A leading American stock exchange for private companies is suing its Canadian rival for alleged patent infringement, threatening to derail Vancouver-based The Hiive Company Ltd.’s explosive growth.
Nasdaq Private Market LLC (NPM), a spinoff of Nasdaq Inc., and Hiive operate exchanges that allow clients to swap shares of privately held companies. Their marketplaces are used by employees and private capital investors in “pre-IPO” startups who want to sell their equity but have limited opportunities to do so.
NPM alleged in a May 6 claim filed in the United States District Court for Delaware that Hiive infringed on its patent for standardizing the clearing and settlement of private company share transfers. NPM is asking for “appropriate damages,” as well as a compulsory forward royalty for infringement of the patent. If successful, NPM’s lawsuit could force Hiive to cease operations in the U.S.
Hiive CEO Sim Desai, a former managing director with Setter Capital, which specializes in secondary trades for private equity funds, said in an e-mailed statement that NPM’s lawsuit “is tactical and without merit, and Hiive intends to vigorously defend it. If Canadians want to support Hiive in fending off this bully, then they should sign up for our platform.”
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The pre-IPO private share market has grown rapidly in recent years because many technology companies are staying private for longer. Some giants such as SpaceX, which filed this month to go public, OpenAI and Stripe have remained private even as their valuations soared, sometimes into the hundreds of billions of dollars.
Hiive, NPM and other rivals, including EquityZen and Forge Global, launched marketplaces to allow trading of their shares.
Unlike public markets such as the Toronto Stock Exchange, private markets do not have industry-wide standards for how share transfer information is provided, received or processed. Each private company has its own transfer rules, documentation requirements and approval processes, so exchanges like Hiive standardize the process, while also providing centralized venues for investors and stockowners to price shares available for trade.
Hiive makes money by charging transaction fees, which are paid by sellers and are priced as a percentage of the overall transaction. The minimum transaction size on its platform is US$25,000.
Hiive’s marketplace is open to accredited investors in Canada and the U.S., as well as qualified purchasers in the U.S., which are individuals or entities with $5-million in liquid assets.
Demand has taken off. Hiive, co-founded by Mr. Desai and wife Sarah Huggins, a former litigator who serves as chief operating officer, launched its marketplace in spring 2022. It now facilitates US$300-million of trades per month, and more than US$4-billion in total to date.
Hiive generates more than US$100-million in annualized revenue and the company raised venture capital through its own platform last year in a deal valuing it at US$650-million.
NPM, meanwhile, says it has facilitated 2,000 trades as of late March, amounting to more than US$1.5-billion in transaction value. The company said 1,200 trades were facilitated in 2025 alone.
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But the industry does face headwinds. Some issuers, including Anthropic and OpenAI, have tried to limit trading on private share platforms. Anthropic recently updated its website to warn that investors are not authorized to trade its stock on five platforms, including Hiive, and if they do those transactions will be considered void.
NPM’s attempt to assert its intellectual property is an additional threat.
NPM has operated since 2013 but was spun off by Nasdaq Inc. into a standalone company in 2021. In 2023, NPM filed the paperwork for a patent, arguing that its technology “brings speed, reliability, and transparency to a historically manual and bespoke market,” according to its new lawsuit. In March, the U.S. Patent and Trademark Office granted the patent to NPM.
NPM moved quickly. It sent Hiive a cease-and-desist letter in late March, then sued in early May. One of its central allegations is that Hiive takes non-standardized information, such as sell orders written by e-mail, then turns them into standardized data for its exchange – a process that allegedly directly infringes its patent.
The allegations have not been tested in court. NPM has requested the case be tried by a jury.
Natalie Raffoul, an Ottawa-based intellectual property lawyer, and Louis Carbonneau, CEO with Tangible IP, a Seattle-based patent brokerage and strategic advisory firm, both told The Globe and Mail that Hiive could successfully challenge the validity of the patent.
However, even if Hiive wins, the case is likely to be a costly distraction.
Mr. Carbonneau said his own quick search of past patent filings suggested there are ample amounts of “prior art,” or pre-existing intellectual property, that could be cited to undermine the novelty of what NPM has asserted. To his eyes, the NPM suit could be “more of a public relations move than anything else” to promote NPM’s technology, and signal that other players should licence its patent and platform.
Ms. Raffoul said the patent could also be cancelled if it is found to be based on an abstract concept, as ideas can’t be patented.
However, both experts said Hiive’s lack of its own patents limits its ability to counter NPM with defensive manoeuvring.
“These young software companies need to understand they need registered IP. It is a good form of insurance. They have nothing to counterclaim with,” Ms. Raffoul said.
Patrick Searle, chief executive officer of the Council of Canadian Innovators, echoed their sentiments. “Cases like this are an important reminder that today’s global markets are deeply contested, particularly in sectors where intellectual property, standards, workflows, and platform infrastructure shape competitive advantage,” he wrote in an e-mail.
“Canadian firms must be sophisticated about IP strategy and protection at every stage of growth.”