"Back to DOJ Antitrust Review of Thomson/West Merger Page"
The following letter was attached to the motion of Lexis-Nexis in support of its motion to intervene in the West-Thomson DOJ proceeding.
The reference in the paragraph titled "paragraph 1" to the March 22 letter agreement most likely to and agreement between Reed (Lexis) and Thomson dated March 22, 1996, shortly after Thomson announced it was merging with West.
The discussion in the paragraph titled "paragraph 4-5" refers to the settlement agreement and license agreements entered into in 1988 between West and Mead. This agreement and the license agreements were "approved" by Judge Rosenbaum. U.S.D.J, D. Minn., who has been supervising the settlment since. This is interesting because it suggests that the Lexis license may not apply to the Internet, since the language describes dial-up access to a centralized database. It also suggest that Lexis agreed not to compete with West in certain areas, i.e., a Veralex type service. For a discussion of this agreement, See the Star-Tribune Series, Page down to the subheading The Electronic Market"
The final paragraph titled "Folio" is another glimpse at the negotiations relating to Folio which is controlled by Reed Elsevier.
The Thomson Corporation
Metro Center at One Station Place
Stamford, Connecticut 06902
Michael Harris
Vice President
General Counsel
August 30, 1996
Louis J. Andreozzi
Vice President and General Counsel
Lexis-Nexis
P.O. Box 933
Dayton, OH 45401
Dear Lou:
Let me address the issues in your letter of August 23.
* Paragraph 1. As you well know, paragraph 2 of our March 22
agreement provides that Thomson and Reed "agree[d] to negotiate"
for an extension of certain agreements. The business terms of
any possible extension were never discussed or agreed, and one
of the reasons it took some time for me to respond to you was to
confirm that fact with Andy Mills. As a result, *and contrary to
your assertion*, neither Brian nor I were ever in a position to
agree to a wholesale extension on current terms, and we never did
so. However, if Andy's discussions with Nigel Stapleton ever
reach the level of discussing specifics, we may eventually reach
an agreement. However, as of now, there is no agreement to extend.
* Paragraphs 4 and 5. Contrary to your assertion that these
paragraphs "merely change the definitions in the existing agreement
to reflect the technology changes from 1988 to 1996," the definitions
proposed for the first time in your letter would amount to *major*
substantive changes in provisions that were, I am told, hotly contested,
negotiated, and compromised in 1988. For instance, your proposed
new definition of "Online" would omit the requirement that "long
distance telecommunications resources" be the link between "the system
of computers or computer terminals" and the "central processing unit
or units." This is *huge* change that would allow *multiple* and
*local* uses far beyond what is permissible under the present agreement.
Another example is your proposed deletion of the
Louis Andreozzi
August 30, 1996
-Page 2-
present requirement that LEXIS "must include the ability to search
for words included in the database." This is another *significant*
change that would allow you to create and distribute a separate
retrieval by citation only service such as VERALEX, something not
permitted under the present agreement.
* Paragraph 7. This was never discussed or agreed upon by Andy
and Nigel.
* Folio. There are a number of issues of concern which are either
not addressed, or not adequately addressed, in the draft Folio agreement
which are of concern: the real effectiveness of the "Chinese Wall" in
light of the fact that the Lexis-Nexis lawyers are working on a matter
we assume the Reed lawyers should be working on; the "equal priority"
clause doesn't protect Thomson against Folio giving Reed more favorable
treatment (because of the use of the term "other customers of Folio
producing revenues for Folio comparable to those amounts paid by Publisher
to Folio"); it is unclear that the license is extended through 1999;
there remains an issue as to whether Thomson discounts should be increased
based upon increases in prospective use of Folio products; and, whether
purchasers of divested products will be assured of Folio access on the
same terms as the current Thomson agreement.
Finally, your comments on paragraphs 2, 3 and 6 reflect your attempt
to take advantage of selected favorable portions of the standard license
agreement (which has been agreed with DOJ), while maintaining portions of
the license agreement which are more favorable to Reed - in particular,
the pricing provision.
We remain prepared for any party, including Reed, to accept the standard
form agreement contained in the Consent Decree, in total, including its
pricing terms. In the alternative, we are prepared to consider changes
in the current agreement, or in the standard form agreement, if they make
good commercial sense and if the business people knowingly agree to them.
We are not amenable to Reed cherry picking those provisions of both agreements
which it finds most beneficial and claiming the right to adopt them
unilaterally.
As Andy has previously said to Nigel Stapleton, and as I have previously
said to you - it makes sense for the business people (not the lawyers) to
discuss and agree on commercial terms. Once that is done, we lawyers can
put those terms into a form
Louis Andreozzi
August 30, 1996
-Page 3-
of agreement. There is no benefit for the lawyers to continue a dialog
without the benefit of an agreement by our business colleagues.
Very Truly Yours,
Michael S. Harris
MSH/kpf
cc: A.G. Mills
B. Hall
J. Schatz, Esq.
E.A. Friedland, Esq.
D. Collins, Esq.