Please read the below Frequently Asked Questions to find out more about the Chicago Mercantile Exchange's agreement with FPL which provides assurances to FIX Protocol users regarding the use of CME patented technology which affects the FAST Protocol.
Download the agreement by clicking here. (update URL)
Once you have reviewed the agreement and the acknowledgement form that is attached, you may choose to have a senior officer of your firm sign the acknowledgement form on page 9.
Once signed, please fax to + 1 212 422 8570 (Attention: FPL Program Office). Any questions can be communicated to the Program Office at email@example.com or + 1 212 652 4469.
The FIX Protocol now incorporates a standard, referred to as FIX Adapted for Streaming ("FAST Protocol"). FAST is a binary encoding method for message oriented data streams. The encoding method reduces the size of data streams by removing redundant data, thus leveraging data affinities of a stream. The remaining data in the stream is then serialized with respect to a control structure (a template) through binary encoding in the template.
The FAST Protocol is made up of many different components. One of these components is known as Implicit Tagging which is explained in more detail below. The technology behind Implicit Tagging is described in a pending U.S. patent application entitled Market Data Message Format ("the Patent Application"). The Patent application is expected to issue as an enforceable U.S. patent (the "Patent").
The Patent is owned by Chicago Mercantile Exchange Inc (“CME”), one of the largest futures clearing houses in the world and a premier member of FIX Protocol Limited (FPL). CME is fully supportive of FPL and FIX Protocol standards, and provides financial and other support for FPL and the FIX Protocol.
The Patent relates to only a small component of the FIX Protocol (Implicit Tagging), but consent from CME is required to operate within the scope of the Patent. Both CME and FPL, however, wish to facilitate the adoption and deployment of the FAST Protocol. CME has therefore agreed to enter into an agreement with FPL, its affiliates, its members and other users of the FIX Protocol (“FIX Protocol users”). To this end, CME has extended the CME Patent Agreement by which it offers a "covenant not to sue" under the patent. The terms of the covenant not to sue are contained in the CME Patent Agreement.
The purpose of the CME Patent Agreement is to enable FIX Protocol users to use the technology covered by the Patent that is required to provide financial services in a manner compliant with the FAST Protocol standard as incorporated in or by the FIX Protocol.
Please see our “Questions and Answers” section below which provides more information for you as to what the CME Patent Agreement means in practice for a FIX Protocol user.
Implementation of the CME Patent Agreement - Questions and Answers for a FIX Protocol user
Q1 How is the CME Patent associated with the FAST Protocol?
A1 CME has filed for a US patent entitled Market Data Message Format. The Patent Application was published on September 8, 2005 at US patent publication number US 2005/0197916. The technology described in the application relates to a message data structure for communication of market data using "Implicit Tagging." According to the application, Implicit Tagging generally involves using a template that defines field of market data to break down and interpret market data messages.
The application also relates to storing the market data message, as well as the receipt of different types of market data messages from a variety of financial instruments, quotes and other financial data.
The full claims of the patents are described in the published patent application.
Q2 What is the purpose of the CME Patent Agreement?
A2 The CME Patent Agreement allows you to develop and use the technology covered by the Patent that is specifically required for implementing the FAST Protocol for financial services.
The CME Patent Agreement is intended to facilitate your use of the FIX Protocol and to ensure that you are not subject to claims that you are infringing CME's rights in the Patent that are required when using or emplying the FAST Protocol when providing financial services. Thus, the CME Patent Agreement is CME's covenant not to sue.
Q3 What is a covenant not to sue?
A3 A covenant not to sue is a voluntary action by CME that it will not sue FIX Protocol users whose legitimate use of the FAST Protocol in providing financial services would otherwise infringe the Patent. The covenant not to sue is not a full waiver of CME's rights to take action against you as a FIX Protocol user, but is a limited, royalty free, non exclusive, non-transferable, revocable, worldwide promise not to sue under the Patent for limited purposes and/or circumstances.
Q4 Who may benefit from the CME Patent Agreement?
A4 The CME Patent Agreement was entered into between CME and FPL, for the benefit of FPL, its affiliates and its members. It is also available for the benefit of other users of the FAST Protocol who may not be an affiliate or member of FPL.
Q5 How can I, as a user of the FIX Protocol, benefit from the CME Patent Agreement?
A5 The CME Patent Agreement requires FIX Protocol users (who are not an affiliate or member of FPL), who cannot avoid infringing the Patent by using the FIX Protocol to provide financial services, to sign an acknowledgement form, which is attached to the CME Patent Agreement. Once you have signed and returned this form, you acknowledge that you have read the CME Patent Agreement and as a result shall be able to use the FAST Protocol (as incorporated into FIX Protocol) under the terms, conditions, and limitations of the CME Patent Agreement.
Q6 What are the consequences for a FIX Protocol user who does not sign the acknowledgement form?
A6 A FIX Protocol user is not protected by the covenant not to sue under the CME Agreement and may risk infringing the Patent until the time that it signs the acknowledgement form and returns it to FPL. However because the CME Patent Agreement is retroactive, it is very easy for FIX Protocol users to sign the acknowledgement form at any time and in doing so, shall have the protection of the covenant not to sue from the date CME made the application for the Patent (please see Q7 below).
Q7 From what date does the protection commence for FPL and other FIX Protocol users under the CME Patent Agreement?
A7 The CME Patent Agreement is retroactive. This means that an eligible beneficiary of the CME Patent Agreement shall be afforded the relevant protection from the date that CME made an application for the Patent irrespective that the CME Agreement was signed after this date or that you sign the acknowledgement form after this date. Consequently, with the CME Patent Agreement, CME agrees that it will not assert the Patent against FPL, its affiliates and members, and those who return a signed acknowledgement for uses of the FAST Protocol for financial services that cannot avoid infringing the Patent.
Q8 Can my protection under the CME Patent Agreement be withdrawn?
A8 Your protection may be removed if your company files or initiates a law suit or other proceeding in a court of law or before a governmental agency in the United States or any other country, which asserts:
• that CME or any affiliate of CME is infringing a patent or other intellectual property rights owned or controlled by your company (or by any affiliate of your company) related to FAST Protocol, the FIX Protocol or the Patents in any way, and/or
• that any Patent is invalid or unenforceable, unless such action is filed by CME against a then active FIX Protocol user and alleges that such FIX Protocol user infringes a Patent.
CME gives no representation or warranty as to the enforceability or validity of Patents or that the FIX Protocol (with or without the incorporation of the FAST Protocol) can be practiced without infringing any third party's patents or intellectual property rights and CME provides no indemnity to FPL or you.
Q9 What happens if FPL becomes defunct or CME becomes part of another organization?
A9 This agreement is binding and inures to the benefit of the successors and assigns of both CME and FPL.
Q10 What happens if I use the FAST Protocol without using the FIX Protocol?
A10 The CME Agreement covers the limited use of the technology covered by the Patent for the purpose of providing financial services. If you wish to use the FAST Protocol for financial services without expressly using the FIX Protocol, then once you sign up to the CME Patent Agreement, you will be protected by the covenant not to sue.
We hope that these Questions and Answers are helpful. They are not intended as legal advice, and the CME Patent Agreement can be accessed here for your reference accordingly. You should seek competent legal advice should you have any concerns or questions whether your use of the FIX Protocol and/or FAST Protocol is or would be protected under the CME Agreement.