N.Y. Mercantile Exch., Inc. v. IntercontinentalExchange, Inc. - 497 F.3d 109 (2d Cir. 2007)

Rule:

The merger doctrine may be applied where there is only one or so few ways of expressing an idea that protection of the expression would effectively accord protection to the idea itself. The appropriate inquiry focuses not on the exact quantity of possible expressions but on the effect of granting copyright protection; the court asks whether protection of expression would inevitably accord protection to an idea.

Facts:

Plaintiff New York Mercantile Exchange, Inc. was an exchange for the trading of futures and options contracts for energy commodities. A futures contract required the delivery of a commodity at a specified price at a specified future time. To that end, on a daily basis, NYMEX would determine the settlement prices for each futures contract. The Commodity Futures Trading Commission ("CFTC"), pursuant to the Commodities Exchange Act ("CEA"), required NYMEX, as a Designated Contract Market, to record and disseminate these prices. Defendant IntercontinentalExchange, Inc. (“ICE”) was one of the subscribers that received settlement prices through a licensed market data vendor. While ICE cannot clear trades itself, it contracted with the London Clearing House ("LCH") to do so. ICE copied NYMEX's settlement prices and forwarded them to LCH. In 2002, NYMEX sought copyright for its database including the settlement prices. After the Copyright Office informed NYMEX that it was unwilling to provide a copyright in settlement prices, NYMEX filed a replacement application and obtained a copyright for its database only. Thereafter, NYMEX brought the present suit in the Southern District of New York, alleging copyright infringement, trademark infringement under federal and state law, and a state law claim of tortious interference with contract. ICE moved for summary judgment on all of NYMEX's claims; NYMEX cross-moved for partial summary judgment on the copyrightability of NYMEX's settlement prices and on its state law tortious interference claim. The district court granted ICE summary judgment on both the copyright and trademark claims; it then declined to exercise supplemental jurisdiction and dismissed the state law claims as well. NYMEX appealed.

Issue:

Under the circumstances, could plaintiff NYMEX obtain copyright for its settlement prices?

Answer:

No.

Conclusion:

Assuming that the settlement prices were created and not discovered, the court applied the merger doctrine to withhold copyright protection because enforcing the copyright would effectively accord protection to the idea itself. Plaintiff could not survive summary judgment because plaintiff did not show that the range of possible settlement prices was broad enough that any possible expression would not necessarily be substantially similar. The court found that any range would be exceptionally narrow because any settlement price would be determined based on the same underlying market facts. Thus, the expression was essential to the statement of the idea.