appellate court ruled yesterday that i-Deal LLC's Parity electronic bidding system does not infringe on a 2001 patent obtained by MuniAuction Inc., rejecting a lower court's ruling that i-Deal pay MuniAuction $84.6 million.

A three-judge panel of the U.S. Court of Appeals for the Federal Circuit said that i-Deal "clearly and convincingly" established a case that the MuniAuction patent is "obvious as a matter of law," reversing a ruling last summer by Judge Gary Lancaster of the United States District Court for the Western District of Pennsylvania.

Though the ruling revolves around complex patent law issues, it essentially holds that i-Deal's incorporation of the Web-based tool as part of it competitive auction bidding system was an obvious extension of the product in the late 1990s. The web component is geared toward allowing issuers to see the results of their auction using a Web browser.

I-Deal was formerly a part Thomson Corp. and is now part of Ipreo, an international financial services data provider that was created from the merger of three companies in December 2006. MuniAuction is owned by Pittsburgh-based Grant Street Group.

Circuit Judge Arthur Gajarsa, writing on behalf of a three-judge panel that also included Senior Circuit Judge S. Jay Plager and Circuit Judge Sharon Prost, said that because some elements of the patent were obvious, i-Deal could not infringe additional claims made by MuniAuction. Gajarsa reversed and vacated the lower court's decision.

Ipreo praised the decision yesterday.

"We are extremely pleased that the court has recognized the validity of our case by ruling in our favor so definitively," said Scott Ganeles, chief executive officer of Ipreo. "During the course of this case we've remained confident in the strength of our position, and today's ruling certainly vindicates that."

Allen Williams, managing director and executive vice president of capital markets for Ipreo, said: "We are thrilled to be able to continue to support the municipal community with the highest level of service. We look forward to regaining the flexibility to develop and provide the most advanced and streamlined solutions to our clients."

Myles Harrington, president of Grant Street, was out of the office yesterday, according to a receptionist at the company, who said Grant Street did not plan to comment. Attorneys for the firm did not return phone calls.

The ruling comes after the appellate panel held hearings on the matter last year.

Last summer, the court set aside a permanent injunction that the lower court issued to prohibit Parity's electronic bidding system, which was originally introduced in 1992, from infringing on the patent that MuniAuction obtained in January 2001 for a similar system.

In its request for an injunction to be set aside last year, i-Deal said: "There is a significant likelihood of success on appeal" and that "immediate enforcement of the injunction would disrupt numerous previously scheduled bond auctions, causing great harm both to i-Deal and to the public entities who rely on i-Deal to issue bonds."

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