Nymex had argued that its Atlanta-based electronic rival was stealing intellectual property by using the settlement prices for its benchmark energy contracts, including light, sweet crude oil and Henry Hub natural gas futures.
Yet the District Court for the Southern District of New York initially ruled in Ice's favor on September 30, 2005 and arguments were then heard in November 2006 for an appeal. It took eight months for the Second Circuit Court of Appeals to reach its final decision.
"This is an important decision for all market participants,” said Ice chairman and CEO Jeffrey Sprecher. “Ice has been confident all along in its position that Nymex has no intellectual property in its settlement prices, and we have been steadfast in our position that we will not allow the threats of a competitor to dictate the direction of our business.”
Sprecher added that his assertion was backed up by the United States Copyright Office, which agreed with Ice’s position that Nymex settlement prices are not copyrightable. With the Second Circuit Court of Appeals affirming this decision in favor of ICE, Sprecher said that the electronic energy and soft commodity exchange now "considers this matter closed.”
Nymex president and CEO James Newsome released a terse statement in reply and added that the exchange may seek further legal action. “While we are clearly disappointed by this decision, it should have no impact on our business as our competitor has for many years been misappropriating, and continues to misappropriate, our settlement prices,” he said.
“The marketplace has already factored this into our business. Nymex will continue to be the leading market innovator for new products and ideas in the energy and metals industry despite the efforts of our competitors to use these proprietary ideas. Nymex is reviewing all of its legal options to pursue them to the fullest extent possible.”
The week on Risk.net, July 7-13, 2018Receive this by email