Court Opinion

ID: 9848659
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:24:34.298546+00
Date Added: 2024-06-11T09:18:34.890049
License: Public Domain

HALL, Circuit Judge,
concurring in part.
I agree with the result reached in the majority opinion; NYMEX settlement prices do not merit copyright protection. I write separately, however, to register my disagreement with the majority’s analysis in Part II of its opinion, where it asserts, unnecessarily in my view, that there exists a “strong argument” NYMEX settlement prices lack the requisite originality to qualify for copyright protection. In so doing, the majority renders dicta that contemplate heightening the standards by which we determine whether a work exhibits “some minimal degree of creativity.” Feist Publ’ns v. Rural Tel. Serv. Co., Inc., 499 U.S. 340, 345, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991). This is a step contraindicated both by our jurisprudence and by the procedural posture of this case. Because the application of the merger doctrine, as explained in Part III of the majority’s opinion, makes it unnecessary for us to consider this question of originality, I concur in all but Part II of the majority’s opinion.
In this case, NYMEX faced the task of meeting the originality requirement in the context of an appeal from summary judgment. Rooted in the Constitution, the originality requirement of copyright presents an extremely low bar. Feist, 499 U.S. at 345-46, 111 S.Ct. 1282. To prove possession of a valid copyright, a party must show a subject is an “original work of authorship.” 17 U.S.C. § 102(a); Nimmer on Copyright, § 2.03[A] (2004 ed.). The Supreme Court has emphasized that “[ojriginal, as the term is used in copyright, means only that the work was independently created by the author ... and that it possesses at least some minimal degree of creativity.” Feist, 499 U.S. at 345, 111 S.Ct. 1282. “To be sure, the requisite level of creativity is extremely low; even a slight amount will suffice. The vast majority of works make the grade quite easily, as they possess some creative spark, no matter how crude, humble or obvious it might be.” Id. (internal citations omitted); see also Key Publ’ns v. Chinatown Today Publ’g Enters., 945 F.2d 509, 512-13 (2d Cir.1991).
Accordingly, to survive summary judgment on the issue of originality, NYMEX must show, in “view of the facts in a light most favorable” to it, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), there exists some “genuine issue as to any material fact,” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), of whether the settlement prices contained an “extremely low ... slight amount” of “creative spark, no matter how crude, humble or obvious.” Feist, 499 U.S. at 345, 111 *120S.Ct. 1282. This combined standard is a permissive one indeed, posing a virtually non-existent bar to NYMEX’s efforts to demonstrate the originality of its work.
NYMEX has vouched forcefully for the originality of its settlement prices. NY-MEX asserts it uses “judgment and discretion” to create them; according to one witness, “[t]he whole thing is about opinions.” Indeed, as NYMEX would have it, its Settlement Price Committee is the Shakespeare of the commodities clearing world, crafting its settlement prices like so many numeric sonnets. Naturally, ICE disagrees, and the majority largely credits, albeit in dicta, ICE’s assertions. But, given the permissive originality requirement of our jurisprudence as applied on appeal from summary judgment, I cannot so easily accept that ICE has made such a “strong argument” against the originality of NYMEX’s settlement prices.
The majority attempts to skirt this issue, implicitly acknowledging there may be an element of creativity in producing settlement prices, but asserting that NYMEX “is discovering facts, not creating predictions or estimates.” I respectfully suggest such a rationale is mistaken for at least three reasons.
First, in supposing that NYMEX discovers, rather than creates, the settlement prices, the majority contradicts prior precedent of this Circuit. In CCC Information Services, Inc. v. Maclean Hunter Market Reports, 44 F.3d 61 (2d Cir.1994), we held that an individual car price valuation could be creative; the creativity lay in the integration of “a multitude of data sources, but also on professional judgment and expertise.” Id. at 67. Settlement prices are no different; they arise from the integration of data sources (the prices and circumstances of trades during the day), as well as professional judgment or expertise (the opinion of the Settlement Price Committee). Just as CCC found the creativity inhered in the creation of a valuation, not the discovery of a value, so too should we find that any creativity of NYMEX lies in the creation of the settlement price, not in discovery of a price that may or may not exist at any given point in the trading day. See also CDN Inc. v. Kapes, 197 F.3d 1256 (9th Cir.1999) (O’Scannlain, J.).
Second, it would appear the rationale is circular. The majority instructs that although “it is not clear that we could ever precisely calculate the appropriate valu[e]” of a futures contract, settlement prices nevertheless are unoriginal because they are discoverable facts, not creations of NY-MEX. But why are the settlement prices facts, not creations? Unless I misread the majority opinion, their answer turns on the conclusion that settlement prices lack the spark of originality. In other words, the settlement prices are facts, and therefore unoriginal; they are unoriginal because they are facts. This is a tautology, to which I cannot subscribe.
Third, there is good reason to doubt one predicate of the tautology, that settlement prices are “facts.” A settlement price is an “arbitrary price used as the basis for the settlement of contracts through a clearinghouse.” Webster’s Third New International Dictionary 2079 (2002) (emphasis added). It is “the amount ... treat[ed] as the value, at the end of trading each day, of a particular futures contract for a particular commodity for future delivery at a particular time” (Appellant’s Brief, 6) (emphasis added). The settlement price does not replicate individual trades; nor does it replicate a weighted average of those trades. To the contrary, NYMEX’s settlement price formula includes an override mechanism, such that even if NYMEX did know the precise “fact” of the day’s weighted average, it could adjust that average to conform to *121what it considers, in its judgment or opinion, to be the better “arbitrary price,” or “amount ... treat[ed] as the final value.” Thus, given the posture of this case, one could easily conclude that settlement prices are not preexisting facts about the world; they are evaluative opinions created by NYMEX. True, they derive in part from facts about the world, such as the prices and circumstances of trades during the day (See Majority Opinion at 114, fn 4). But this proves nothing; many copyright-worthy creative works derive in part from facts.
As the majority acknowledges, however, this panel need not — and, indeed, does not — reach the question of originality of settlement prices other than in dicta. Instead, the majority grounds its affirmance of the denial of copyright protection to NYMEX’s settlement prices exclusively by applying the merger doctrine. Because I find the majority’s analysis of the merger doctrine to be persuasive, and because its discussion of originality is unnecessary, I concur in all but Part II of the majority’s opinion.