Federal Appeals Court Strips Downtown Firm of $85 Million Award

By Jason Cato, The Pittsburgh Tribune-Review

Jul. 16–A federal appeals court in Washington this week stripped a Downtown company of nearly $85 million it was awarded last year in a patent infringement case, saying a Wall Street company did not steal its idea for selling municipal bonds over the Internet.

Grant Street Group, formerly known as MuniAuction, in 2001 sued Thomson Corp. and i-Deal in Pittsburgh’s federal court on claims those companies began offering a free service in 1998 that was similar to software the Pittsburgh company developed in 1996 to allow municipalities to sell bonds through online auctions. The city of Pittsburgh paid $10,000 in November 1997 to become the first government to use the Grant Street Group’s service.

Neither the Grant Street Group nor Thomson representatives returned calls seeking comment.

A jury in October 2006 awarded Grant Street Group $38.4 million in damages. U.S. District Judge Gary Lancaster in August doubled that amount to $76.96 million and added $7.66 million in interest. He could have tripled the jury award.

“There is no dispute that (the Grant Street Group) was the first to conduct municipal bond auctions over the Internet,” Lancaster wrote at the time.

A three-member panel of the U.S. Court of Appeals for the Federal Circuit on Monday reversed the verdict and Lancaster’s judgment.

“(W)e note that the use of the Internet and Web browser technology to conduct electronic auctions was well-established at the time the (Grant Street Group) application was filed,” Circuit Judge Arthur J. Gajarsa wrote in a 20-page precedential opinion.

Thomson, now known as Thomson Reuters Corp., sold off its municipal-fund platform more than six years ago. i-Deal, also located in New York, still offered its service at the time Lancaster increased the damages.

The Grant Street Group, located in the Allegheny Building on Forbes Avenue, has more than 50 employees. The company develops, hosts and administers customized software for governments and financial institutions, according to its Web site. The company celebrated its 10th anniversary in November.

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