I’m not a lawyer but…
This appears to me to be one of most frivolous investment-related lawsuits ever. The complaint filed Thursday (7/22/10) in U.S. District Court, Houston by the Select Sector SPDR Trust (“SPDR”) accuses Invesco PowerShares (and related companies) of trademark infringement and misappropriation relating to its use of ETF ticker symbols containing the letters “XL”.
Investment News reports that Invesco adopted the XL symbols “with the intent to obtain free publicity from the trust’s efforts and immediate market recognition,” John Fraser, the lawyer for SPDR, a unit of State Street Global Advisors Inc., wrote in the complaint.
I’m sorry SPDR, but your lawsuit will likely generate more free publicity for Invesco than their tickers symbols ever will. Have you seen their recent volume? Besides, I have never seen any trademark identification indicia in any of your literature referring to ticker symbols. Here is the trademark information from your website in case you are not familiar with it:
“SPDR®” is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”) and has been licensed for use by State Street Corporation. No financial product offered by State Street Corporation or its affiliates is sponsored, endorsed, sold or promoted by S&P or its affiliates, and S&P and its affiliates make no representation, warranty or condition regarding the advisability of buying, selling or holding units/shares in such products. Standard & Poor’s®, S&P®, SPDR®, S&P 500® are registered trademarks of Standard & Poor’s Financial Services LLC and have been licensed for use by State Street Corporation.
The PowerShares Small Cap Sector Suite was launched back on April 7. The nine funds introduced that day all have four-character ticker symbols similar to the three-character ticker symbols used by SPDR Select Sector ETFs with the addition of an “S” on the end. Marketing coup perhaps, but trademark infringement?
OK SPDR, I’m going to try to help you get out of the hole you dug for yourself by throwing out a few questions you should start preparing for:
- Can there really be trademark infringement if there is no trademark?
- Isn’t the XL ticker symbol really owned by XL Group (XL), formerly known as XL Capital (XL)?
- Didn’t XL Group list their shares on the NYSE prior to the Sector SPDR listings?
- Why didn’t you “defend your trademark” in 2005 when the Rydex Russell Top 50 (XLG) was introduced?
- If you think the Invesco ticker symbols are so great, why didn’t you reserve them?
- Did you ever stop to consider that perhaps Invesco added an “S” to the end of the tickers to help investors not confuse their ETFs with yours?
- Isn’t this really sour grapes because Invesco launched small cap sectors before you did?
- Since XL really means “Extra Large” shouldn’t you be laughing at Invesco for using oxymoron “Extra Large Small” tickers instead of suing them for it?
- Have you reserved XL tickers with an “M” suffix for your mid-cap sector ETFs or is that going to be another complaint?
I can’t determine which lawsuit has less merit: this XL ticker symbol suit, or the class action suit against ProShares UltraShort Real Estate (SRS) for performing like the prospectus described it would instead of how some shareholders wanted it to. In the meantime, I have to figure out what to do about all the shirts hanging in my closet that have an XL on the tag.
Special Disclosure: I am not a lawyer. I do not have any positions in Xilinx (XLNX) or any other securities with “XL” in their tickers, but I am long many that contain both “X”s and “L”s in their tickers. I have not read the entire complaint.
Disclosure covering writer, editor, and publisher: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.