Case 1:02-cv-09277-JGK-DCF Document 84 Filed 09/30/05 Page 1 of 49
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`_____________________________________________________________
` NEW YORK MERCANTILE EXCHANGE, INC.,
`
`
`Plaintiff/
`
`
`
`Counterclaim-Defendant,
`
`- against -
` INTERCONTINENTALEXCHANGE, INC.,
`
`Defendant/Counterclaimant.
`_________________________________________
` JOHN G. KOELTL, District Judge:
`
`The defendant, IntercontinentalExchange, Inc. (“ICE”),
`brings this motion for summary judgment against the
`plaintiff, New York Mercantile Exchange, Inc. (“NYMEX”) on
`NYMEX’s claims of copyright infringement, arising under the
`Copyright Act of 1976, as amended, 17 U.S.C. §§ 101 et seq.;
`service mark infringement, arising under the trademark laws
`of the United States, 15 U.S.C. §§ 1051 et seq.; ICE’s
`dilution of the NYMEX’s marks under New York General Business
`Law § 360-1 (“GBL”); and a state law claim of tortious
`interference with contract between NYMEX and GlobalView, the
`NYMEX-licensed vendor that provides NYMEX settlement prices
`to ICE.1
`ICE argues that NYMEX’s claim for copyright infringement
`for use of its settlement prices fails for five reasons: (1)
`
`1 In its motion papers, NYMEX withdrew its Third Claim for Relief based on
`an alleged violation of the federal Anti-Dilution statute, 15 U.S.C.
`1125(c), and relied solely on the Fourth Claim for Relief alleging a
`violation of the GBL.
`
`
`
`
`
`02 Civ. 9277 (JGK)
`
`OPINION AND ORDER
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`

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`Case 1:02-cv-09277-JGK-DCF Document 84 Filed 09/30/05 Page 2 of 49
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`the Copyright Office refused to register NYMEX’s settlement
`prices, depriving the Court of subject matter jurisdiction
`over NYMEX’s copyright claim;2 (2) NYMEX’s settlement prices
`are not copyrightable; (3) the Commodity Exchange Act
`(“CEA”), 7 U.S.C. §§ 1 et seq., impliedly repeals the
`Copyright Act because the Commodity Futures Trading
`Commission (“CFTC”) has the authority to regulate NYMEX’s
`distribution of its settlement prices; (4) NYMEX cannot prove
`copyright infringement; and (5) ICE’s use of NYMEX’s
`settlement prices constitutes fair use.
`ICE argues that NYMEX’s service mark infringement claim
`under the federal trademark law fails because ICE’s use of
`NYMEX’s marks constitutes a fair use, and NYMEX’s New York
`State trademark dilution claim must be rejected because NYMEX
`cannot establish a likelihood of dilution where the relevant
`consumer market consists entirely of sophisticated commercial
`entities. Finally, ICE contends that NYMEX cannot prove
`tortious interference with the NYMEX-GlobalView contract
`because ICE had no prior knowledge of the allegedly breached
`portion of that contract.3
`
`
`2 The parties have since stipulated that the Court has subject matter
`jurisdiction over the copyright infringement claim. (See Stipulation and
`Order dated Mar. 7, 2005.)
`3 ICE originally asserted five counterclaims and nine affirmative
`defenses, the second of which was that NYMEX’s claims are barred because
`NYMEX misused the copyright laws in order to harm its principal
`2
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`NYMEX has cross-moved for partial summary judgment on
`the copyrightability of NYMEX settlement prices and on its
`claim of tortious interference with its contract with
`GlobalView. For the reasons stated below, ICE’s motion for
`summary judgment is granted while NYMEX’s cross-motion is
`denied.
`
`
`I.
`This is a case about the settlement prices of two of
`NYMEX’s futures contracts. Unless otherwise noted, the
`following facts are undisputed.
`
`A.
`Plaintiff NYMEX is the world’s “largest exchange for the
`trading of physical commodity futures contracts”--including
`for physical commodities such as natural gas and light sweet
`
`
`competitor. NYMEX moved to dismiss ICE’s counterclaims and Second
`Affirmative Defense pursuant to Fed. R. Civ. P. 12(b)(6) and 12(b)(1).
