That’s what their letter to TPM says:
[Your] November 23, 2010 article, “‘Eager Beaver’ FBI Agent’s Attempt To Flip Witness Exposed Feds’ Big Insider Trading Case,’ prominently displays a picture of the NYSE Trading Floor despite the NYSE’s complete lack of relevance to, or association with, the underlying story. Misdirecting your audience in this fashion unlawfully diminishes, disparages, tarnishes, and dilutes the NYSE Trademarks (as defined below), causes confusion, violates state and federal laws, and results in trademark infringement.
NYSE owns Federal Trademark rights in one depiction of the Trading Floor and common law rights in the Trading Floor viewed from virtually any angle.... Accordingly, NYSE demands, therefore, that [TPM] immediately cease and desist from any use of its Trademarks and service marks.
The claim is legally unfounded: No-one would think that the TPM article was published by the NYSE or somehow endorsed by the NYSE — just as no-one would think that a newspaper article or a TV program was published or endorsed by the NYSE just because it depicted the trading floor. Nor would the TPM’s actions constitute actionable trademark dilution, for various reasons, one of which is that dilution law generally doesn’t apply outside the context of advertising and merchandising, which is why newspapers and TV shows are generally free to mention company names and display their logos. Copyright law is different, but the NYSE isn’t asserting any copyright claims, likely because it didn’t arrange for this photo to be taken. (Copyrights are initially owned by the photographer, or sometimes the photographer’s employer, not by the owner of the item being photographed. [UPDATE: Josh Marshall of TPM reports that the photograph is indeed owned not by the NYSE, but by a wire services; the TPM licensed the photo from the wire service.])
I’m very glad that TPM is promising not to accede to the NYSE’s demands. For the original TPM story about which the NYSE is complaining, see here. Thanks to Arthur Kirkland for the pointer.