39894 Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 / Notices

800, Las Vegas, Nevada, at U.S. EPA

Region IX, 75 Hawthorne Street, San

Francisco, CA, and at the Consent

Decree Library, 1120 G Street, N.W., 4th

Floor, Washington, D.C. 20005, (202)

624–0892. A copy of the Consent Decree

may be obtained in person or by mail

from the Consent Decree Library, 1120

G Street, N.W., 4th Floor, Washington,

D.C. 20005. In requesting a copy, please

enclose a check in the amount of $6.75

(25 cents per page reproduction cost)

payable to the Consent Decree Library.

Joel M. Gross,

Chief, Environmental Enforcement Section,

Environment and Natural Resources Division.

[FR Doc. 98–19734 Filed 7–23–98; 8:45 am]

BILLING CODE 4410–15–M

DEPARTMENT OF JUSTICE

Antitrust Division

Proposed Final Judgment and

Competitive Impact Statement; United

States v. General Electric Company

and InnoServ Technologies, Inc.

Notice is hereby given pursuant to the

Antitrust Procedures and Penalties Act,

15 U.S.C. 16(b)–(h), that a proposed

Final Judgment, Stipulation, and

Competitive Impact Statement have

been filed with the United States

District Court for the District of

Columbia in United States v. General

Electric Company and InnoServ

Technologies, Inc., No.

1:98CV01744RCL (D.D.C., filed July 14,

1998). On July 14, 1998, the United

States filed a Complaint alleging that the

proposed acquisition of InnoServ by

General Electric would violate Section 7

of the Clayton Act, 15 U.S.C. 18. The

proposed Final Judgment, filed the same

time as the Complaint, permits General

Electric to acquire InnoServ but requires

that General Electric divest InnoServ’s

PREVU diagnostic software used in the

maintenance and repair of diagnostic

imaging machines (e.g., CT scanners,

MRIs, x-ray machines). Copies of the

Complaint, proposed Final Judgment,

and Competitive Impact Statement are

available for inspection at the

Department of Justice in Washington,

D.C., in Room 215, 325 Seventh Street,

N.W., and at the Office of the Clerk of

the United States District Court for the

District of Columbia, 333 Constitution

Avenue, N.W., Washington, D.C.

Public comment is invited within 60

days of this notice. Such comments, and

responses thereto, will be published in

the Federal Register and filed with the

Court. Comments should be directed to

Mary Jean Moltenbrey, Chief, Civil Task

Force, Antitrust Division, Department of

Justice, Suite 300, 325 7th Street, N.W.,

Washington, D.C. 20530 (telephone:

202/616–5935).

Constance Robinson,

Director of Operations and Merger

Enforcement, Antitrust Division.

Stipulation and Order

The undersigned parties, by their

respective attorneys, stipulate that:

1. The Court has jurisdiction over the

subject matter of this action and over

each of the parties, and venue of this

action is proper in the District of

Columbia.

2. The Court may enter and file a

Final Judgment in the form hereto

attached upon the motion of any party

or upon the Court’s own motion at any

time after compliance with the Antitrust

Procedures and Penalties Act (15 U.S.C.

16(b)–(h)), and without further notice to

any party or other proceedings,

provided that the United States has not

withdrawn its consent, which it may do

at any time before the entry of the

proposed Final Judgment by serving

notice on defendants and by filing that

notice with the Court.

3. The defendants agree to comply

with the proposed Final Judgment

pending its approval by the Court, and

shall, from the date of signing this

Stipulation, comply with all the terms

and provisions of the proposed Final

Judgment as though it were in full force

and effect as an order of the Court,

provided, however, that defendants

shall not be bound by the terms and

provisions of the proposed Final

Judgment unless and until the closing of

any transaction in which General

Electric Company directly or indirectly

acquires all or any part of the assets or

stock of InnoServ Technologies, Inc.

4. If the United States withdraws its

consent, or the court does not enter the

proposed Final Judgment pursuant to

the terms of the Stipulation, the time for

all appeals of any Court ruling declining

entry of the Final Judgment has expired,

and the Court has not otherwise ordered

continued compliance with the Final

Judgment, then the parties are released

from all further obligations under this

Stipulation, and the making of this

Stipulation shall be without prejudice to

any party in this or any other

proceeding.

5. The parties request that the Court

acknowledge the terms of this

Stipulation by entering the Order in this

Stipulation and Order.

Dated: July 14, 1998.

Respectfully submitted,

FOR PLAINTIFF UNITED STATES OF

AMERICA:

Joel I. Klein,

Assistant Attorney General.

John M. Nannes,

Deputy Assistant Attorney General.

Constance K. Robinson,

Director of Operations and Merger

Enforcement.

Mary Jean Moltenbrey,

Chief, Civil Task Force.

Susan L. Edelheit,

Assistant Chief, Civil Task Force.

Jon B. Jacobs, Fred E. Haynes, Joan H. Hogan,

Peter J. Mucchetti,

Attorneys for the United States.

Bernard M. Hollander,

Senior Trial Attorney, Antitrust Division,

United States Department of Justice, 325

Seventh Street, NW., Suite 300, Washington,

DC 20530, (202) 514–5012.

For Defendant General Electric Company:

Richard L. Rosen,

Arnold & Porter, 555 Twelfth Street, NW.,

Washington, DC 20004, (202) 942–5499.

For Defendant Innoserv Technologies, Inc.:

Malcolm R. Pfunder,

Gibson, Dunn & Crutcher LLP, 1050

Connecticut Avenue, NW., Washington, DC

20036, (202) 955–8227.

So ordered on this ll day of

llllll

lllllllllllllllllllll

United States District Judge.