`The First through Fourth Counterclaims, as well as the Second Affirmative
`Defense, were dismissed without prejudice to replead, and the motion to
`dismiss the Fifth Counterclaim alleging violations of the Lanham Act was
`denied. See New York Mercantile Exchange, Inc. v. Intercontinental
`Exchange, Inc., No. 02 Civ. 9277, 2003 WL 22281573, at *3 (S.D.N.Y. Aug.
`13, 2003).
`ICE’s First Amended Counterclaims then alleged four causes of
`action. NYMEX’s motion to dismiss ICE’s First Amended Counterclaims was
`granted with respect to ICE’s First, Second, and Third Counterclaims.
`See New York Mercantile Exchange, Inc. v. Intercontinental Exchange,
`Inc., 323 F. Supp. 2d 559 (S.D.N.Y. 2004). ICE’s Fourth Counterclaim
`sought a declaratory judgment that NYMEX does not have a copyright in its
`settlement prices, or alternatively, that NYMEX cannot enforce such a
`copyright against ICE, or that ICE has not infringed any such copyright.
`See id. at 560. The prior Opinion and Order noted that NYMEX’s motion to
`dismiss the counterclaims did not address ICE’s Fourth Counterclaim
`relating to NYMEX’s copyright claim, and therefore that counterclaim
`could not be dismissed. See id. at 561 n.1.
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`Case 1:02-cv-09277-JGK-DCF Document 84 Filed 09/30/05 Page 4 of 49
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`crude oil--and for the trading of options on those commodity
`futures contracts. (Def.’s Rule 56.1 Stmt. ¶ 2; Pl.’s Rule
`56.1 Counter-Stmt. ¶ 2.) NYMEX is a “Designated Contract
`Market” (the statutory term for a regulated futures
`exchange), and thus subject to the CEA and the jurisdiction
`of the CFTC. (Def.’s Rule 56.1 Stmt. ¶ 1; Pl.’s Rule 56.1
`Counter-Stmt. ¶ 1.) Two of NYMEX’s most successful futures
`contracts are those for Henry Hub natural gas and West Texas
`Intermediate (“WTI”) crude oil. NYMEX’s Henry Hub futures
`contract provides for delivery of natural gas at “Henry Hub,”
`a natural gas pipeline operating system having its principal
`delivery point in Erath, Louisiana. NYMEX’s WTI crude oil
`futures contract provides for delivery of West Texas crude
`oil in Cushing, Oklahoma. (Def.’s Rule 56.1 Stmt. ¶ 2; Pl.’s
`Rule 56.1 Counter-Stmt. ¶ 2.)
`As part of its operations, a department of NYMEX acts as
`a clearing house (the “NYMEX Clearing House”) for all of the
`commodity futures contracts and options traded over NYMEX’s
`exchange. (Def.’s Rule 56.1 Stmt. ¶ 3; Pl.’s Rule 56.1
`Counter-Stmt. ¶ 3.) Each party who trades futures contracts
`or options must post an initial margin deposit as a
`“performance bond” with a NYMEX clearing member in the form
`of cash or treasury bonds as an assurance that if the trader
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`loses on his or her trades, there will be adequate funds
`available to cover the losses. The individual clearing
`members stand behind the obligations of those who trade and
`clear through them, but as a last resort, the NYMEX Clearing
`House also stands behind each trade. (Def.’s Rule 56.1 Stmt.
`¶ 4; Pl.’s Rule 56.1 Counter-Stmt. ¶ 4.) On each day on
`which a futures contract remains open and unexpired, the
`amount of the required margin deposit changes as the price of
`the underlying commodity--and thus the value of the contract-
`-changes. These changes in the value of the contract are
`determined by reference to the end-of-day “settlement prices”
`for the futures contract. (Def.’s Rule 56.1 Stmt. ¶ 5; Pl.’s
`Rule 56.1 Counter-Stmt. ¶ 5.)
`
`
`B.
`The parties dispute how the relevant settlement prices
`are calculated. NYMEX uses a Settlement Price Committee
`(“SPC”) to assist in the determination of settlement prices
`for each futures contract traded over NYMEX. (Def.’s Rule
`56.1 Stmt. ¶ 6.) According to NYMEX, the SPC does not merely
`assist in determining the settlement price for each futures
`contract, but rather determines the settlement price,
`pursuant to NYMEX’s rules, through a process that reflects
`creativity and the exercise of judgment. (Pl. Rule 56.1
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`Stmt. ¶ 7.) The SPC subcommittee for each type of commodity
`meets to determine the settlement price soon after the close
`of trading on NYMEX, which is 2:30 p.m. Eastern time.
