U.S. Court Of Appeals Unanimously Affirms ISE's Ability To Trade Options On Exchange Traded Funds Without A License

The International Securities Exchange, Inc. (NYSE:ISE) said today that the United States Court of Appeals for the Second Circuit unanimously affirmed the ruling of the United States District Court for the Southern District of New York which dismissed the complaints of Dow Jones & Company, Inc. and Standard & Poor's, a division of the McGraw-Hill Companies, Inc., against ISE and The Options Clearing Corporation ("OCC").

In 2005, ISE announced its intention to trade options on SPDRs(R) and DIAMONDS(R), widely- known exchange traded funds, without a license from the creators of those funds, S&P and Dow Jones, respectively. S&P and Dow Jones brought suit against ISE and OCC in District Court, alleging that ISE's unlicensed trading infringed their intellectual property rights. The District Court ruled that ISE's unlicensed trading did not infringe the plaintiffs' intellectual property rights and dismissed complaints against ISE and OCC. The Court of Appeals unanimously affirmed the District Court, finding that ISE's creating, listing, trading, and clearing of options on the shares of exchange traded funds that track the performance of stock market indexes does not constitute misappropriation of the stock market index owners' intellectual property or unfair competition, and that ISE's use of the SPDR(R) and DIAMONDS(R) trademarks in listing those options does not constitute trademark infringement or dilution. The Court of Appeals found that the allegations of Dow Jones and S&P were "legally insufficient."