Final Judgment

Plaintiff, United States of America,

filed its Complaint on July 14, 1998.

Plaintiff and defendants, General

Electric Company (‘‘GE’’) and InnoServ

Technologies, Inc. (‘‘InnoServ’’), by

their attorneys, have consented to the

entry of this Final Judgment without

trial or adjudication of any issue of fact

or law. This Final Judgment shall not be

evidence or admission by any party

with respect to any issue of fact or law.

Defendants have agreed to be bound by

the provisions of this Final Judgment

pending its approval by the Court.

The essence of this Final Judgment is

the prompt and certain divestiture

through sale or licensing of certain

rights or assets by the defendants to

establish a viable competitor in the sale

of service for certain models of GE

diagnostic imaging equipment, in the

sale of comprehensive assetmanagement or multi-vendor services,

or in the licensing of advanced

diagnostic software for use in any such

service. Defendants have represented to

the United States that the sale required

below can and will be accomplished

and that defendants will later raise no

claims of hardship or difficulty as

grounds for asking the Court to modify
Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 / Notices 39895

any of the divestiture provisions

contained below.

Therefore, before any testimony is

taken, without trial or adjudication of

any issue of fact or law, and upon

consent of the parties, it is Ordered,

Adjudged and Decreed:

I Jurisdiction

This Court has jurisdiction over the

subject matter of and each of the parties

to this action. The Complaint states a

claim upon which relief may be granted

against GE and InnoServ under Section

7 of the Clayton Act, as amended, 15

U.S.C. 18.

II Definitions

As used in this Final Judgment:

(A) ‘‘Diagnostic imaging equipment’’

means equipment that produces images

of the interior of the human body used

for diagnostic or therapeutic purposes in

the practice of medicine.

(B) ‘‘GE’’ means defendant General

Electric Company, a New York

corporation with headquarters in

Fairfield, Connecticut, its successors,

assigns, divisions, subsidiaries, and

affiliates, each other person directly or

indirectly, wholly or in part, owned or

controlled by it, and each partnership or

joint venture to which any of them is a

party, and its directors, officers,

employees, agents, consultants, or other

persons acting for or on behalf of any of

them.

(C) ‘‘InnoServ’’ means defendant

InnoServ Technologies, Inc., a

California corporation with

headquarters in Arlington, Texas, its

successors, assigns, divisions,

subsidiaries, and affiliates, each other

person directly or indirectly, wholly or

in part, owned or controlled by it, and

each partnership or joint venture to

which any of them is a party, and its

directors, officers, employees, agents,

consultants, or other persons acting for

or on behalf of any of them.

(D) ‘‘PREVU diagnostic package’’

means the intellectual property and any

other related assets owned by InnoServ

as part of its proprietary advanced

diagnostic service, including its PREVU

remote access software, PREVU

computer, and cables necessary to

interface the PREVU computer to

diagnostic imaging equipment for the

purpose of performing on-site and

remote diagnostics.

III Applicability

This Final Judgment applies to the

defendants, and each of their successors

and assigns, subsidiaries, affiliates,

directors, officers, managers, agents, and

employees, and all other persons in

active concert or participation with any

of them who receive actual notice of this

Final Judgment by personal service or

otherwise.

IV Sale of Prevu Diagnostic Package

(A) GE is ordered, within 180

calendar days from the date of the filing

of the Complaint in this action or five

days after notice of entry of this Final

Judgment by the Court, whichever is

later, to sell InnoServ’s PREVU

diagnostic package to an acquirer

acceptable to the United States in its

sole discretion. The United States, in its

sole discretion, may agree to an

extension of this time period of up to 30

calendar days, and shall notify the Court

in such circumstances. GE agrees to use

its best efforts to accomplish the sale as

expeditiously as possible.

(B) Unless the United States otherwise

consents in writing, the sale of the

PREVU diagnostic package shall include

the entire PREVU diagnostic package

and be accomplished in such a way as

to satisfy the United States, in its sole

discretion, that the PREVU diagnostic

package can and will be utilized by the

purchaser as a part of a viable, ongoing

business. The sale, whether made by GE

under this section or by a trustee under

Section V, shall be made to a purchaser

that, in the United State’s sole

judgment: (1) has the capability and

intent of competing effectively, and (2)

has the managerial, operational, and

financial capability to compete

effectively, in the sale of service for

certain models of GE diagnostic imaging

equipment, in the sale of comprehensive

asset-management or multi-vendor

services, or in the licensing of advanced

diagnostic software for use in any such

service. Furthermore, none of the terms

of any agreement between the purchaser

and GE shall give GE the ability

unreasonably to raise the purchaser’s

costs, to lower the purchaser’s

efficiency, or otherwise to interfere in

the ability of the purchaser to compete

effectively.

(C) In accomplishing the sale ordered

by this Final Judgment, GE promptly

shall make known, by usual and

customary means, the availability of the

PREVU diagnostic package. GE shall

inform any person making inquiry

regarding a possible purchase of the

PREVU diagnostic package that the

package is being sold pursuant to this

Final Judgment and provide that person

with a copy of this Final Judgment. GE

shall offer to furnish to all bona fide

prospective purchasers, subject to

confidentiality assurances, all

information and documents relating to

the PREVU diagnostic package

customarily provided in a due diligence

process—including access to personnel,

inspection of the assets, and any

financial, operational or other

documents relevant to the sale—except

such information or documents subject

to the attorney-client or work-product

privileges. GE shall make available such

information to the United States at the

same time that such information is

made available to any other person.

(D) GE shall provide to the purchaser

of the PREVU diagnostic package and to

the United States information relating to

the personnel who have the primary

responsibility for the development,

maintenance, and distribution of the

PREVU diagnostic package, and training

thereon, to enable the purchaser to make

offers of employment. GE will not

interfere with any negotiations by the

purchaser to employ any such person.