`(Def.’s Rule 56.1 Stmt. ¶ 7.)
`NYMEX Exchange Rule 6.52 governs the determination of
`WTI crude oil contracts settlement prices, while Rule 6.52A
`similarly governs settlement price determinations for Henry
`Hub natural gas contracts. (Def.’s Rule 56.1 Stmt. ¶ 8;
`Pl.’s Rule 56.1 Counter-Stmt. ¶ 8.) Paragraph (A) of Rules
`6.52 and 6.52A provides that the settlement price “shall be
`the weighted average price (rounded to the nearest minimum
`fluctuation) of all outright transactions in that delivery
`month which occur in the closing range” where “(1) as of the
`opening of business for that day has more than ten percent
`(10%) of the total open interest for all delivery months of
`the futures contract and (2) for which 10% of the closing
`range volume in that commodity is done in that delivery month
`. . ..” (See Pl. Ex. 1, 2.) For the purposes of Paragraph
`(A) of Rules 6.52 and 6.52A, the “closing range” is defined
`as the last two minutes of trading at the end of each trading
`day, except for the last day in which a contract trades, when
`the closing range is the last thirty minutes of trading.
`(Def.’s Rule 56.1 Stmt. ¶ 10.)
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`ICE maintains that the weighted average price applied to
`the trades occurring during the closing range can be
`expressed in a particular mathematical formula. (Def.’s Rule
`56.1 Stmt. ¶ 11.) ICE further argues that the NYMEX SPC does
`not itself calculate the volume weighted average price of
`trades that were executed in the closing range, but rather
`relies on a back-office computer program. (Def.’s Rule 56.1
`Stmt. ¶ 12-13.) ICE contends that shortly after the close of
`trading, NYMEX’s SPC receives a printout from NYMEX’s back
`office staff that reports the volume weighted average prices,
`which the SPC adopts as the settlement prices for the
`indicated contracts. (Def.’s Rule 56.1 Stmt. ¶ 17.)
`NYMEX argues that a mathematical formula or computer
`program cannot account for the judgment and discretion used
`in determining settlement prices, such as the discretion
`needed for determining whether a particular trade, despite a
`time stamp, should be included in the closing range. (Pl.’s
`Rule 56.1 Counter-Stmt. ¶ 13, 14.) NYMEX also argues that
`the determination of the criteria for which month(s) the
`settlement price is to be a weighted average price, and the
`determination of which inputs are made in the weighting for
`such month(s), is a matter of discretion, judgment, and
`opinion of NYMEX and its SPC. (Pl.’s Rule 56.1 Counter-Stmt.
`
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`¶ 13.) Furthermore, NYMEX notes that certain rule provisions
`(Rules 6.51(A), 6.52(C), and 6.52A(D)) allow either the SPC
`subcommittee or the individual NYMEX staff member on that
`subcommittee to override the weighted average price for both
`the Henry Hub and WTC futures contracts. (Pl.’s Rule 56.1
`Counter-Stmt. ¶ 6, 9; Pl.’s Ex. 1-2, 4.)
`
`
`
`C.
`Whatever the dispute as to the amount of discretion used
`by NYMEX in determining its settlement prices, there is no
`dispute that NYMEX disseminates its settlement prices through
`licensed market data vendors who distribute them for a fee or
`without charge to subscribers. (Def.’s Rule 56.1 Stmt. ¶ 36;
`Pl.’s Rule 56.1 Counter-Stmt. ¶ 36.)4 One such vendor is
`GlobalView Software, Inc. (“GlobalView”), who on August 7,
`2000 received from NYMEX a limited, worldwide, non-exclusive
`license with respect to “NYMEX Market Data”--which includes
`NYMEX settlement prices--pursuant to a Market Data Agreement
`(“MDA”). (Def.’s Rule 56.1 Stmt. ¶ 39; Pl.’s Rule 56.1
`Counter-Stmt. ¶ 39; see also MDA, attached as Ex. 23 to
`
`
`4 NYMEX also distributes settlement prices through its website and to
`certain national newspapers such as the New York Times and the Wall
`Street Journal for publication in the ensuing day’s edition of these
`newspapers, although not all settlement prices are actually published.
