TOM, BinckBank Infringe Euronext Trademark Rights, Court Says

The Order Machine, the Dutch alternative trading system that is 25 percent owned by Nasdaq OMX Group Inc., infringed NYSE Euronext trademark rights by using AEX-Index ticker symbols, a Dutch court said.

TOM and online broker BinckBank NV (BINCK), based in Amsterdam, have to remove all AEX-ticker symbols, used to indicate options based on NYSE Euronext’s benchmark AEX-Index for Dutch stocks, from their websites within four weeks, The Hague District Court said in a preliminary ruling today.

Euronext market share of index options has fallen by 30 percent since TOM and BinckBank began offering options based on the AEX-Index on Jan. 21, the exchange owner told the judges at a hearing, according to the ruling. TOM, whose owners include Nasdaq, BinckBank and ABN Amro Clearing Bank, has said it expects to take as much as 40 percent of the Dutch options market by the end of the year.

“It is now firmly stated that the AEX-Index and its related symbols are valid trademarks from NYSE Euronext (NYX) that cannot simply be copied by third parties,” James Dunseath, a London-based spokesman for NYSE Euronext, said by e-mail.

The court didn’t rule on Euronext’s objections against TOM’s use of other ticker symbols, saying there was no pressing interest. Euronext has already filed for a case on the merits at the court in The Hague, according to the ruling.

“It’s good news to know we can use the AEX in the product description and that it must be removed only in the ticker symbol,” TOM Chief Executive Officer Willem Meijer said by telephone. “We have four weeks to adjust our ticker symbols and are investigating now the IT impact for our customers.”

No Trading

TOM and BinckBank have to put a notice on their website saying there is no trading in NYSE Liffe (Euronext) options based on the AEX on TOM’s platform, and that these options are not tradeable via BinckBank or its Alex unit, the court said. They will have to pay 25,000 euros ($32,167) for each day they fail to meet the court’s order, to a maximum of 1 million euros.

Nasdaq is creating a new derivatives market, called NLX, in London to compete with Liffe, Europe’s second-largest derivatives market. The New York-based exchange will operate TOM’s market and has an eight-year contract to provide trading technology.

NYSE Euronext owns Liffe and bourses in Amsterdam, Brussels, Paris and Lisbon in addition to the New York Stock Exchange. The company has agreed to be bought by Intercontinental Exchange Inc.

In February 2011, TOM sued Liffe for membership of the derivatives exchange.

To contact the reporters on this story: Nandini Sukumar in London at nsukumar@bloomberg.net; Maud van Gaal in Amsterdam at mvangaal@bloomberg.net

To contact the editors responsible for this story: Andrew Rummer at arummer@bloomberg.net; Frank Connelly at fconnelly@bloomberg.net

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