CBOE claims victory in legal battle with rival ISE

Reuters

By John McCrank

NEW YORK, Dec 18 (Reuters) - CBOE Holdings Inc, which runs the largest U.S. options exchange, said on Wednesday a judge had dismissed a challenge by rival International Securities Exchange to CBOE's exclusive license to list options on certain key U.S. indices.

The Chicago Board Options Exchange is the sole market for lucrative options on the Standard & Poor's 500 Index and the Dow Jones Industrial Average, and others like the S&P 100.

In the latest chapter of the years-long dispute, ISE had challenged in a New York court S&P Dow Jones Indices' right to license its indexes. The court dismissed the challenge, saying that an Illinois court had already ruled on the issue, and that ruling would be the final judgment.

ISE said in 2006 it would start offering its own index options based on the S&P 500 Index and the Dow Jones Industrial Average without obtaining a license, prompting CBOE, CME Group Inc and McGraw-Hill to sue. In a 2012 decision, an Illinois appeals court upheld a lower court ruling against ISE.

"Since ISE initiated the litigation more than seven years ago, every court at every level - including the Illinois Appellate Court, the Illinois Supreme Court, the U.S. Supreme Court and, now, a New York Court - has rejected ISE's attempt to trade products that are exclusively licensed to CBOE," CBOE Chief Executive Edward Tilly said in a statement.

A spokeswoman for ISE could not immediately be reached for comment.

ISE, a unit of Deutsche Boerse AG has claimed that CBOE effectively has a monopoly on widely disseminated facts and ideas that are not protected under the Copyright Act.

In March of this year, the Chicago Board Options Exchange extended its exclusive licensing agreements with S&P Dow Jones until 2033.

The case is International Securities Exchange v. S&P Dow Jones Indices, LLC, U.S. District Court Southern District of New York, No. 1:06-cv-12878.

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