.jpg)
Concerning the case of dispute over the FTSE Xinhua securities information contract filed by the plaintiff SSE InfoNet Ltd. (SSE InfoNet) against the defendant FTSE Xinhua Index Ltd. (FTSE Xinhua), the Shanghai Pudong New Area People's Court (the Court) rendered the verdict of the first instance on October 31. The Court ruled that the "License Contract on Securities Information" (the Contract) and the attachment signed between SSE InfoNet and FTSE Xinhua on December 29, 2005, shall be terminated on September 4, 2006; the defendant shall pay a penalty of USD20, 000 to SSE InfoNet within 10 days after the judgment takes effect; the plaintiff's other claims in the original claims and the defendant's claims in the counterclaim won't be supported.
According to SSE InfoNet, it signed the Contract and its attachment the "License Agreement on SSE Securities Information " with FTSE Xinhua on December 29, 2005. However, FTSE Xinhua permitted Singapore Exchange Ltd. to develop the financial derivatives of "China A50 Index Futures"based on the real-time "China A50 Index", which is scheduled to go listing on the Singapore Exchange Ltd, without the written permission of the plaintiff. Thus, the plaintiff required that the defendant stop the act of breach of contract. However, the defendant turned deaf ears to the requirement. Thus, the plaintiff filed a lawsuit to the Court, requiring that the two parties terminate the Contract and its attachment; the defendant shall pay the penalty of USD20, 000 and assume the litigation fee and counsel fee.
The defendant FTSE Xinhua claimed that the plaintiff possessed no intelligent property right for the real-time stock quotes since it is SSE's legal duty to announce the real-time stock quotes. Moreover, real-time stock quotes belong to public information, not the object of intelligent property right. Neither the SSE nor the plaintiff has the right to limit its utility by the defendant. Since the "China A50 Index" consists of the real-time quotes of 50 selected stocks and is compiled by the defendant through complicated calculation, the defendant shall have the right to use it according to law or permit others to use it. The "China A50 Index Futures" co-developed by the defendant and the Singapore Exchange Ltd. is based on the "China A50 Index", not within the limit of the Contract. Thus it pledged that the Court reject the plaintiff's claims. Meanwhile, the defendant filed a counterclaim, stating that the contract's limit of using SSE real-time stock quotes belongs to the Article 54 "obvious unjust when signing the contract" in the "Contract Law". Thus, it requested that the Court cancel relevant clauses in the Contract and the whole attachment; rule the plaintiff to assume the litigation fee and counsel fee.
fter hearing and verification by the Court, the plaintiff is the exclusive agent for the SSE securities information authorized by the SSE. On December 29, 2005, the plaintiff and the defendant signed the Contract, upon which, the plaintiff permitted the defendant to use the SSE securities information with payment for one year. It is clearly stated in the Contract that all the SSE securities information defined in the Contract and the license belongs to the SSE. Any institution or individual is not permitted to permanently store or use the SSE securities information without the plaintiff's written permission (including but not limited to copying, spreading, editing, transferring, licensing others to use and developing derivative products). According to the attachment, the defendant's permitted usage of "SSE securities quotes" is "to use the SSE real-time stock quotes to compose index (including only the listed 13 indices and transformation of the aforesaid designated indices)", with the valid period from November 1, 2005 to October 31, 2006. Thus, the defendant shall pay USD10, 000 before November 15, 2006.
Since November 11, 2005, the plaintiff began to provide SSE real-time stock quotes according to the Contract, thus the defendant composed relevant indices including the"China A50 Index". However, the defendant hasn't paid relevant fees till now. On September 5, 2006, the SGX FTSE/Xinhua China A 50 Index future went listing on the Singapore Exchange Ltd. It is a financial derivative product co-developed by the defendant and the Singapore Exchange Ltd. based on the "China A50 Index" composed by the defendant. The "China A50 Index" consists of 38 stocks listed on the SSE.
The Court holds that both the Contract and the attachment between the plaintiff and the defendant reveal true intentions of both parties. Therefore, it is effective and both parties should fulfill overall and objective performance. The plaintiff has provided the defendant with the SSE real-time stock quotes, so the defendant should also scrupulously abide by the obligations stipulated in the Contract. The Contract stipulates that without the plaintiff's written permission, the defendant cannot use the SSE real-time stock quotes to develop derivative products. Now the defendant co-developed the "China A50 Index Futures" with the Singapore Exchange Ltd. for listing. Though it didn't directly provide SSE real-time stock quotes to others, the "China A50 Index Futures" is based on the "China A50 Index", consisting 38 stocks listed on the SSE. The defendant composed the dynamic and real-time "China A50 Index Futures" based on real-time stock quotes of the 38 SSE stocks and other 12 SZSE stocks. The "China A50 Index Futures" listed on the Singapore Exchange Ltd. mainly covers the real-time stock quotes of 50 A share stocks on China stock market. The "China A50 Index Futures" composed by the defendant makes fully use of the real-time stock quotes of the 38 SSE stocks provided by the plaintiff. Thus, the development and listing of "China A50 Index Futures" by the defendant is actually the derivative product developed from the SSE real-time stock quotes provided by the plaintiff according to the Contract, which is an obvious act of breach of the Contract. As to the defendant's counterclaim to cancel the Contract for obvious unjust of the Contract and attachment, the claims won't be supported due to lack of facts and legal basis for the Contract and its attachment revealed true intentions of both parties, and the defendant accepted the real-time stock quotes provided by the plaintiff with payment as a prominent professional index-composing company who should know the function and value of real-time stock quotes. The defendant should have known its rights and liabilities since it signed with the plaintiff the Contract, which was performed by both parties later. Moreover, according to the Contract, should the defendant conduct act of breach of the Contract and fail to correct within the period stipulated in the written notice delivered by the plaintiff, the plaintiff has the right to terminate the Contract and charge the defendant the economic loss and a penalty twice as much as the license fee and users' fees. Thus, the plaintiff's requests of termination of the Contract and a penalty of USD20, 000 are reasonable. Thus, the Court made the aforesaid decree.
