Rapaport suing IDEX - Why and How?

In 2005 Rapaport USA (managed by Martin Rapaport) filed suit against the IDEX, claiming that the latter have violated several property rights and have copies several patents which belonged to Rapaport. As you know both Rapaprt and IDEX manage websites and a database where they post global prices for polished diamonds, according to a diamond's 4c's features and other important attributes. IDEX claimes that the system for diamond trading created by Rapaport is not a valid patent. Rapaport has since stepped back and thought how he could still prove that an infringement took place. Meanwhile the court has stated that there is some doubt on Rapaport's patent's validity and therefore it denied Rapaport's motion.

In more details the dispute focused on Rapaport's claim that the system he created for buying and selling diamonds, including the "RapNet" and the "Internet Diamond Exchange" has been copied by the IDEX to some extent. The fact that the IDEX defines itself as "the only automated wholesale online trading service for industry professionals" surely did not help in keeping Rapaport at ease. Rapaport filed filed a complaint, claiming that the IDEX has violated patent #5950178 by the manner it lists, sells and facilitates diamond sales on its internet site. Rapaport's patent is defined as "a date processing system and method for faciliating transactions in precious stones such as diamonds". In 2006 IDEX counterclaimed that this patent isn't valid, and in addition claimed that it didn't, in fact, infringe this patent.

Later on, as aforesaid Rapaport dismissed its charges, but still argues that his patent is valid and should be defined as such. The IDEX, even though it did win the initial lawsuit is putting efforts in having this patent removed. The motive behind its actions is probably the fact they plan to upgrade its website and the systems which function in it, in a manner that might infringe the patent if it remains valid.

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