## Facts

- CME Group Index Services, LLC owned the Dow Jones Industrial Average (DJIA), and McGraw-Hill Companies, Inc. owned the S&P 500 index; both indices were produced and maintained through proprietary methodologies and ongoing administration.
- Chicago Board Options Exchange, Inc. (CBOE), a national options exchange, obtained exclusive licenses from the index owners to list and trade options based on the DJIA and S&P 500.
- International Securities Exchange, LLC (ISE), a competing options exchange, developed numerous proprietary indexes but repeatedly sought (and did not obtain) licenses to list DJIA and S&P 500 options.
- On November 2, 2006, ISE publicly announced its intent to list options directly tied to the DJIA and S&P 500 without licenses and pursued a declaratory judgment in federal court that such trading would not infringe rights in the indices.
- On November 15, 2006, CBOE and the index owners sued ISE in Illinois state court, asserting state-law claims including misappropriation of property rights in the indices.
- The circuit court granted summary judgment to plaintiffs on misappropriation and entered a permanent injunction barring ISE from listing options tied to the DJIA or S&P 500 without a license.

## Issues

1. Whether the DJIA and S&P 500 constitute protectable property interests under Illinois common-law misappropriation.
2. Whether ISE’s proposed unlicensed listing of options tethered to those indices satisfied misappropriation elements, including appropriation and competitive free-riding.
3. Whether summary judgment and permanent injunctive relief were proper on the undisputed record.

## Decision

- The appellate court affirmed the grant of summary judgment for CBOE and the index owners on the misappropriation claim.
- The court held the DJIA and S&P 500 are protectable property interests under Illinois misappropriation principles.
- The court concluded ISE’s planned unlicensed options listings would appropriate the indices’ value in direct competition, constituting free-riding.
- The court affirmed the permanent injunction prohibiting ISE from listing options tied to the DJIA and S&P 500 without authorization.

## Legal Principles

- Illinois common-law misappropriation protects certain investment-intensive, information-based products from a competitor’s appropriation that enables free-riding in direct competition.
- A proprietary financial index may qualify as a protectable property interest when its value reflects deliberate design, methodology, and ongoing maintenance rather than mere public facts.
- Using public stock prices is not equivalent to using a proprietary index; offering financial products expressly tethered to a proprietary index can constitute appropriation of the index product itself.
- Summary judgment is appropriate where ownership, exclusivity of licensing, and the defendant’s intent to engage in unlicensed competitive use are undisputed and the remaining question is legal.
- Injunctive relief may be warranted where misappropriation causes ongoing competitive harm that is difficult to measure in money damages and threatens the value of exclusivity and licensing.

## Conclusion

The court treated major stock indexes as protectable property under Illinois misappropriation law and held that a competitor’s unlicensed plan to list options tied to those indexes was actionable free-riding, justifying summary judgment and a permanent injunction to preserve the licensors’ and exclusive licensee’s rights.


Chicago Bd. Options Exch., Inc. v. Int’l Sec. Exch., LLC, 973 N.E.2d 390 (Ill. App. Ct. 2012)