(E) If a sale is accomplished under

this Final Judgment, GE may retain a

non-exclusive, nonassignable license

(without right to sublicense) to use the

PREVU diagnostic package solely:

(1) In connection with fulfilling

InnoServ service contracts in effect on

the date of GE’s acquisition of InnoServ;

(2) In connection with fulfilling any

service contracts resulting from written

proposals made by InnoServ to

prospective customers that are

outstanding on the date of GE’s

acquisition of InnoServ, provided that

any such contract is entered into within

90 days of GE’s acquisition of InnoServ;

and

(3) in connection with fulfilling any

renewals of any service contracts

described in Section IV(E)(1) or (2), so

long as the renewal was entered into

prior to any sale of the PREVU

diagnostic package.

Such a license pursuant to Section

IV(E)(1), (2), and (3) shall expire, for

each such contract, on the expiration

date of the contract in effect on the date

that the PREVU diagnostic package is

sold.

(F) Nothing in this Final Judgment

shall prevent the buyer of the PREVU

diagnostic package from granting GE

any non-exclusive rights to use the

PREVU diagnostic package in addition

to those rights listed in Section IV(E),

but GE shall not make any such grant of

additional rights a condition of the sale.

V Appointment of Trustee

(A) If GE has not sold the PREVU

diagnostic package within the time

period specified in Section IV(A), GE

shall notify the United States of that fact

in writing. Upon application of the

United States, the Court shall appoint a

trustee selected by the United States to

effect the sale of the PREVU diagnostic

package. Until such time as a trustee has

been appointed, GE shall continue to
39896 Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 / Notices

use its best efforts to accomplish the

sale of the PREVU diagnostic package.

(B)After the appointment of a trustee

becomes effective, only the trustee shall

have the right to sell the PREVU

diagnostic package. The trustee shall

have the power and authority to

accomplish a sale at the earliest possible

time to a purchaser acceptable to the

United States at the best price and on

the best terms as are then obtainable

upon the reasonable effort by the

trustee, subject to the provisions of

Sections IV, V, and VI of this Final

Judgment, and shall have such other

powers respecting the PREVU

diagnostic package as this Court deems

appropriate. Subject to Section V(D) of

this Final Judgment, the trustee may

hire at the cost and expense of GE any

investment bankers, attorneys, or other

agents, who shall be solely accountable

to the trustee, reasonably necessary in

the trustee’s judgment to assist in the

sale.

(C) GE shall not object to a sale by the

trustee on any grounds other than the

trustee’s malfeasance. Any such

objections by GE must be conveyed in

writing to the United States and the

trustee within ten calendar days after

the trustee has provided the notice

required under Section VI.

(D) The trustee shall serve at the cost

and expense of GE, on such terms and

conditions as the Court may prescribe,

and shall account for all monies derived

from the sale of the assets sold by the

trustee and all costs and expenses so

incurred. After approval by the Court of

the trustee’s accounting, including fees

for this services and those of any

professionals and agents retained by the

trustee, any remaining money shall be

paid to GE, or GE shall pay to the trustee

any expenses not covered by the

proceeds of the sale, and the trust shall

then be terminated. The compensation

and expenses of the trustee and any

professionals and agents retained by the

trustee shall be reasonable in light of the

value of the PREVU diagnostic package

and based on a fee arrangement

providing the trustee with an incentive

based on the price and terms of the sale

and the speed with which it is

accomplished.

(E) GE shall use its best efforts to

assist the trustee in accomplishing a

sale. The trustee and any consultants,

accountants, attorneys, and other

persons retained by the trustee shall

have full and complete access to the

personnel, books, records, and facilities

relating to the assets to be sold, and GE

shall develop financial and other

information relevant to such assets

customarily provided in a due diligence

process as the trustee may reasonably

request, subject to reasonable protection

for trade secret or other confidential

research, development, or commercial

information. GE shall take not action to

interfere with or to impede the trustee’s

accomplishment of a sale. GE shall

permit bona fide prospective purchasers

of the assets to have reasonable access

to personnel and to make such

inspection of any and all financial,

operational, or other documents and

other information as may be relevant to

a sale under this Final Judgment.

(F) After its appointment, the trustee,

shall file monthly reports with the

parties and the Court setting forth the

trustee’s efforts to accomplish a sale or

license (as provided in V(G)–(H)) under

this Final Judgment. To the extent such

reports contain information that the

trustee deems confidential, such reports

shall not be filed in the public docket

of the Court. Such reports shall include

the name, address, and telephone

number of each person who, during the

preceding month, made an offer to

acquire or license, expressed an interest

in acquiring or licensing, entered into

negotiations to acquire or license, or

was contacted or made an inquiry about

acquiring or licensing, and interest in

the PREVU diagnostic package, and

shall describe in detail each contact

with any such person. The trustee shall

maintain full records of all efforts made

to sell or license the PREVU diagnostic

package.

(G) If the trustee has not

accomplished a sale of the PREVU

diagnostic package within six months

after its appointment, the trustee shall

promptly file with the Court a report

setting forth (i) the trustee’s efforts to

accomplish a sale, (ii) the reasons, in the

trustee’s judgment, why a sale has not

been accomplished, and (iii) the

trustee’s recommendations. To the

extent such reports contain information

that the trustee deems confidential, such

reports shall not be filed in the public

docket of the Court. The trustee shall at

the same time furnish such report to the

parties, who shall each have the right to

be heard and to make additional

recommendations consistent with the

purpose of the trust. The Court shall

thereafter enter an order either:

(1) Extending the trust and the term

of the trustee’s appointment to sell the

PREVU diagnostic package by a period

that is reasonable in light of the trustee’s

earlier efforts and any additional efforts

that the Court believes can reasonably

be made to sell the PREVU diagnostic

package; or

(2) Directing the trustee to proceed

with licensing the PREVU diagnostic

package pursuant to Section V(H).