`(Def’s Rule 56.1 Stmt. ¶¶ 34, 35; Pl.’s Rule 56.1 Stmt. ¶¶ 34, 35.)
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`Declaration of Bradley P. Smith dated Sept. 2, 2004 (“Smith
`Decl.”).)
`The MDA permits GlobalView to electronically disseminate
`NYMEX Market Data to its subscribers subject to the terms of
`the Uniform Subscriber Addendum (“USA”). (Def.’s Rule 56.1
`Stmt. ¶ 40; Pl.’s Rule 56.1 Counter-Stmt. ¶ 40; see also MDA
`¶ 3.1.) The MDA divides NYMEX Market Data into three
`categories: (i) Real Time NYMEX Market Data, defined as NYMEX
`Market Data that is redistributed to a subscriber within
`thirty minutes after GlobalView’s receipt of such data; (ii)
`Intermittent Real Time NYMEX Market Data, defined as NYMEX
`Market Data that is redistributed more than two minutes but
`less than thirty minutes after GlobalView’s receipt of such
`data; and (iii) Delayed NYMEX Market Data, defined as NYMEX
`Market Data that is redistributed to a Subscriber more than
`thirty minutes after GlobalView’s receipt of such data.
`(Def.’s Rule 56.1 Stmt. ¶ 41; Pl.’s Rule 56.1 Counter-Stmt. ¶
`41; see also MDA ¶¶ 1.5.1-.3.)
`The MDA states that GlobalView “will not furnish Real
`Time or Intermittent Real Time NYMEX Market Data to any of
`its Subscribers until a Uniform Subscriber Addendum (the
`“Addendum”) . . . has been executed by the Subscriber and
`returned to Vendor.” (MDA ¶ 3.1.) The MDA provides that
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`“NYMEX Market Data shall be furnished to a Subscriber only in
`accordance with the terms of this Agreement and the
`Addendum,” and requires a vendor to use reasonable efforts to
`ensure that its subscribers comply with the terms of the USA.
`(See MDA ¶ 3.1.) NYMEX alleges that GlobalView failed to
`comply with both Paragraph 7.8 and Exhibit C to the MDA by
`not reporting to NYMEX that ICE was redistributing NYMEX
`settlement prices to London Clearing House.5 Exhibit A to
`the MDA contains a representation by GlobalView that
`GlobalView was not furnishing NYMEX Market Data to any
`subscriber who was redistributing NYMEX Market Data to anyone
`by digital datafeeds. (See MDA Ex. A.) According to NYMEX,
`ICE falsely stated to GlobalView that ICE was using NYMEX
`settlement prices only for ICE’s internal purposes. (Pl.’s
`Rule 56.1 Counter-Stmt. ¶ 42.)
`
`
`D.
`ICE started business operations in August 2000. Since
`August 2000, ICE has operated an online Internet-based
`platform for the trading of over-the-counter (“OTC”)
`derivative contracts, including commodity derivative
`
`
`5 Paragraph 7.8 of the MDA provides that, “Vendor will provide the
`information required pursuant to Exhibit C attached hereto and made a
`part hereof.” Exhibit C attached to the MDA provides that vendors must
`submit certain information to NYMEX on an annual basis, including updated
`descriptions of the vendors’ use and distribution of NYMEX Market Data.
