The U.S. Supreme Court last Monday rejected an appeal by the New York Mercantile Exchange (Nymex) that sought to prevent competing IntercontientalExchange (ICE) from using Nymex settlement prices for oil and natural gas futures.
The high court turned a deaf ear to Nymex’s claim of copyright and trademark infringement by rival Atlanta-based ICE, a major electronic energy trading platform that uses Nymex settlement prices to price the swap transactions offered on ICE’s system. Nymex is the world’s largest commodity futures exchange.
In August the U.S. Court of Appeals for the Second Circuit upheld a lower court’s decision that rejected Nymex’s position that it had copyright exclusivity over its settlement prices (see NGI, Aug. 6, 2007, Oct. 10, 2005).
In affirming the ruling of the U.S. District Court for the Southern District of New York, the appellate court said “we believe there is a strong argument that, like the census taker, Nymex does not ‘author’ the settlement prices as the term is used in copyright law.” It continued that “we therefore…hold that, in using the settlement prices, ICE ‘took nothing more than ideas, for which the copyright law affords no protection to the author.'” Nymex brought the lawsuit in November 2002 after the Copyright Office rejected its application for copyright of its settlement prices.
The decision of the Supreme Court not to review the case is a major victory for ICE and a significant setback for Nymex. The two competitors have been battling each other in court since late 2002.
“We have long maintained that Nymex’s litigation was commercially motivated to stifle competition and protect market data revenues on publicly available information,” said ICE CEO Jeffrey Sprecher. “Throughout this protracted legal process, ICE has remained confident that its use of Nymex settlement prices in connection with its derivatives products did not violate intellectual property rights of Nymex.”
With the Supreme Court’s decision not to hear Nymex’s appeal, “we are pleased that this matter has now been put to rest,” he said.
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