The Second Circuit today invalidated the New York Mercantile Exchange’s claim of copyright in the "settlement prices" of commodity futures contracts.  NYMEX estimates settlement prices for a great many contracts at the end of each day and publishes the results.  IntercontinentalExchange, Inc., copied the NYMEX prices and used them to clear its customers’ trades.  The district court granted ICE’s motion for summary judgment, and the Second Circuit affirmed.  New York Mercantile Exchange, Inc. v. IntercontinentalExchange, Inc., No. 05-5585 (2d Cir. Sept. 7, 2007).

The court held that the "merger" doctrine barred NYMEX’s copyright claim.  Copyright law, the court noted, protects only the "expression" of ideas and not the ideas themselves.  When the means of expressing an idea gets too close to the idea, expression and idea "merge".  Because expression of the idea of settlement prices invariably consists of numbers and express facts that NYMEX does not "create" but instead "discovers" by looking at objective data, they lacked enough distinction from the idea of the value of the underlying futures contracts to deserve copyright protection.

Barry Barnett

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