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`contracts. (Def.’s Rule 56.1 Stmt. ¶ 43; Pl.’s Rule 56.1
`Counter-Stmt. ¶ 43.) All of the participants on ICE’s
`trading platform are required to be “eligible commercial
`entities” under the CEA, which defines that term to include
`commercial or institutional market participants that satisfy
`certain requirements. (Def.’s Rule 56.1 Stmt. ¶ 44; Pl.’s
`Rule 56.1 Counter-Stmt. ¶ 44.) From the commencement of
`trading on ICE in October 2000 until March 2002, ICE offered
`market participants an “execution-only” (or “bilateral”)
`facility in energy futures, including WTI crude oil and Henry
`Hub natural gas, with no clearing alternative. (Def.’s Rule
`56.1 Stmt. ¶ 45.) Cleared OTC contracts offered by ICE since
`March 2002 were cleared, not by ICE itself, but rather by
`London Clearing House (“LCH”). (See Deposition of David
`Goone dated Apr. 8, 2004 at 161-2 attached to Vol. II,
`Declaration of Herbert C. Ross, Jr. dated Nov. 12, 2004
`(“Ross Decl.”); Deposition of Charles Mackie dated Feb. 24,
`2004 (“Mackie Dep.”) at 31-35 attached to Vol. II, Ross
`Decl.) NYMEX alleges that from in or about March 2002
`through the present, ICE has unlawfully reproduced NYMEX’s
`settlement prices each day that NYMEX settlement prices are
`created, and that ICE has transmitted those reproductions on
`the same day to LCH for the clearing of ICE’s Henry Hub
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`natural gas and WTI crude oil OTC contracts. NYMEX contends
`that this process increases the commissions that ICE receives
`for execution services in connection with trades performed on
`ICE’s platform. NYMEX further alleges that ICE’s use of
`NYMEX settlement prices are not for ICE internal business
`purposes, and that ICE’s use of NYMEX settlement prices free-
`rides on NYMEX’s settlement prices, reputation, and goodwill
`each day. (Pl.’s Rule 56.1 Counter-Stmt. ¶ 45.)
`According to ICE, an OTC swap is generally defined as an
`agreement whereby a floating price is exchanged for a fixed
`price over a specified period, thus allowing a buyer or
`seller of energy products to “lock in” a specific price and
`avoid the risk of floating prices. The financial purpose of
`an OTC transaction, therefore, is usually the same as the
`financial purpose of a NYMEX transaction. (Def.’s Rule 56.1
`Stmt. ¶ 46) (internal citations and quotation marks omitted).
`In drafting OTC swap contracts, ICE contends that market
`participants frequently refer to NYMEX’s settlement prices.
`(Id. ¶ 47.) NYMEX concedes that market participants often
`provide that the parties will refer to a NYMEX settlement
`price to serve as the final settlement price in OTC
`contracts. (Pl.’s Rule 56.1 Counter-Stmt. ¶¶ 46-7.)
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`The International Swaps and Derivatives Association
`(“ISDA”) provides market participants with form swap
`agreements that may contain explicit references to NYMEX’s
`prices, including the terms “NATURAL GAS – HENRY HUB – NYMEX”
`and “OIL – WTI - NYMEX.” (Def.’s Rule 56.1 Stmt. ¶ 48.)
`NYMEX concedes that ISDA provides a form of OTC contract in
`which the parties may choose to refer to a NYMEX settlement
`price among a number of other alternative price references to
`serve as the final settlement price between the parties.
`(Pl.’s Rule 56.1 Counter-Stmt. ¶ 48.) NYMEX does not dispute
`that many market participants in the energy derivatives
`trading industry refer to NYMEX’s settlement prices for its
`WTI and Henry Hub futures contracts as a benchmark price in
`their bilateral OTC contracts. (Def.’s Rule 56.1 Stmt. ¶¶
`52, 57; Pl.’s Rule 56.1 Counter-Stmt. ¶¶ 52, 57.) While
`NYMEX alleges that the conduct of other market participants
`does not rise to the level of use of NYMEX settlement prices
`by ICE, NYMEX does not dispute that market participants trade
`OTC contracts that are based on NYMEX settlement prices,
`which are often called “NYMEX look-alikes” in the industry.
`(Def.’s Rule 56.1 Stmt. ¶ 54; Pl.’s Rule 56.1 Counter-Stmt. ¶
`54.)
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`In facilitating bilateral OTC transactions, ICE does not
`make use of NYMEX settlement prices, but does use the words
`“New York Mercantile Exchange” and “NYMEX” to specify the
`final price that a particular OTC contract settles on.