(H) Upon entry of an order by the

Court pursuant to Section V(G)(2)

directing the trustee to license the

PREVU diagnostic package, or upon the

expiration of any extended period for

the sale of the PREVU diagnostic

package ordered by the Court pursuant

to Section V(G)(1), the trustee shall, for

one year, offer perpetual, fully paid-up

(at a reasonable royalty rate), nonexclusive licenses to the PREVU

diagnostic package to any interested

service providers of diagnostic imaging

equipment. The rights granted to such

licensees shall include the perpetual

right to use, copy, and sublicense the

PREVU diagnostic package and to make

and copyright derivative works from it.

The trustee shall advertise the

availability of such non-exclusive

licenses in at least one national general

circulation newspaper and one medical

diagnostic imaging equipment trade

publication, which publications shall be

approved by the United States. GE shall

pay for all expenses reasonably incurred

by the trustee in its attempts to license

the PREVU diagnostic package under

this section. The trustee shall promptly

notify the United States and GE of any

persons who acquire a license under

this section.

(I) If the trustee sells the PREVU

diagnostic package, the trust will

terminate when the trustee has fulfilled

all its duties regarding the sale.

Otherwise, at the end of the one-year

licensing period, the trustee shall

promptly file with the Court a report

setting forth: (i) the trustee’s efforts to

license the PREVU diagnostic package,

(ii) the name, address, and telephone

number of each person who acquired a

license, made an offer to license,

expressed an interest in licensing,

entered into negotiations to license, or

was contacted or made an inquiry about

licensing, any interest in the PREVU

diagnostic package, and shall describe

in detail each contact with any such

person, and (iii) the trustee’s

recommendations about whether the

trustee’s continuing to license the

PREVU diagnostic package would serve

the public interest. To the extent such

reports contain information that the

trustee deems confidential, such reports

shall not be filed in the public docket

of the Court. The trustee shall at the

same time furnish such report to the

parties, who shall each have the right to

be heard and to make additional

recommendations consistent with the

purpose of the trust. The Court shall

thereafter enter an order either:

(1) Extending the trust and the term

of the trustee’s appointment to license

the PREVU diagnostic package by a

period that is reasonable in light of the
Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 / Notices 39897

trustee’s earlier efforts and any

additional benefits to the public interest

that the Court believes would result

from continuing attempts to license the

PREVU diagnostic package; or

(2) Terminating the trust.

VI. Notification

(A) Within two business days

following execution of a definitive

agreement, contingent upon compliance

with the terms of this Final Judgment,

to effect any proposed sale pursuant to

Section IV or V of this Final Judgment,

GE or the trustee, whichever is then

responsible for effecting the sale

required herein, shall notify the United

States of the proposed sale. If the trustee

is responsible, it shall similarly notify

GE. The notice shall set forth the details

of the proposed transaction and list the

name, address, and telephone number of

each person not previously identified

who offered or expressed an interest in

or desire to acquire any ownership

interest in the PREVU diagnostic

package, together with full details of the

same.

(B) Within 15 calendar days of receipt

by the United States of such notice, the

United States may request from GE, the

proposed purchaser or purchasers, any

other third party, or the trustee (if

applicable) additional information

concerning the proposed sale and the

proposed purchaser or purchasers, and

any other potential purchaser. GE and

the trustee shall furnish any additional

information requested from them within

15 calendar days of the receipt of the

request, unless the parties shall

otherwise agree.

(C) Within 30 calendar days after

receipt of the notice or within 20

calendar days after the United States has

been provided the additional

information requested from GE, the

proposed purchaser or purchasers, any

third party, and the trustee, whichever

is later, the United States shall provide

written notice to GE and the trustee, if

there is one, stating whether or not it

objects to the proposed sale. If the

United States provides written notice

that it does not object, then the sale may

be consummated, subject only to GE’s

limited right to object to the sale under

Section V(C) of this Final Judgment.

Absent written notice that the United

States does not object to the proposed

purchaser or upon objection by the

United States, a sale proposed under

Section IV or Section V shall not be

consummated. Upon objection by GE

under Section V(C), a sale proposed

under Section V shall not be

consummated unless approved by the

Court.

VII. Financing

GE shall not finance all or any part of

any purchase made pursuant to Section

IV or V of this Final Judgment.

VIII. Preservation of Assets

Until any sale under this Final

Judgment has been accomplished:

(A) GE shall preserve the PREVU

diagnostic package in its existing

condition and shall take no action with

respect to the PREVU diagnostic

package to cause any deterioration in

the value of, or to deter any person from

buying or licensing, the PREVU

diagnostic package.

(B) GE shall continue to license, on

reasonable terms, the PREVU diagnostic

package to the persons who are

licensees on the date of GE’s acquisition

of InnoServ.

(C) GE shall not, except as part of a

divestiture approved by the United

States, sell any part of the PREVU

diagnostic package.

(D) GE shall appoint a person or

persons to oversee the PREVU

diagnostic package, and who will be

responsible for GE’s compliance with

this section.

IX Affidavits

(A) Within 20 calendar days of the

filing of the Complaint in this action,

and every 30 calendar days thereafter

until the sale has been completed under

Section IV or V, GE shall deliver to the

United States an affidavit as to the fact

and manner of its compliance with

Section IV or V of this Final Judgment.

