Intercontinental's claim, which was made as part of a counterclaim in an action initiated by NYMEX, asserts that NYMEX's efforts to prevent Intercontinental from using NYMEX settlement prices by claiming that these prices are copyrightable works of 'authorship' represents an illegal restraint of trade and is intended solely to restrict competition. Intercontinental further asserts that NYMEX is in violation of federal antitrust laws through its practice of illegally tying its futures and OTC execution services to its clearing services and that NYMEX has used a variety of other illegal tactics, including the dissemination of false and misleading information, in its effort to undermine Intercontinental.
Former U.S. Attorney Dan Webb of Winston & Strawn, who is co-counsel to Intercontinental, said: "We believe that NYMEX's contention that its market prices are entitled to copyright protection as original works of authorship and therefore cannot be used by Intercontinental is simply unsupportable. We believe that NYMEX is engaged in the very type of conduct that the antitrust laws are designed to protect against."
"By seeking to prevent its principal competitor, Intercontinental, from using published settlement prices, NYMEX is attempting to maintain its existing monopoly over energy futures trading and expand that monopoly into the OTC arena. This self-serving practice, along with other abusive practices, including the tying of trade execution and clearing, enables NYMEX to extend its market power and extract monopoly fees on clearing. Fair competition requires that NYMEX be forced to end its anticompetitive behavior, which is what our claim seeks to accomplish," said Jeffrey C. Sprecher, Chairman and Chief Executive Officer of Intercontinental.
On November 20, 2002, NYMEX filed a lawsuit seeking to preclude Intercontinental from obtaining access to and using the publicly available prices at which its contracts for North American energy futures are settled. Based on NYMEX's own repeated public statements, its settlement prices reflect actual trading activity and are not set by NYMEX itself. As a regulated monopoly, NYMEX is required under the Commodity Exchange Act and the Rules of the Commodity Futures Trading Commission to publish its settlement prices and these prices are widely referenced as a benchmark by many commercial institutions. In its lawsuit, NYMEX is now reversing its position, claiming that its settlement prices are copyrightable works of 'authorship' that incorporate the 'originality' and 'creativity' of NYMEX's settlement committees. If NYMEX were to prevail in its attempt to selectively prevent one market participant from obtaining access to its publicly available prices, all market participants that rely on these prices would be at risk.
In December 2002, NYMEX announced its intention to introduce an electronic platform for the OTC market, in which its chief competitor would be Intercontinental. Intercontinental is the only market participant that NYMEX has attempted to restrict from referencing its settlement prices. Intercontinental is seeking declaratory relief, injunctive relief, unspecified treble damages and attorneys' fees. Sullivan & Cromwell LLP and Winston & Strawn, well-regarded trial lawyers with extensive experience in antitrust law, have been retained to represent Intercontinental in this matter. The full text of the counterclaim is available on Intercontinental's website at www.theice.com.
About IntercontinentalExchange, Inc.
