Nasdaq Private Market (NPM), a prominent player in the secondary trading of private company stocks, has filed a lawsuit against Hiive, a Vancouver-based private stock marketplace, alleging patent infringement. The legal battle, initiated in the US District Court for the state of Delaware, centers on Hiive’s purported violation of NPM’s patent for its secondary sale settlement and clearance program. This case is attracting significant attention as it could reshape the landscape for secondary market infrastructure.
### What NPM and Hiive Actually Do
Nasdaq Private Market, a spin-off from Nasdaq established in 2013 and operating independently since 2021, offers a platform aimed at providing liquidity for pre-IPO companies. NPM claims its platform is proprietary, standardizing and settling private shares in a market that currently lacks an industry-wide standard. The patent in question, filed in 2023 and approved this March, is crucial to NPM’s business model as it seeks to dominate the secondary market space.
Hiive, on the other hand, was founded in 2022 and has quickly become a notable player in the industry. Despite being relatively new, Hiive has facilitated over $2 billion USD ($2.8 billion CAD) in secondary transactions. The company boasts a significant market presence, with more than 60% of US decacorns reportedly seeing trades on its platform. Hiive’s rise suggests a strong demand for liquidity solutions, even as some companies warn against using unauthorized secondary markets.
### Competitive Context
The secondary market for private company shares has grown rapidly, driven by a trend of companies staying private longer. This has created a burgeoning demand among employees and early investors for liquidity options. In 2025, global transaction volumes for secondary sales reached $226 billion USD ($312 billion CAD), marking a 41% increase from the previous year.
NPM and Hiive are navigating this competitive landscape with distinct strategies. NPM, with its patent-backed platform, emphasizes creating a standardized market infrastructure. Meanwhile, Hiive’s aggressive market capture highlights a different approach, focusing on transaction volume and market penetration. The legal dispute between these two entities underscores the competitive tension in this rapidly evolving industry.
### Real Implications for Founders, Engineers, and the Industry
For founders and engineers, the lawsuit between NPM and Hiive is more than just a legal skirmish; it represents a pivotal moment for the secondary market’s technological and operational future. If NPM’s patent is upheld, it could set a precedent that influences how secondary market platforms are built and operated, potentially stifling innovation by reinforcing barriers to entry for new competitors.
Engineers working in fintech and secondary markets should monitor the outcome closely. A court ruling in favor of NPM may necessitate a reevaluation of existing technologies and processes to ensure compliance with patent laws. This could lead to increased R&D costs and a shift in how platforms approach the development of settlement and clearance technologies.
For investors and venture capitalists, the litigation highlights the risks associated with investing in companies operating in legally contentious spaces. The outcome could impact valuations and the attractiveness of secondary market platforms as investment opportunities. A protracted legal battle or a ruling against Hiive could lead to market consolidation, altering the competitive dynamics and potentially reducing the number of investment targets in this sector.
### What Happens Next
As the lawsuit progresses, both NPM and Hiive face significant uncertainties. NPM’s allegations have yet to be proven in court, but a successful claim could force Hiive to pay substantial damages or even cease operations in the US. For founders and engineers, this case serves as a cautionary tale about the importance of due diligence in intellectual property and the potential legal hurdles that can arise in the quest to innovate and disrupt.