Each such affidavit shall include the

name, address, and telephone number of

each person who, during the preceding

30 days, made an offer to acquire,

expressed an interest in acquiring,

entered into negotiations to acquire, or

was contacted or made an inquiry about

acquiring, any interest in the PREVU

diagnostic package, and shall describe

in detail each contact with any such

person during that period. Each such

affidavit shall also include a description

of the efforts GE has taken to solicit a

purchaser for the PREVU diagnostic

package and to provide required

information to prospective purchasers

including the limitations, if any, on

such information. Assuming the

information set forth in the affidavit is

true and complete, any objection by the

United States to information provided

by GE, including limitations on

information, shall be made within

fourteen (14) days of receipt of such

affidavit.

(B) Within 20 calendar days of the

filing of the Complaint in this action, GE

shall deliver to the United States an

affidavit that describes in reasonable

detail all actions GE has taken and all

steps GE has implemented on an

ongoing basis to comply with Section

VIII of this Final Judgment. GE shall

deliver to the United States an affidavit

describing any changes to the efforts

and actions outlined in GE’s earlier

affidavit(s) filed pursuant to this section

within 15 calendar days after the change

is implemented.

(C) Until one year after a sale has been

completed or, if a sale is not completed,

one year after the trust under Section V

is terminated, GE shall preserve all

records of all efforts made to preserve,

sell, and license the PREVU diagnostic

package.

X Compliance Inspection

(A) For the purposes of determining

or securing compliance with this Final

Judgment, and subject to any legally

recognized privilege, from time to time

duly authorized representatives of the

United States Department of Justice,

including consultants and other persons

retained by the United States, shall,

upon written request of the Assistant

Attorney General in charge of the

Antitrust Division, and on reasonable

notice to GE, be permitted:

(1) Access during GE’s office hours to

inspect and copy all books, ledgers,

accounts, correspondence, memoranda

and other records and documents in the

possession or control of GE, which may

have counsel present, relating to any

matters contained in this Final

Judgment; and

(2) To interview, either informally or

on the record, GE’s officers, employees,

or agents, who may have counsel

present, regarding such matters. The

interviews shall be subject to GE’s

reasonable convenience and without

restraint or interference by GE.

(B) Upon the written request of the

Assistant Attorney General in charge of

the Antitrust Division, GE shall submit

such written reports, under oath if

requested, relating to any of the matters

contained in this Final Judgment as may

be requested.

(C) No information or documents

obtained by the means provided in this

section or Section IX shall be divulged

by the United States to any person other

than a duly-authorized representative of

the executive branch of the United

States, except in the course of legal

proceedings to which the United States

is a party (including grand jury

proceedings), or for the purpose of

securing compliance with this Final

Judgment, or as otherwise required by

law.

(D) If at the time information or

documents are furnished by GE to the
39898 Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 / Notices

United States, GE represents and

identifies in writing the material in any

such information or documents to

which a claim of protection may be

asserted under Rule 26(c)(7) of the

Federal Rules of Civil Procedure, and

GE marks each pertinent page of such

material, ‘‘Subject to claim of protection

under Rule 26(c)(7) of the Federal Rules

of Civil Procedure,’’ then 10 calendar

days notice shall be given by the United

States to GE prior to divulging such

material in any legal proceeding (other

than a grand jury proceeding) to which

GE is not a party.

XI Retention of Jurisdiction

This Court retains jurisdiction to

enable any party to this Final Judgment

to apply to this Court at any time for

further orders and directions as may be

necessary or appropriate to carry out or

construe this Final Judgment, to modify

any of its provisions, to enforce

compliance, and to punish violations of

its provisions.

Competitive Impact Statement

Plaintiff, the United States of

America, pursuant to Section 2(b) of the

Antitrust Procedures and Penalties Act

(‘‘APPA’’), 15 U.S.C. 16(b)–(h), files this

Competitive Impact Statement relating

to the proposed Final Judgment

submitted for entry in this civil antitrust

proceeding.

I. Nature and Purpose of the Proceeding

The United States filed a civil

antitrust Complaint on July 14, 1998,

alleging that General Electric Company’s

(‘‘GE’’) proposed acquisition of InnoServ

Technologies, Inc. (‘‘InnoServ’’) would

violate Section 7 of the Clayton Act, 15

U.S.C. 18. The Complaint alleges that

GE and InnoServ compete in servicing

individual pieces of GE medical imaging

equipment and in the sale of

comprehensive multi-vendor or assetmanagement services (‘‘multi-vendor

service’’). Multi-vendor service involves

contracting to service all or a significant

portion of a hospital’s medical

equipment.

The proposed combination would

substantially lessen competition and

tend to create a monopoly in the

markets for servicing certain models of

GE imaging equipment, especially GE

CT scanners and magnetic resonance

imagers (MRIs), and in multi-Vendor

service. InnoServ is an effective

competitor of GE in part because

InnoServ is one of very few companies

that has developed proprietary

diagnostic software for servicing certain

models of GE imaging equipment. The

prayer for relief in the Complaint seeks:

(a) an adjudication that the proposed

merger would violate Section 7 of the

Clayton Act; (b) a permanent injunction

preventing the transaction’s

consummation; (c) plaintiff’s costs of

this action; and (d) such other relief as

is just and proper.

Prior to filing this suit, the parties

reached a proposed settlement that

permits GE to acquire InnoServ, yet

preserves competition in the markets in

which the transaction would raise

significant competitive concerns. Along

with the Complaint, the parties filed a

Stipulation and proposed Final

Judgment setting out the settlement

terms.

The proposed Final Judgment orders

GE to divest InnoServ’s proprietary

diagnostic service software and related

materials, which are collectively known

as the PREVU diagnostic package, to an

acquirer acceptable to the United States.

