Affirmed: Dow Jones vs. ISE
By Journal of Indexes Staff

In a stunning development with significant implications for the indexing industry, the U.S. Court of Appeals for the Second Circuit upheld a lower court's ruling in the case of Dow Jones and McGraw-Hill vs. the International Securities Exchange.

The original ruling found that the International Securities Exchange (ISE) could launch options on index-linked ETFs without paying a licensing fee to the index developers.

Standard and Poor's (S&P) tried to downplay the significance of the ruling, saying that "it is a narrow ruling that applies only to intellectual property rights associated with ETF-based options. The ruling has no impact on S&P's broader index business and associated intellectual propertyrights."

Maybe. But index providers every-where must be shocked by this result, as the general consensus was that the original ruling would be overturned.