Dow Jones & Company, Inc., on behalf of its business unit Dow Jones Indexes (Dow Jones), has today filed a lawsuit in Illinois State Court in Cook County against the International Securities Exchange, LLC (ISE) and Options Clearing Corporation (OCC) to restrain the ISE from listing and trading options on the Dow Jones Industrial Average (ticker: DJX) without a license. Dow Jones is joined by The McGraw-Hill Companies, Inc., on behalf of itself and its Standard & Poor’s division (“S&P”) and the Chicago Board Options Exchange, Inc. (CBOE) as co-plaintiffs in the action. S&P seeks to prevent the ISE from listing and trading index options on the S&P 500 (ticker: SPX) Index without a license. Currently, both index options trade under licenses exclusively on CBOE.
In 1983, the Illinois Supreme Court, in the landmark case Board of Trade v. Dow Jones & Company, Inc. held Dow Jones and other index providers have the right to require anyone listing and trading derivatives on their proprietary indexes to obtain a license. But ISE recently has taken the position that it can list and trade options on the Dow Jones Industrial Average, and presumably every other index offered by Dow Jones and other index providers, without a license. This is a direct assault on the intellectual property rights of index providers and the industry.
“Dow Jones maintains a proprietary interest in the Dow Jones Industrial Average and its other indexes that vests Dow Jones with the exclusive right to license use of those indexes for trading as the basis for financial products and the right to prevent exchanges from offering index-based financial products without its authorization, said Michael A. Petronella, president, Dow Jones Indexes. “Dow Jones Indexes will continue to take whatever steps are necessary to enforce its intellectual property rights in its indexes.”
