## Facts

- New York Mercantile Exchange, Inc. (NYMEX) operated a futures and options exchange and a clearing house that determined daily settlement prices for futures contracts.
- NYMEX defined settlement prices as end-of-day values for specific futures contracts, used to mark customers’ open positions to market and calculate margin obligations.
- As a designated contract market under the Commodity Exchange Act, NYMEX was required by regulation to record and disseminate settlement prices.
- NYMEX attempted to copyright its settlement prices; the Copyright Office refused registration for the prices themselves but registered NYMEX’s database containing them.
- IntercontinentalExchange, Inc. (ICE) subscribed to NYMEX’s website, obtained daily settlement prices, and used them in connection with clearing ICE customers’ trades.
- NYMEX sued ICE asserting federal copyright infringement based on the settlement prices, federal trademark/service mark claims, and related state-law claims.
- The district court granted summary judgment for ICE on the federal claims and dismissed the state-law claims and counterclaims without prejudice after declining supplemental jurisdiction.

## Issues

1. Whether the daily settlement prices are protectable expression or instead unprotectable under the idea–expression rule and merger doctrine because the “idea” of the settlement price can be expressed only as the number itself.
2. Whether NYMEX’s copyright registration for a database containing settlement prices permitted it to prevent ICE from copying and using individual settlement price numbers.
3. Whether the district court abused its discretion by declining supplemental jurisdiction over the state-law claims after disposing of the federal claims.

## Decision

- The Second Circuit affirmed summary judgment for ICE on the copyright claim.
- The court held that, even assuming NYMEX “created” the settlement prices, enforcing copyright in the numbers would effectively grant exclusive rights in the underlying pricing idea or method, barred by the merger doctrine.
- The court held that any protectability of NYMEX’s database as a compilation did not extend to exclusive control of the individual settlement price data points.
- The Second Circuit affirmed the district court’s decision to decline supplemental jurisdiction and to dismiss the state-law claims and counterclaims without prejudice.

## Legal Principles

- Copyright protects expression, not ideas; when an idea can be expressed in only one or a limited number of practical ways, the expression merges with the idea and is not protectable.
- A single functional number that represents a market settlement value may be unprotectable where controlling the number would confer control over the underlying pricing concept.
- Copyright in a compilation/database may protect original selection or arrangement, but it does not, by itself, confer exclusive rights in the underlying factual data elements.
- After all federal claims are dismissed, a district court may decline supplemental jurisdiction over state-law claims under 28 U.S.C. § 1367(c), reviewed for abuse of discretion.

## Conclusion

The Second Circuit held that NYMEX could not use copyright law to prevent ICE from copying and using NYMEX daily settlement price numbers because protecting those numbers would impermissibly protect the underlying pricing idea under the merger doctrine; it also upheld dismissal without prejudice of the remaining state-law claims after the federal claims were resolved.


New York Mercantile Exchange, Inc. v. Intercontinental Exchange, Inc., 497 F.3d 109 (2d Cir. 2007)