Invesco PowerShares and Select Sector SPDRs settled their lawsuit involving ticker symbols on nine small-cap sector ETFs that resembled tickers of a family of Sector SPDRs ETFs marketed by State Street Global Advisors. PowerShares agreed to change the tickers by the end of next month. Financial terms of the settlement, if any, weren’t disclosed.

The PowerShares offering, launched in April 2010, divides the S&P 600 small-cap index into the nine same sectors. The tickers on the two sets of ETFs are identical, save for an “S” PowerShares added on to the end of each of its funds. SPDR, the trademark holder of the SSgA tickers, sued PowerShares in July 2010, characterizing the similarity as a “deliberate and unconscionable act on the part of PowerShares to confuse both institutional and retail investors." SSgA, the sponsor of the SPDR funds, wasn't involved in the dispute.

“Our intent, when we selected the original tickers was not to confuse, but simply to make it easier for S&P Sector investors to identify the tickers of the new Small Cap S&P Sector ETFs,” Ben Fulton, Invesco PowerShares' managing director of global ETFs, said in a press release issued late on Feb. 16, 2011.

“We were amenable to their proposal because the PowerShares S&P Small Cap Sectors have filled a significant gap in the market and have been very well received by investors,” added Fulton.

For those in the exchange-traded fund industry who were hoping for a legal wrangle exploring nuances of trademark laws and marketing challenges in an increasingly competitive ETF industry, the settlement may come as something of a disappointment. IndexUniverse.com Director of Research Dave Nadig is likely to be among those who are disappointed, as his his blog last summer titled "Welcome To ETF Fight Night" makes clear.

The suit was filed in the U.S. District Court in Houston against PowerShares Exchange-Traded Fund Trust II, INVESCO PowerShares Capital Management, LLC, and INVESCO Distributors, Inc, according to a press release last summer from Select Sector SPDRs. It invoked Section 43 of the Federal Trademark Act as well as the common law of the state of Texas.

“Both parties agree that in the interests of investors, the best course of action is to work together to make the changes,” Dan Dolan, a director of wealth management strategies for the Select Sector SPDR Trust, said in the same press release.

The PowerShares SmallCap Sector ETFs will begin trading under the new tickers in late March 2011; all other attributes of the products will remain unchanged. The new tickers are as follows:

The new tickers on the PowerShares SmallCap Sector ETFs and on their intraday net asset values will go into effect before the end of March 2011. The tickers of the fund’s underlying indexes will remain the same. The funds will maintain their listing on Nasdaq.