Unless the United States agrees to a time

extension, GE must complete the

divestiture within 180 calendar days

after the filing of the Complaint or five

days after notice of the entry of this

Final Judgment by the court, whichever

is later.

If GE does not complete the

divestiture within the divestiture

period, the Court, upon application of

the United States, is to appoint a trustee

selected by the United States to sell the

PREVU diagnostic package. The

proposed Final Judgment also requires

that, until the divestiture mandated by

the Final Judgment has been

accomplished, GE must continue to

license, on reasonable terms, the PREVU

diagnostic package to persons who were

PREVU licensees on the date GE

acquires InnoServ.

If the trustee has not sold the PREVU

diagnostic package within six months of

its appointment, it will, for one year,

license the package at a reasonable

royalty rate to any service provider

unless the Court grants the trustee

additional time to complete a sale. The

licenses will be perpetual, fully paid-up,

and non-exclusive and include the

perpetual right to use, copy, and

sublicense the package and to make and

copyright derivative works.

The plaintiff and defendants have

stipulated that the court may enter the

proposed Final Judgment after

compliance with the APPA. Entry of the

proposed Final Judgment would

terminate this action, except that the

Court would retain jurisdiction to

construe, modify, or enforce provisions

of the Final Judgment and to punish

violations thereof.

II. Description of the Events Giving Rise

to the Alleged Violation

A. The Defendants and the Proposed

Transaction

GE is a New York corporation

headquartered in Fairfield, Connecticut.

GE is a diversified technology,

manufacturing, and services company.

In 1997, GE’s total revenues exceeded

$90 billion. Its wholly owned subsidiary

General Electric Medical Systems

(‘‘GEMS’’), located in Waukesha,

Wisconsin, manufactures medicalimaging equipment such as CT

scanners. MRIs, X-ray units, and

nuclear-medicine cameras. GEMS is the

leading servicer of GE imaging

equipment in the United States. GEMS

also services imaging equipment

manufactured by other companies

through GE HealthCare Services, GE’s

wholly owned multi-vendor and assetmanagement service group.

InnoServ, a California corporation

headquartered in Arlington, Texas, is

one of the nation’s largest independent

service organizations (‘‘ISOs’’). InnoServ

services individual pieces of medical

equipment and provides comprehensive

asset management, multi-vendor

maintenance and repair, and other

specialized services for radiology,

cardiology, biomedical, and laboratory

equipment. For the fiscal year ending

April 30, 1997, InnoServ’s service

revenues exceeded $37 million. It has

struggled financially for the past two

years, however, losing over $1.5 million

for the nine months ending January 31,

1998. In March 1998, InnoServ publicly

expressed concern about its ability to

continue to meet its working capital

requirements. For some time, InnoServ

has been seeking potential buyers of the

company, but only GE has made such an

offer.

On May 19, 1998, the defendants

signed a merger agreement providing

that GE would acquire InnoServ’s

common stock for a purchase price of

$16 million. The United States filed this

suit because the proposed merger

threatened to decrease competition.

B. Anticompetitive Consequences of the

Proposed Transaction

Competition between original

equipment manufacturers such as GE

and ISOs such as InnoServ has benefited

hospitals and other owners of medical

imaging equipment by driving down the

cost of servicing their equipment. GE

and InnoServ have been competitors in

the market for servicing certain models

of GE imaging equipment on a discrete

basis and in the multi-vendor service

market.
Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 / Notices 39899

InnoServ is one of the few

competitors of GE that has developed

proprietary diagnostic software for

servicing certain models of GE imaging

equipment. Advanced diagnostic

software enables a service engineer to

more quickly service and maintain

imaging equipment. GE also has

developed and uses its own advanced

diagnostic software for servicing

imaging equipment.

GE’s proposed acquisition of InnoServ

would eliminate InnoServ as an

independent competitor in the market

for servicing certain models of GE

imaging equipment on a discrete basis

and in the multi-vendor service market.

It would also give GE exclusive control

over InnoServ’s advanced service

software. GE does not license its own

advanced diagnostic software to

competing service providers and likely

would not license PREVU to its service

competitors. Because InnoServ is an

experienced service provider with

access to advanced diagnostic software,

GE’s proposed acquisition of InnoServ

would decrease competition and likely

increase prices for imaging equipment

service. Given InnoServ’s financial

difficulties, however, it is not clear

whether it can continue as an

independent competitor in these

markets.

III. Explanation of the Proposed Final

Judgment

The proposed Final Judgment would

promote additional competition in

servicing certain models of GE imaging

equipment and in multi-vendor service

by requiring GE to divest InnoServ’s

proprietary diagnostic service software

and related materials to an acquirer

acceptable to the United States. These

service materials, which are collectively

known as the PREVU diagnostic

package, give InnoServ a competitive

advantage in servicing certain models of

imaging equipment and in multi-vendor

service. Unless the United States agrees

to a time extension, GE must complete

the divestiture within 180 calendar days

after the filing of the Complaint in this

matter or five days after notice of the

entry of this Final Judgment by the

Court, whichever is later.

If GE does not complete the

divestiture within the divestiture

period, the Court, upon application of

the United States, is to appoint a trustee

selected by the United States to sell the

assets. The proposed Final Judgment

also requires that, until the divestiture

mandated by the Final Judgment has

been accomplished, GE must continue

to license, on reasonable terms, the

PREVU diagnostic package to persons

who were PREVU licensees on the date

GE acquires InnoServ.

