Hague court backs Euronext in options legal row

Financial services company NYSE Euronext has triumphed over a Dutch rival in a preliminary trademark ruling at the Hague District Court.

Euronext runs a derivative trading platform in Amsterdam (and other cities), managing and publishing the AEX Index, for which it owns related trademarks including ‘AEX’ and ‘AEX Index’.

BinckBank, an online investors’ bank, is part of a joint venture called The Order Machine (TOM), which manages an alternative derivatives trading platform.

Euronext claimed that, starting in January this year, TOM had infringed its AEX Index ticker symbols – used to indicate which options are being traded – in its course of business.

On July 8, Judge van Walderveen sided with Euronext, noting that the only difference between the symbols was the addition of the letter “T” on TOM’s tickers.

The judge said that because the symbols “are used for the same (investment) services ... it is possible that as a result confusion comes about in the mind of the average observant and reasonably circumspect normal consumer of the investment services in question, being the average investor”.

TOM and BinckBank were told to change the ticker symbols within four weeks of the judgement and to post a notice on their websites admitting infringement within a week.

The notice says: “On 8 July 2013 the preliminary relief judge of the Hague District Court found that we infringed the trademark rights of NYSE Euronext. By order of the judge we inform you that on TOM MTF there is no trade in NYSE Liffe (Euronext) options the underlying value of which has been founded on the position of the AEX-index. Said options cannot be traded through Binck and Alex either.”

Both companies have posted the notice online.

According to the ruling, TOM can continue offering options based on the AEX Index and referring to the index when trading options on its platform.

TOM chief executive Willem Meijer said in a statement: “As offering options based on the AEX Index is now also approved by the court as well, an important monopoly of the incumbent exchanges is broken.”

Euronext welcomed the ruling in a statement: “This verdict is in the interest of the investing community and retail investors in particular. It is also an important contribution to counteract the misleading of private investors and creating a more transparent market.”

Huib Berendschot, partner at Dutch law firm at AKD, said “it’s important to avoid confusion because you don’t want people to invest in a product other than the one they think they are investing in”.

He added: “A settlement is not entirely unthinkable, but that is a practical observation, as TOM already has to change its ticker symbols (they have four weeks for this and an appeal does not cause suspension of the execution).”

The preliminary ruling precedes a full trial, which, according to Berendschot, is likely to take at least eight to 10 months to complete.

Three other claims, including that TOM spread misleading information, were dismissed by the court.