(NEW YORK) Sept. 5, 2005 – LAWFUEL – The Law News Network – DLA Piper Rudnick Gray Cary US LLP successfully represented International Securities Exchange, Inc. ( ISE), the world’s largest equity options exchange, in a legal dispute concerning the listing of options on exchange-traded funds (ETFs) and whether index providers have a property right in issued ETFs shares that allow them to control the exchanges that list options on those shares.
ISE sought to list options on two major exchange-traded funds (ETFs): Standard & Poor’s Depository Receipts (SPDRs), which are based on the S&P 500 (Standard &Poor’s is a division of The McGraw-Hill Companies, Inc. (McGraw-Hill)), and DIAMONDS, which are based on the stocks included in the Dow Jones Industrial Average and which had been exclusively listed on the Chicago Board Options Exchange. ISE asserted that it could list these options without a license from S&P or Dow Jones.
Both McGraw-Hill and Dow Jones Co., Inc. filed separate lawsuits against ISE earlier this year. Both claimed that unlicensed trading infringed their intellectual property rights in their indexes and their trademarks. Dow Jones sought a preliminary injunction against listing of DIAMONDS options on ISE. On June 6, 2005, the two actions were consolidated. A preliminary injunction hearing was held on June 8 and 13, 2005.
On September 1, 2005, the U.S. District Court for the Southern District of New York denied injunctive relief and granted ISE’s motion to dismiss the complaints. As a result, ISE began listing options on DIAMONDS (R) Trust Series 1 (DIA) that same day, September 1.
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