If the trustee has not accomplished

the divestiture within six months after

its appointment, the trustee shall

promptly file with the Court a report

setting forth (1) the trustee’s efforts to

accomplish the sale, (2) the reasons, in

the trustee’s judgment, why the sale has

not been accomplished, and (3) the

trustee’s recommendations. At the same

time, the trustee will furnish such report

to the plaintiff and defendants, who will

each have the right to be heard and to

make additional recommendations.

The Court will then either give the

trustee additional time to accomplish a

sale, depending on the trustee’s earlier

efforts and any additional efforts that

the Court believes can reasonably be

made to the accomplish the sale, or

direct the trustee, for one year, to

license the PREVU diagnostic package at

a reasonable royalty rate to any service

provider. The licenses will be perpetual,

fully paid-up, and non-exclusive and

include the perpetual right to use, copy,

and sublicense the package and to make

and copyright derivative works.

At the end of the one-year licensing

period, the trustee shall promptly file

with the Court a report setting forth: (1)

the trustee’s efforts to license the

PREVU diagnostic package and (2) the

trustee’s recommendations as to

whether the trustee’s continuing to

license the PREVU diagnostic package

would serve the public interest. The

trustee shall at the same time furnish

such report to the parties, who shall

each have the right to be heard and to

make additional recommendations. The

Court will then either: (1) have the

trustee continue to license the PREVU

diagnostic package for a period that is

reasonable in light of the trustee’s

earlier efforts and any additional

benefits to the public interest that

would result from continuing attempts

to license the package, or (2) terminate

the trust.

If a trustee is appointed, the proposed

Final Judgment provides that GE will

pay all reasonable costs and expenses of

the trustee and any professionals and

agents retained by the trustee. After

appointment, the trustee will file

monthly reports with the parties and the

Court, setting forth the trustee’s efforts

to divest or license the PREVU

diagnostic package as ordered under the

proposed Final Judgment.

The divestiture of the PREVU

diagnostic package will allow one or

more third parties to use the software,

which in turn will enable them to

service more efficiently certain models

of imaging equipment and better

compete in the markets for servicing

individual pieces of imaging equipment

and providing multi-vendor service. In

addition to using the package in its

service business, a buyer of PREVU

could resell or license PREVU to other

parties. Similarly, PREVU licensees

could also use the package for servicing

imaging equipment and/or sublicense

PREVU to other parties. Both a buyer

and licensees would be free to make and

copyright derivative works. The ability

to improve upon PREVU will encourage

investment in developing advanced

service software, which would further

improve an entity’s ability to compete

with GE.

In conjunction with this settlement,

GE has also agreed to consent to all of

the relief that the Government was

seeking in another case, United States v.

General Electric Company, No. CV–96–

121–M–CCL (D. Mont. Filed Aug. 1,

1996) (hereinafter ‘‘Montana case’’). The

settlement of the Montana case should

help to alleviate some of the competitive

concerns raised by this transaction, by

eliminating agreements that prevented

numerous hospitals around the country

from competing with GE in some of the

markets affected by this transaction. The

United States considered whether

obtaining full relief in the Montana case,

by itself, would be a sufficient remedy

for this case, abut concluded that the

Montana settlement would not fully

address the competitive problems raised

by the InnoServ transaction. The United

States therefore required GE to divest

PREVU in addition to settling the

Montana litigation. The United States

evaluated the merits of the settlement

proposals in each case independently,

concluding that the proposed settlement

of this case is in the public interest for

the reasons stated herein, and that the

proposed settlement of the Montana

case is in the public interest for reasons

stated in the Competitive Impact

Statement filed in that case today.

IV. Remedies Available to Potential

Private Litigants

Section 4 of the Clayton Act, 15

U.S.C. 15, provides that any person who

has been injured as a result of conduct

prohibited by the antitrust laws may

bring suit in federal court to recover

three times the damages that the person

has suffered, as well as costs and

reasonable attorneys’ fees. Entry of the

proposed Final Judgment will neither

impair nor assist the bringing of any

private antitrust damage action. Under

the provisions of Section 5(a) of the

Clayton Act, 15 U.S.C. 16(a), the

proposed Final Judgment has no prima

facie effect in any subsequent private

lawsuit that may be brought against

defendants.
39900 Federal Register / Vol. 63, No. 142 / Friday, July 24, 1998 / Notices

1 15 U.S.C. 16(e).

2See United States v. Microsoft, 56 F.3d 1448,

1461–62 (D.C. Cir. 1995).

3 119 Cong. Rec. 24598 (1973). See United States

v. Gillette Co., 406 F. Supp. 713, 715 (D. Mass.

1975). A ‘‘public interest’’ determination can be

made properly on the basis of the Competitive

Impact Statement and Response to Comments filed

pursuant to the APPA. Although the APPA

authorizes the use of additional procedures, 15

U.S.C. § 16(f), those procedures are discretionary. A

court need not invoke any of them unless it believes

that the comments have raised significant issues

and that further proceedings would aid the court in

resolving those issues. See H.R. Rep. 93–1463, 93rd

Cong., 2d Sess. 8–9 (1974), reprinted in

U.S.C.C.A.N. 6535, 6538.

4United States v. Mid-America Dairymen, Inc.,

1977–1 Trade Cas. ¶ 61,508, at 71,980 (W.D. Mo.

1977).

5United States v. BNS, Inc., 858 F.2d 456, 462

(9th Cir. 1988), citing United States v. Bechtel

Corp., 648 F.2d 660, 666 (9th Cir. 1981); see also

Microsoft, 56 F.3d at 1460–62.

6Bechtel, 648 F.2d at 666; see BNS, 858 F.2d at

463; United States v. National Broadcasting Co.,

449 F. Supp. 1127, 1143 (C.D. Cal. 1978); Gillette,

406 F. Supp. at 716. See also Microsoft, 56 F.3d at

1461 (whether ‘‘the remedies [obtained in the

decree are] so inconsonant with the allegations

charged as to fall outside of the ‘reaches of the

public interest’ ’’) (citations omitted).