`(Def.’s Rule 56.1 Stmt. ¶¶ 58-9; Pl.’s Rule 56.1 Counter-
`Stmt. ¶¶ 58-9.) The parties to an ICE swap contract agree to
`“swap” the price that the contract is entered into (the
`“fixed price”) for the price of the underlying commodity at a
`certain date in the future (the “floating price”). Unlike
`NYMEX’s futures contracts, ICE’s Henry Hub and WTI swaps
`contracts are financial instruments that do not provide for
`physical delivery. (Def.’s Rule 56.1 Stmt. ¶ 60.) ICE’s
`Henry Hub swap contract specifications define the floating
`price for that contract as “[a] price in USD per MMBtu dry
`equal to the monthly last settlement price for natural gas
`futures as made public by the New York Mercantile Exchange
`(NYMEX) for the month of production per ISDA commodity
`definitions.” (Def.’s Rule 56.1 Stmt. ¶ 61.) ICE’s WTI swap
`contract specifications define the floating price for that
`contract as “[a] price in USD per barrel equal to the monthly
`last settlement price for WTI crude futures as made public by
`the [NYMEX] for the month of production per ISDA commodity
`definitions.” (Def.’s Rule 56.1 Stmt. ¶ 62.) ICE’s contract
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`specifications are published on its website. (Def.’s Rule
`56.1 Stmt. ¶ 63; Pl.’s Rule 56.1 Counter-Stmt. ¶ 63.) ICE
`contends that its use of the words “New York Mercantile
`Exchange” and “NYMEX” is based upon the ISDA definitions and
`the practice of market participants in the energy derivatives
`industry. (Def.’s Rule 56.1 Stmt. ¶ 64.) NYMEX quarrels
`with any conclusions that could be drawn from ICE’s use of
`the terms “New York Mercantile Exchange” and “NYMEX,” but has
`not disputed the facts concerning ICE’s use of those terms.
`(Pl.’s Rule 56.1 Counter-Stmt. ¶¶ 61-62, 64.)
`In early 2002, ICE announced that it had entered into an
`understanding with LCH to provide clearing house services in
`connection with swaps based on Henry Hub natural gas and WTI
`crude oil. Trading in these contracts commenced in March
`2002. (Def.’s Rule 56.1 Stmt. ¶ 65; Pl.’s Rule 56.1 Counter-
`Stmt. ¶ 65.) LCH, like the NYMEX Clearing House, marks-to-
`market all open contract positions each business day and pays
`or collects variation margin from the contracting parties
`depending on changes in market value. (Def.’s Rule 56.1
`Stmt. ¶ 66.) ICE provides these prices to LCH. ICE contends
`that it uses NYMEX’s settlement prices for Henry Hub natural
`gas and WTI crude oil futures contracts when determining the
`market prices for ICE’s own swap contracts because the NYMEX
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`settlement prices are widely accepted benchmarks. (Def.’s
`Rule 56.1 Stmt. ¶ 67.)
`NYMEX responds that ICE reproduces and labels, as ICE’s
`own, the NYMEX settlement prices for NYMEX’s Henry Hub
`natural gas and WTI crude oil futures contracts. The only
`time that ICE allegedly changes a NYMEX settlement price is
`when ICE has a transaction in the same delivery month during
`its closing range, and calculates a weighted average that is
`different from the NYMEX settlement price for the same
`delivery month. In such cases, ICE moves the NYMEX
`settlement price one “tick” (equivalent to one cent for crude
`oil and one-tenth of one cent for natural gas) closer to the
`ICE weighted average. ICE uses the result of that one-tick
`movement as its settlement price for that month, which it
`then forwards, with reproductions of the NYMEX settlement
`prices for the other delivery months, to LCH. LCH uses these
`settlement prices to clear ICE Henry Hub natural gas and WTI
`crude oil swap contracts. (Pl.’s Rule 56.1 Counter-Stmt. ¶¶
`66, 67.) As in the case of its bilateral contracts, ICE
`refers to the words “New York Mercantile Exchange” and
`“NYMEX” in its contract specifications on its website to
`describe the final price at which its Henry Hub natural gas
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`and WTI crude oil contracts settle. (Def.’s Rule 56.1 Stmt.
`¶ 68.)
`ICE entered into a Proposal and a Software License with
`GlobalView, both dated January 17, 2002 (collectively, the
`“ICE-GlobalView Contract”). (Def.’s Rule 56.1 Stmt. ¶ 69;
`Pl.’s Rule 56.1 Counter-Stmt. ¶ 69.) ICE entered into the
`ICE-GlobalView Contract in order to obtain NYMEX settlement
`prices in connection with LCH’s clearing function. (Def.’s
`Rule 56.1 Stmt. ¶ 70; Pl.’s Rule 56.1 Counter-Stmt. ¶ 70.)
`The ICE-GlobalView Contract contemplates that GlobalView will
`provide ICE with NYMEX settlement prices. The Proposal
`expressly provides that ICE may use these prices “for
`internal use within its database and clearing system.”
