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"Protection for Financial Indexes, ETFs, Other Products"

On June 16, 2006, the U.S. Court of Appeals for the Second Circuit issued its much-anticipated decision in Dow Jones & Company, Inc. v. International Securities Exchange, Inc. (“Dow Jones”), in which plaintiffs Dow Jones & Co. (Dow Jones) and The McGraw-Hill Cos. Inc. (McGraw-Hill) appealed from the U.S. District Court’s decision in McGraw-Hill v. International Securities Exchange (McGraw-Hill ).

In Dow Jones, the most recent case dealing with protection of indexes and related products, the court decided that a creator of a financial index did not have sufficient proprietary rights to preclude others from offering options on exchange traded funds (ETFs) based on the index.  Although proprietary rights in financial indexes and certain uses of indexes do exist, Dow Jones and other recent decisions make clear that the creator of an index will not be able to prevent all uses. In Dow Jones, the plaintiffs asserted claims of misappropriation of rights in their indexes and trademark infringement.

In another recent case, New York Mercantile Exchange v. Intercontinental Exchange (NYMEX), the court ruled that the unlicensed use of plaintiff’s settlement prices did not constitute copyright infringement.  Notwithstanding these decisions in which courts have refused to extend rights in indexes.

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