12/27/96 HyperLaw, Inc.®


HyperLaw Comments Re West Spin Control Press Release -- US District Ct. Judge Paul Friedman Ruling Re West Citation Claims Acknowledging HyperLaw - December 26, 1996

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Today Brady Williamson, West Publishing Company's attorney, posted a press release on law-lib trying to place West's spin on the drubbing it took from Judge Friedman in his 52 page opinion in United States v. Thomson and West--much of which was spent deriding West's copyright claims to star-pagination and the damaging effect such claims have imposed on its competitors.

Compare what Judge Friedman stated at page 48:

"the court is forced to conclude that the licensing provision and thus the proposed final judgment ARE BEYOND 'THE REACHES OF THE PUBLIC INTEREST.'"
with what West said about the same order
"a federal district court rejected the objections by competitors opposed to the transaction and found that the divestiture provisions of the proposed consent decree satisfied the public interests requirement of the Tunney Act."
Judge Friedman made the following findings regarding West's star-pagination copyright claims:
"Like Judge Martin, this court has serious doubts about the continuing vitality of the Eighth Circuit's 1986 opinion in Mead Data in view of the subsequent decision of the Supreme Court in Feist. . .and it finds unpersuasive the reasoning in Oasis Publishing."
* * *
"the Court is concerned that including the star pagination license provision in the Final Judgment might be construed as an endorsement of West's dubious copyright claim."
* * *
"the weakness of West's claim and the limited market power of many of those who must pay the license fee, particularly now that the most economically powerful critic of West's position, Thomson, has lost its incentive to contest the claim and joins West in advancing it."
* * *
"The asserted reasonableness of the proposed fees does not resolve the overarching problem that the establishment of a court-approved fee schedule gives Thomson/West permission to profit from its dubious copyright claim while maintaining by court order significant barriers to entry into the relevant markets identified in the complaint by smaller publishers, particularly the CD-ROM market."
The Court concludes this analysis stating:
"The Court suggests that the public interest would be served if West and Thomson would agree to amend the license provisions in the Proposed Final Judgment. . .to provide a free license to all who request one until West's copyright claim is judicially resolved once and for all."

In West's press release, Thomson's president, Brian Hall, refers to this as "some technical details that have to be worked out."

Technical details like free licenses to anyone who wants them. Good spin control !!!

Judge Friedman, though constrained by the Microsoft case and compelled not to second-guess the 'approval' by the United States Department of Justice, documented the absurd positions of the DOJ--positions which will prove in the short term to be a political and professional embarrassment to both the Clinton administration and those in the DOJ who claim credit for this concoction.

It seems by giving deference to the DOJ actions regarding the insignificant divestitures, Judge Friedman made it altogether tougher for West and Thomson to challenge the Judge's "suggestion" that he will not approve a consent decree unless West and Thomson provide a royalty free license for star-pagination, at least until the status of the star-pagination license is judicially determined.

The Judge reviewed many of the comments from opponents and specifically stated in footnote 1 that

"the Court found particularly helpful the public comments of Lexis-Nexis and HyperLaw, Edward Jensen [sic], the Reporter of decisions in California, the American Association of Law Libraries, Matthew Bender & Company, Inc., Geronimo Development Corporation, CD Law, Inc., Alois Gross, and Kathleen Jo Gibson, the Secretary and Clerk to the New Mexico Compilation Commission."
HyperLaw is gratified that the Court addressed the concerns expressed in HyperLaw's comment letters and filings which severely criticized the license agreement.

Despite this victory, HyperLaw remains concerned that Judge Friedman, in an apparent effort to bullet proof his opinion, ignored many clear violations of the Tunney Act. HyperLaw is considering its options with respect to appeal.

Lexis-Nexis currently has a pending appeal relating to Judge Friedman's refusal to permit intervention by Lexis-Nexis.

John Morris's September 1996 American Lawyer article on the merger describes the decision to place a star-pagination on the table as follows:

"Concerned that the talks weren't moving ahead fast enough, Thomson dropped a bombshell-- making a concession that would have been unthinkable under the old regime at West: on June 4, in a meeting with Lawrence Fullerton, Craig Conrath, and other Justice Department lawyers, Thomson's Brian Hall and his general counsel, Michael Harris, announced that Thomson would agree to allow anyone to license West's page numbers under a standard form agreement ..."

In retrospect, the ill-conceived "bombshell" had a delayed fuse, which ended up exploding in West's face.

It is also notable that Brian Hall, president of West Information Publishing Group had previously stated in the press that Thomson had purchased West for its intellectual property and that Thomson would vigorously defend the star-pagination. The corollary apparently is that Thomson-West will downplay the drubbings it is receiving. One interesting point: if Judge Friedman asks West to publish his opinion in Federal Supplement, will West comply, or will it bury the opinion as it has buried opinions in Matthew Bender and HyperLaw v. West.

HyperLaw had pointed out in its papers to Judge Friedman the efforts of West with DOJ support to have a database treaty adopted that would further engorge its monopoly position and referred to West stacking the deck on an ABA subcommittee that promoted database protection. In November, the Washington Post in an editorial opposed to the database protection treaty referred to West as its primary supporter. It now appears that the Patent Office received 600 comment letters in connection with the database treaty --- and only 6 supported the treaty. Of the 6 were West, Lexis-Nexis, and the trade organization dominated by West, the Information Industries Association. In a National Law Review article discussing West's loss to Matthew Bender and HyperLaw in the New York star-pagination and copyright litigation, West expert-in-residence, Robert Berring was quoted as follows:

"'People always react to district court decisions,' say Professor Robert Berring, of the University of California at Berkeley School of Law (Boalt Hall), who is an occasional consultant to West. Judge Martin's ruling will be appealed; if the 2nd U.S. Circuit Court of Appeals affirms, the case may land before the U.S. Supreme Court, which he says may follow 'the trend of our national information policy' that favors protecting electronic data bases."
Ultimately, as discussed elsewhere, the database protection treaty was withdrawn since defeat seemed imminent. If Professor Berring is correct and the Supreme Court follows the national information policy trend as it turned last week, it will reject West's position. Professor Berring incidentally filed an affidavit for West in the DOJ case, as he did as well in numerous other West cases and rule-making proceedings, and Judge Friedman referred to that affidavit in his opinion.