The New York Mercantile Exchange (Nymex) and the IntercontinentalExchange (ICE), Nymex’s chief rival in the energy markets, released contradictory statements Thursday regarding a court decision in their legal battle over the use of Nymex futures settlement prices. Nymex claimed victory, but ICE said the key issue in the dispute was left undecided.
Nymex sued ICE in November 2002 for copyright infringement related to its use of Nymex natural gas and crude oil futures settlement prices. ICE then countersued in January 2003, charging Nymex with abuse of monopoly power for claiming copyright protection over publicly available settlement prices and for efforts to launch its own over-the-counter (OTC) trading platform similar to the one Atlanta-based ICE operates. ICE also owns the London-based International Petroleum Exchange.
ICE said Nymex is trying to eliminate competition by “denying ICE, and only ICE,” access to its settlement prices “while encouraging the balance of the market to rely upon them.”
On Tuesday, Judge John G. Koeltl of the U.S. District Court for the Southern District of New York dismissed ICE’s three antitrust-based lawsuit counterclaims against Nymex, but left a key issue for the Commodity Futures Trading Commission (CFTC) to decide. The court found that because the CFTC has the express power to regulate Nymex distribution of its settlement prices, the CFTC, rather than the court, is the best body to hear ICE’s complaints.
Nymex said the judge agreed that it “has a legitimate business interest in preventing its competitor, ICE, from free-riding on Nymex’s settlement prices…, [which] have value because they are viewed as proxies for market prices.”
“We are gratified that the court supported our position that these claims were without merit and look forward to vindication on the issue of copyright infringement,” said Nymex Chairman Mitchell Steinhause. “The effort and judgment that has gone into establishing our settlement procedures and continues to go into settling our markets each day should not be used by exchange-like organizations to take advantage of our efforts to compete with us.”
ICE, however, refused to grant Nymex any advantage Thursday, saying the judge’s ruling was simply mischaracterized. “Contrary to the statements made by Nymex in its press release, the court did not rule on the central issue of the case — whether ICE is entitled to use the settlement prices — only [determined] the proper venue for certain claims to be heard,” said ICE CEO Jeffrey Sprecher.
Regardless of the court ruling, the legal battle is expected to continue with both Nymex and ICE pursuing their claims against each other.
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