New ETF idea - advice please

Innovator

Ok, I know this will sound crazy - but bear with me.

I have come up with an idea for a new ETF.
Can I register / protect / TM / copyright the IP behind my ETF idea and its ticker?
I have no background in financial services, but I believe my idea could be successful.
I realise the ETF market is packed with new gimmicks - but I figure I have little to lose.

I'm thinking of writing to some ETF providers with my idea - but is it possible to protect my idea? Otherwise what is to stop the investment company just using the idea and potentially leaving me with nothing?

Can you copyright an ETF idea?
At the moment I'm planning to post a second copy of my letter to the ETF providers to myself and keep it safe without opening it. Can this act as IP protection - or is that just an urban myth?

What would you do if you came up with a good ETF idea?

AnotherJoe

I am not a lawyer but my immediate thought is, are there any ETFs which are (a) unique and (b) marketed as copyrighted/ uncopyable. Not as far as I know. And even if you came up with a copyrighted idea someone could almost certainly easily come up with a minor twist on it which is essentially the same.
So, I think the answer to your Q is that it's not possible to do what you want.
Look at Vanguard, they pioneered a lot of ideas and never (AFAIK) copyrighted any or tried to stop others with very similar approaches.

Innovator

AnotherJoe wrote: »

I am not a lawyer but my immediate thought is, are there any ETFs which are (a) unique and (b) marketed as copyrighted/ uncopyable. Not as far as I know. And even if you came up with a copyrighted idea someone could almost certainly easily come up with a minor twist on it which is essentially the same.
So, I think the answer to your Q is that it's not possible to do what you want.
Look at Vanguard, they pioneered a lot of ideas and never (AFAIK) copyrighted any or tried to stop others with very similar approaches.

Thank you very much for your reply.
Maybe the fact that the investment company (eg Vanguard) lists the ETF with its ticker on an exchange negates the need the copyright - as the exchange will not list another ETF with the same ticker?

Malthusian

You're going to have to tell us what it is for a specific answer.

If you feel the need to keep it secret then no, it's not copyrightable. If it was copyrightable you could happily tell all and sundry knowing they couldn't copy it without you setting your lawyers on them.

There is nothing to stop anyone launching an index of the top 100 UK shares by market cap and calling it the Innovator UK 100. I am not a copyright lawyer but my instinct is that it doesn't meet the threshold of originality. It would be fairly pointless though because you can't beat the FTSE's brand recognition.

That said, if the idea involves a very specific and original formula for determining inclusion in the index, maybe that would be copyrightable.

I assume when you say you've come up with a new idea for an ETF, you mean a new idea for an index that ETFs could track. If the idea is "someone should launch an ETF that tracks this existing index" then it's either not copyrightable or whoever came up with the index has the copyright.

Innovator

Malthusian wrote: »

You're going to have to tell us what it is for a specific answer.

If you feel the need to keep it secret then no, it's not copyrightable. If it was copyrightable you could happily tell all and sundry knowing they couldn't copy it without you setting your lawyers on them.

There is nothing to stop anyone launching an index of the top 100 UK shares by market cap and calling it the Innovator UK 100. I am not a copyright lawyer but my instinct is that it doesn't meet the threshold of originality. It would be fairly pointless though because you can't beat the FTSE's brand recognition.

That said, if the idea involves a very specific and original formula for determining inclusion in the index, maybe that would be copyrightable.

I assume when you say you've come up with a new idea for an ETF, you mean a new idea for an index that ETFs could track. If the idea is "someone should launch an ETF that tracks this existing index" then it's either not copyrightable or whoever came up with the index has the copyright.

Thanks for your reply.
My proposed ETF does not track any pre-exisitng index. It tracks a basket of companies that all produce certain goods.
It's probably something that Jack Bogle would have referred to as ''the fruits and the nuts''.

dividendhero

I very much doubt it can be copyrighted or patented, but what you could do is print off details of your idea and post it to yourself by registered post - you'll then have proof you thought of it first :money:

Thrugelmir

Innovator wrote: »

I'm thinking of writing to some ETF providers with my idea - but is it possible to protect my idea? Otherwise what is to stop the investment company just using the idea and potentially leaving me with nothing?

