Bloomberg in patent row

Bloomberg, the financial news provider, has come out fighting in a legal battle begun by rival Reuters over alleged patent infringement.

The American group, which is still controlled by Michael Bloomberg despite his promises to sell the business when he was elected mayor of New York, denied any wrongdoing and said it was confident it would beat off the multi-million dollar action launched in the southern district court of New York.

"We are confident that we have not infringed the patent and we believe the suit to be without merit," a spokeswoman for the Bloomberg organisation said last night.

The company was responding to demands for "injunctive relief and damages" from London-based Reuters, which alleges its US rival crossed aline with the launch of its PowerMatch service last year.

The system is used by foreign exchange traders in an area traditionally dominated by Reuters and worth £300m a year in turnover to the British firm.

Lawyers for Reuters are understood to be relying on a precedent created by the estate of Jerome Lemelson, who invented the forerunner to the bar code scanner.

Reuters wants to ensure that its rival does not make further inroads into its business.

"Reuters has invested millions in research and development to deliver the best automated trading technology to the market," a company spokesman said yesterday.

"Although Reuters had preferred not to resort to litigation, it cannot allow the unauthorised use of its intellectual property."

It is not the first time these huge financial news and information groups have clashed. In 1998, the FBI took a look at the Reuters business following allegations from Bloomberg that someone was unlawfully penetrating its electronic system. The FBI dropped the case and no legal action resulted.

Mr Bloomberg claims his organisation has continued to grow despite the downturn in the stock market and investment banking arenas.

"We are still recording positive sales," the Bloomberg spokeswoman insisted, but declined to quote figures for the company, which does not issue financial statements.