`(Def.’s Rule 56.1 Stmt. ¶ 71; Ex. 19 to the Declaration of
`Bradly Smith dated Sept. 2, 2004 (“Smith Decl.”), at GV0052.)
`NYMEX responds that ICE did not tell GlobalView that ICE
`would distribute reproductions of NYMEX settlements prices to
`LCH, and that, in fact, ICE fraudulently misrepresented to
`GlobalView that NYMEX settlement prices would be used
`internally at ICE. ICE allegedly misled LCH by advising LCH
`that ICE would determine ICE settlement prices by using many
`sources of price information. (Pl.’s Rule 56.1 Counter-Stmt.
`¶ 70.) NYMEX further alleges that by forwarding
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`reproductions of NYMEX’s settlement prices to LCH, ICE was
`making an external use of NYMEX’s settlement prices. (Pl.’s
`Rule 56.1 Counter-Stmt. ¶ 71.)
`During negotiations over the ICE-GlobalView Contract,
`GlobalView did not provide ICE with a copy of the NYMEX-
`GlobalView MDA. Emma Vine, a Vice President of Sales at
`GlobalView, stated that she did not give a copy of the
`agreement between NYMEX and GlobalView to ICE and that to her
`knowledge, no one from GobalView provided a copy to ICE.
`(Def.’s Rule 56.1 Stmt. ¶ 72-3; Deposition of Emma Vine dated
`Apr. 7, 2004 at 117 attached to Vol. II, Smith Decl. (“Vine
`Dep.”).) Moreover, R.J. Cummings, an ICE Project Manager,
`and Charles Vice, CEO of ICE, each testified that they did
`not recall receiving a copy of the agreement between NYMEX
`and GlobalView. (Deposition of R.J. Cummings dated Jan. 21,
`2004 at 120, attached as Ex. 30 to Vol. II, Smith Decl.
`(“Cummings Dep.”); Vice Deposition dated Apr. 13, 2004 at
`239-40, attached as Ex. 44 to Vol. II, Smith Decl.) ICE was
`aware, however, that GlobalView had entered into a
`restrictive market data agreement with NYMEX. (Ex. 20 to
`Smith Decl., at ICE 0013461, ¶ 3(a).)
`GlobalView told ICE that signing a Uniform Subscriber
`Addendum (“USA”) was necessary if ICE wanted to receive Real
`
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`Time Data. (Def.’s Rule 56.1 Stmt. ¶ 74; Pl.’s Rule 56.1
`Counter-Stmt. ¶ 74.) GlobalView did not require ICE to sign
`a USA when ICE indicated that it wanted Delayed Data.
`(Def.’s Rule 56.1 Stmt. ¶ 75; Vine Dep. at 78; Cummings Dep.
`at 105-06.)6 ICE always received NYMEX settlement prices
`from GlobalView on a Delayed Data basis, although NYMEX
`points out that ICE received NYMEX prices from another vendor
`on a real-time basis. (Pl.’s Rule 56.1 Counter-Stmt. ¶ 76.)
`ICE has a Settlement Price Committee (“ICE SPC”) that
`determines the settlement prices for each of ICE’s Henry Hub
`and WTI swap contracts according to established practices.
`NYMEX argues that ICE’s SPC for natural gas and crude oil has
`minimal participation and merely adopts reproductions of the
`NYMEX settlement process for Henry Hub and WTI futures
`contracts. According to NYMEX, the only time that ICE makes
`any change to a NYMEX settlement price is when ICE uses its
`“one-tick rule,” as explained above. (Def.’s Rule 56.1 Stmt.
`¶ 81; Pl.’s Rule 56.1 Counter-Stmt.¶ 81.)
`Once settlement prices are calculated for ICE swap
`contracts, ICE transmits them to LCH, which uses them to
`clear the ICE swap contracts. LCH pays or deducts variation
`
`
`6 NYMEX points out that ICE did not explain to GlobalView that ICE would
`provide the market data to LCH. NYMEX does not point to any evidence
`that this was the reason GlobalView did not require a Uniform Subscriber
`Addendum, rather than the stated reason that the USA was not required for
`the receipt of Delayed Data.
