Second Circuit: Merger doctrine bars copyright in commodities settlement prices

August 02, 2007
Post by Blog Staff

The Second Circuit issued a decision yesterday applying the merger doctrine of copyright to settlement prices on a mercantile exchange. The court affirmed summary judgment holding that the settlement prices were not copyrightable, because the expression of the prices (a single number) merged with the idea that was expressed (the fair market value for each contract). Because the expressions of the idea and the idea were so similar, the court concluded "that granting the copyright would bar others from expressing the underlying idea."

More detail of New York Mercantile Exchange, Inc. v. IntercontinentalExchange, Inc. after the jump.

The case involved the settlement prices determined by the New York Mercantile Exchange (NYMEX) for gas and crude oil futures. Settlement prices are valuations that are applied to open contracts at NYMEX and other option companies at the end of the day. The creation and dissemination of the values is required and governed by Federal law. See 17 C.F.R. Pt. 38. Ultimately, the prices are derived by a group of people at NYMEX that analyze the prices at which identical contracts have sold during the day. The determination depends on the number of similar contracts that have changed hands, if there is a significant number of exchanges the price is essentially a weighted average, when there are two few trades there is a more complex process that amounts to an extrapolation of data. NYMEX had been previously unsuccessful in applying for copyright protection of the settlement prices, however, they had received copyright protection for their database, which included the settlement prices.

Intercontinental Exchange (ICE) has a subscription to receive the NYMEX settlement prices and forwards these prices to another firm, the London Clearing House, which manages ICE's customers' trades. NYMEX sued ICE for copyright infringement and other related issues, claiming that the forwarding of the prices was a violation of the copyright of their database. The district court granted summary judgment in favor of ICE, holding that the merger doctrine applied to bar copyright protection, because the idea of what the prices were could not be separated from the expression of the prices themselves.

The Second Circuit affirmed. The court held the prices were an expression of the "fair market value for each NYMEX contract." Because all expressions of that concept would be a number within a "fairly narrow range," the court concluded that the expression (the numerical value) merged with the idea, and was therefore not copyrightable as the copyright "would effectively accord protection to the idea itself."

The court also addressed whether the prices were just "real-world facts," and therefore not subject to copyright protection because of a lack of originality, although it did not resolve the issue. The court was ultimately unwilling to decide whether the prices were just facts to be discovered (as the goal was to determine the actual value of the contracts) or a creative prediction of what the prices may be. In a brief concurring opinion, Judge Hall argued that because the case was resolved by the merger doctrine, the discussion of originality just amounted to potentially dangerous dicta that had the potential to "raise the bar" regarding originality in copyright law, and refused to join that section of the opinion.

To read the full decision in New York Mercantile Exchange, Inc. v. IntercontinentalExchange, Inc., click here.

Interesting tidbit: The United States filed a brief as amicus curiae arguing that the prices were not copyrightable.

Post Categories

Comments (0)
Post a Comment

Captcha Image
Return to the Filewrapper Blog

Search Posts


The attorneys of McKee, Voorhees & Sease, P.L.C. designed this blog as an informational and educational resource about intellectual property law for our clients, other attorneys, and the public as a whole. Our goal is to provide cutting-edge information about recent developments in intellectual property law, including relevant case law updates, proposed legislation, and intellectual property law in the news.


McKee, Voorhees & Sease, P.L.C. provides this blog for general informational purposes only. By using this blog, you agree that the information on this blog does not constitute legal or other professional advice and no attorney-client or other relationship is created between you and McKee, Voorhees & Sease, P.L.C. Do not consider this blog to be a substitute for obtaining legal advice from a qualified, licensed attorney. While we try to revise this blog on a regular basis, it may not reflect the most current legal developments. We consciously refrain from expressing opinions on this blog and instead, offer it as a form of information and education, however if there appears an expression of opinion, realize that those views are indicative of the individual and not of the firm as a whole.

Sign Up For Our Newsletter

Enter your name and email address to receive the latest news and updates from us and our attorneys.

Subscribe to: MVS Newsletter

Subscribe to: Filewrapper® Blog Updates

  I have read and agree to the terms and conditions of McKee, Vorhees & Sease, P.L.C.