Nothing unique in your offering. Unlikely to be sufficient demand to warrant the expense of creating it may be the biggest issue.

bowlhead99

Innovator wrote: »

Thank you very much for your reply.
Maybe the fact that the investment company (eg Vanguard) lists the ETF with its ticker on an exchange negates the need the copyright - as the exchange will not list another ETF with the same ticker?

Well yes, if you list a product with ticker 'NUTZ' on the London stock exchange, nobody else can put a product on the stock exchange with ticker 'NUTZ'. However, they could put a similar or entirely different product on a different stock exchange and call it NUTZ because that abbreviation wasn't already in use on that different exchange. And they could list one in London called NADS or BALZ with their own subtly different method for tracking an index of companies in the boner enhancement industry. Or their industry of choice.

Frankly if the main draw of your investment strategy is its ticker, you have rather a lot of product development to do before you're ready to go to market.

People don't buy and keep a multi million dollar investment in a fund that owns a basket of companies just because "the stock exchange short-code for that fund looks pretty cool, bro". If you want to invest in the AI or robotics / automation sector you can take your pick from Global X's 'BOTZ' or iShares 'RBOT' or perhaps just plain 'ROBO'. The institutional investment managers controlling their trillions of dollars don't think "ohmigod, that one sounds so cute but authoritative, Bender from Futurama was my fave character, i'm totally gonna buy into that one with the cheeky name and not the other one with lower management fees or a more effective portfolio concentration mechanism". Getting a few naive millennials on board by having something snappy to name drop on a social media messaging system is not going to be the difference between long term success or failure.

dividendhero

I don't know exactly how it's done from an IP perspective, but the FTSE100 index is proprietry for 15 minutes after which it becomes open - hence on most websites the index is behind reality

There's an alternative index called "BATS" which is open to all in real time

Innovator

bowlhead99 wrote: »

Well yes, if you list a product with ticker 'NUTZ' on the London stock exchange, nobody else can put a product on the stock exchange with ticker 'NUTZ'. However, they could put a similar or entirely different product on a different stock exchange and call it NUTZ because that abbreviation wasn't already in use on that different exchange. And they could list one in London called NADS or BALZ with their own subtly different method for tracking an index of companies in the boner enhancement industry. Or their industry of choice.

Frankly if the main draw of your investment strategy is its ticker, you have rather a lot of product development to do before you're ready to go to market.

People don't buy and keep a multi million dollar investment in a fund that owns a basket of companies just because "the stock exchange short-code for that fund looks pretty cool, bro". If you want to invest in the AI or robotics / automation sector you can take your pick from Global X's 'BOTZ' or iShares 'RBOT' or perhaps just plain 'ROBO'. The institutional investment managers controlling their trillions of dollars don't think "ohmigod, that one sounds so cute but authoritative, Bender from Futurama was my fave character, i'm totally gonna buy into that one with the cheeky name and not the other one with lower management fees or a more effective portfolio concentration mechanism". Getting a few naive millennials on board by having something snappy to name drop on a social media messaging system is not going to be the difference between long term success or failure.

Thanks for your comments.
Yes, I totally agree about a lot of these ETFs and their tickers.
However, I believe my proposed ETF has a logical investment strategy behind it.

I have done some reading on the IP aspects. But it mainly seems to involve litigation between the indices and the ETF creators.

If you were in my position, which investment companies would you write to?

Innovator

dividendhero wrote: »

I don't know exactly how it's done from an IP perspective, but the FTSE100 index is proprietry for 15 minutes after which it becomes open - hence on most websites the index is behind reality

There's an alternative index called "BATS" which is open to all in real time

Thanks for your comment.
My proposed ETF would not be following any established index.