7United States v. American Tel. and Tel. Co., 552

F. Supp. 131, 151 (D.D.C. 1982), aff’d. sub nom.

Maryland v. United States, 460 U.S. 1001 (1983),

quoting Gillette Co., 406 F. Supp. at 716 (citations

omitted); United States v. Alcan Aluminum, Ltd.,

605 F. Supp. 619, 622 (W.D. Ky. 1985).

V. Procedures Available for

Modification of the Proposed Final

Judgment

The parties have stipulated that the

Court may enter the proposed Final

Judgment after compliance with the

APPA, provided that the United States

has not withdrawn its consent. The

APPA conditions that entry upon the

Court’s prior determination that the

proposed Final Judgment is in the

public interest.

The APPA provides a period of at

least sixty (60) days preceding the

effective date of the proposed Final

Judgment within which any person may

submit to the United States written

comments regarding the proposed Final

Judgment. Any person who wishes to

comment should do so within sixty (60)

days of the date of publication of this

Competitive Impact Statement in the

Federal Register. The United States will

give all comments due consideration

and respond to each of them. The

United States remains free to withdraw

its consent to the proposed Final

Judgment at any time prior to entry. The

comments and responses will be filed

with the Court and published in the

Federal Register.

Written comments should be

submitted to: Mary Jean Moltenbrey,

Chief, Civil Task Force, Antitrust

Division, United States Department of

Justice, 325 7th Street, N.W., Suite 300,

Washington, DC 20530.

The proposed Final Judgment

provides that the Court retains

jurisdiction over this action and that the

parties may apply to the Court for any

order necessary or appropriate for the

modification, interpretation, or

enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final

Judgment

The United States considered, as an

alternative to the proposed Final

Judgment, a full trial on the merits of its

Complaint to enjoin GE’s acquisition of

InnoServ. The United States is satisfied,

however, that the divestiture of the

PREVU diagnostic package will promote

competition in the relevant markets,

particularly given that InnoServ’s poor

financial condition threatens its ability

to continue operations. Incurring the

substantial costs and uncertainty of a

full trial on the merits of the Complaint

is therefore unnecessary.

VII. Standard of Review Under the

APPA for Proposed Final Judgment

The APPA requires that proposed

consent judgments in antitrust cases

brought by the United States be subject

to a sixty (60) day comment period, after

which the Court shall determine

whether entry of the proposed Final

Judgment ‘‘is in the public interest.’’ In

making that determination, the Court

may consider:

(1) The competitive impact of such

judgment, including termination of alleged

violations, provisions for enforcement and

modification, duration or relief sought,

anticipated effects of alternative remedies

actually considered, and any other

considerations bearing upon the adequacy of

such judgment;

(2) The impact of entry of such judgment

upon the public generally and individuals

alleging specific injury from the violations

set forth in the complaint including

consideration of the public benefit, if any, to

be derived from a determination of the issues

at trial.1

The United States Court of Appeals

for the D.C. Circuit has held that this

statute permits a court to consider,

among other things, the relationship

between the remedy secured and the

specific allegations set forth in the

government’s complaint, whether the

decree is sufficiently clear, whether

enforcement mechanisms are sufficient,

and whether the decree may positively

harm third parties.2 In conducting this

inquiry, ‘‘[t]he Court is nowhere

compelled to go to trial or to engage in

extended proceedings which might have

the effect of vitiating the benefits of

prompt and less costly settlement

through the consent decree process.’’ 3

Rather,

[A]bsent a showing of corrupt failure of the

government to discharge its duty, the Court,

in making its public interest finding, should

* * * carefully consider the explanations of

the government in the competitive impact

statement and its responses to comments in

order to determine whether those

explanations are reasonable under the

circumstances.4

Accordingly, with respect to the

adequacy of the relief secured by the

decree, a court should not engage ‘‘in an

unrestricted evaluation of what relief

would best serve the public.’’ 5

Precedent requires that:

The balancing of competing social and

political interests affected by a proposed

antitrust consent decree must be left, in the

first instance, to the discretion of the

Attorney General. [citations omitted] The

court’s role in protecting the public interest

is one of insuring that the government has

not breached its duty to the public in

consenting to the decree. The court is

required to determine not whether a

particular decree is the one that will best

serve society, but whether the settlement is

‘‘within the reaches of the public interest.’’

[citations omitted] More elaborate

requirements might undermine the

effectiveness of antitrust enforcement by

consent decree.6

The proposed Final Judgment,

therefore, should not be reviewed under

a standard of whether it is certain to

eliminate every anticompetitive effect of

a particular practice or whether it

mandates certainty of free competition

in the future. Court approval of a final

judgment requires a standard more

flexible and less strict than the standard

required for a finding of liability. ‘‘[A]

proposed decree must be approved even

if it falls short of the remedy the court

would impose of its own, as long as it

falls within the range of acceptability or

is ‘within the reaches of public

interest.’ ’’ 7

VIII. Determinative Documents

There are not determinative materials

or documents within the meaning of the

APPA that were considered by the

plaintiff in formulating the proposed

Final Judgment.

Dated: July 14, 1998.

Respectfully submitted,

Jon B. Jacobs,

Fred E. Haynes,

Joan H. Hogan,

Peter J. Mucchetti,

Attorneys for the United States, Antitrust

Division, United States Department of Justice,

325 Seventh Street, N.W., Suite 300,

Washington, DC 20539, (202) 514–5012.

[FR Doc. 98–19857 Filed 7–23–98; 8:45 am]

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