Tuesday, January 23, 2018

Case of the Day: IPOX Schuster, LLC v. Nikko Asset Mgmt. Co., 2018 U.S. Dist. LEXIS 9161 (N.D. Ill. Jan. 20, 2018)


Plaintiff is a financial management firm that produces "indexes" of companies that recently made initial public offerings. Defendant, a Japanese investment trust, commissioned Lazard Asset Management and Lazard Japan Asset Management to create the "Nikko Fund," a financial product composed of the stocks of U.S. companies that recently went public. In creating the Nikko Fund, Lazard used the information collected by the plaintiff. The plaintiff sued under a number of theories, and the defendants moved for a summary judgment.

The court granted summary judgments on most of the claims. There was no common law misappropriation, because the plaintiff's information was not time-sensitive and Lazard was not free-riding off the plaintiff's information. There was no trademark violation to the extent that the Nikko Fund was marketed in Japan. There was no contract between the parties, either express or implied. The court, however, denied summary judgment on the claims of fraud and trademark violation based on the defendant's presentation of the "Nikko Fund" in New York.


So this is fun. In the finance industry, everyone steals ideas from everyone else--and this case seems to say there can be some recourse, depending on the circumstances.

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