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`
`margin depending on the change in the price of a contract
`from the previous day. (Def.’s Rule 56.1 Stmt. ¶ 84; Pl.’s
`Rule 56.1 Counter-Stmt. ¶ 84.) ICE’s settlement prices are
`made available to ICE participants on the ICE trading screen
`after LCH performs its clearing function. ICE participants
`must have a user ID and a password to access this
`information. (Def.’s Rule 56.1 Stmt. ¶ 85; Pl.’s Rule 56.1
`Counter-Stmt. ¶ 85.) ICE alleges that it does not charge
`participants for access to its settlement prices. (Def.’s
`Rule 56.1 Stmt. ¶ 86; Pl.’s Rule 56.1 Counter-Stmt. ¶ 86.)
`ICE does not resell the NYMEX settlement prices or otherwise
`hold itself out as a vendor of NYMEX prices.7 (Def.’s Rule
`56.1 Stmt. ¶ 87.)
`
`
`E.
`On February 12, 2002, Christopher K. Bowen, NYMEX’s
`Senior Vice President and General Counsel, wrote a letter to
`Jeffrey Sprecher, ICE’s Chief Executive Officer, which
`alleged that “ICE’s use of NYMEX settlement prices in
`arriving at ‘floating prices’ constitutes copyright
`
`
`
`7 NYMEX stresses that the vast majority of ICE settlement prices are
`reproductions of NYMEX settlement prices and challenges all statements by
`ICE that suggest that ICE determines its own settlement prices. In
`addition, NYMEX alleges that, by copying NYMEX’s settlement prices for
`LCH’s use and making the settlement prices available on the ICE trading
`screen, ICE receives increased revenues because it offers participants a
`clearing option on LCH and engages in the economic equivalent of selling
`NYMEX’s settlement prices. (Pl.’s Rule 56.1 Counter-Stmt. ¶ 87.)
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`
`infringement . . . .” (Def.’s Rule 56.1 Stmt. ¶ 88; Pl.’s
`Rule 56.1 Counter-Stmt. ¶ 88.) At the time of Mr. Bowen’s
`letter, NYMEX did not possess a copyright registration for
`its settlement prices, and had not applied to register those
`prices with the Copyright Office. (Def.’s Rule 56.1 Stmt. ¶
`89; Pl.’s Rule 56.1 Counter-Stmt. ¶ 89.)
`On March 28, 2002, NYMEX’s attorney, James E. Schatz
`submitted a number of documents to the United States
`Copyright Office via Federal Express, including: a letter
`from Mr. Schatz to Nannette Petruzzelli dated March 28, 2002
`(see Smith Decl. Ex. 4; Deposition of James E. Schatz
`(“Schatz Dep. I”) dated Feb. 13, 2004 at 45-47); a letter
`from Mr. Schatz to the Library of Congress dated March 28,
`2002 (Smith Decl. Ex. 5 at 1; Schatz Dep. I at 45-47); a Form
`TX copyright application signed by Mr. Schatz and bearing the
`date March 28, 2002 (Smith Decl. Ex. 2); a document titled
`“Descriptive Statement for the NYMEX Database,” dated March
`28, 2002; and identifying material of the NYMEX Database
`consisting of printouts from the NYMEX Database (Smith Decl.
`Ex. 4 at 1). (Def.’s Rule 56.1 Stmt. ¶ 90; Pl.’s Rule 56.1
`Counter-Stmt. ¶ 90.)
`The subject line of Mr. Schatz’s letter dated March 28,
`2002 to Ms. Petruzzelli is “Application to Register the
`
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`
`Copyright in the Multiple-File Database (Web Site) of the New
`York Mercantile Exchange, Inc. (‘NYMEX’)”. This letter
`states, in part:
`Per our discussion and later exchange of voice
`mails, we have provided the approximate number
`(although as exact as we could make it) of
`anonymous individual authors who are all members of
`both NYMEX “Settlement Committees” and NYMEX in
`Space 2b. These Settlement Committees, and their
`members, determine, on an every business day basis,
`what are called ‘settlement prices’ for the futures
`and options contracts that are traded on the NYMEX
`exchange. Such settlement prices are determined
`using NYMEX determined factors and parameters (that
`are original to NYMEX) and the educated judgment of
`Settlement Committee members. As such, settlement
`prices are original, educated judgments as to
`appropriate prices similar to the ‘predictions . .
`. of