Source: http://hyperlaw.com/topix/westmerger/hlambr.htm
Timestamp: 2019-04-25 07:45:23+00:00

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The Government has proposed a settlement of the claims it asserted in the June 1996 antitrust complaint. If the consent decree is allowed, Defendants will avoid a trial, avoid disclosure of documents and avoid an examination of the facts.
b. the parties would have to propose modifications that would then meet with the approval of the Court.
2. Require substantive changes—or changes to provide a level of clarity presently absent from the proposed decree. (For example, the proposed license agreement either permits copying of text of court opinions from West case reporters, or it does not. The proposed license agreement should, at the very least, be clear about this issue).
3. Delay approving the consent decree until the Government meets its Tunney Act obligations. (As described in HyperLaw's October 10, 1996 letter to Mr. Conrath, the Tunney Act is a "sunshine law" and, in addition, serves to establish a level of accountability for the Government's actions. If the Government wishes to promote a license agreement which for many older opinions will provide licensees with the meaningless right to star-paginate blank pages, then it should step up and articulate this position; and then attempt to defend its position before this Court and before the public. In the future, the proponents of this position should not be able to excuse their conduct—accountability for the Government's decisions must be assigned.) The Court has already demonstrated, by shedding a little light on the "no-contest provision" of the license agreement, that there could be immediate 'evaporation' of this dubious provision. Similarly, shedding light on other provisions of the consent decree, by sheer embarrassment alone, may well cause the parties to offer up other previously non-negotiable provisions.
Finally, HyperLaw notes the irony of the fact that both the DOJ and the defendants take the position that the proposed license agreement (which is part of the proposed consent decree) should not be scrutinized by the Court—because, they maintain, it really does not relate to the complaint, and it was something that the Government could have never obtained in litigation...clearly Catch-22.
(1) While negotiating the consent decree, the Government was insisting upon divestitures of companies and products which were not acceptable to Thomson and West (This is the import of contemporaneous newspaper articles6, although only an examination of the Government and the defendants would permit this to be proven directly.) The voluminous comments from varied sources have criticized the inadequacies of the divestitures, as compared to the allegations of the complaint.7 The Government further refuses to share the most basic information regarding the divestitures, including the HHI of both divested and non-divested products, as well as the breakdown on sales of the vaunted 51 divested products. If the divested products are inadequate, then one must look elsewhere for balancing relief—presumably this was the intended purpose of the proposed license. Clearly there is linkage between the limited and ineffectual divestitures and the competitive relief that could be provided by an effective license agreement.
We disagree with TA's oft-repeated conclusion that West's control over access to some judicial opinions and statutes is a "consequence" of the merger of Thomson and West. Mem. at 5. Simply, whatever role West has relating to access to judicial opinions is a pre-condition to the merger and not caused by it.
See Plaintiffs' Opposition to Tax Analysts' Motion For Reconsideration Of Its Denial of Amicus Curiae Status, October 15, 1996, at 4. Matthew Bender correctly notes that the consequence of the merger is to extend the West-Lexis' copyright pool to the other major publisher, Thomson, to the exclusion of smaller publishers. The appended 1994 advertisement shows just the types of integrated products that Lawyers Cooperative Publishing offered, which will now tie into this pool.9 Anyone competing with the products shown in that advertisement (and the unfortunate purchasers of the divested products) now must face the West copyright factor. The Government is not correct in its assertion that those objecting to the insufficiency of the consent decree seek to remedy preexisting anticompetitive effects.
(1) The plaintiffs interpret the proposed license to mean that a license must be issued for star pagination any set of cases selected by the licensee, even if West or any other person had previously selected a similar set of cases. (2) Defendants have stated to plaintiffs that they would not consider a CD-ROM product which included exactly the same cases included in a West print reporter to be an infringement. (3) Indeed, Matthew Bender has introduced such a product and we are informed defendants have not challenged it as a "selection" infringement. (4) Defendants would object to a print reporter which simply replicated a West print reporter ... (numeration of sentences added).
How has the Government responded to HyperLaw's clear objection? No response.
It is possible that in the future (in a closed, private arbitration in Minnesota) a competitor might try to introduce the entire record of this proceeding in an attempt to persuade the arbitrator that these vague assertions of the Government are somehow binding on West-Thomson. This will not be necessary if the license agreement itself can be read clearly. If anything, the Court, in its order relating to the consent decree, should provide the needed specificity.
Similarly, the agreement does not state what it does not cover (e.g., the text of the opinions). Once again, one could introduce the entire proceedings herein to a committee of Congress considering something akin to a database protection bill—to counter the expected Thomson-West argument that there was a compulsory license in effect. The easier solution is for the Court to mandate clarity now.
The Government was aware of the fact that the next largest legal publisher, Lexis, had entered into the secret 1988 cross-licensing agreements with West—agreements which created the copyright equivalent of a clandestine "patent pool"—giving Lexis access to the West citations and text to both case law and statutes, and (it appears) vice versa.10 It does not appear that the government understood the significance of this fact—and it may be too embarrassed to now step forward and comment on the state of the emperor's attire. The merger has the undeniable result of significantly expanding this copyright cartel to include the other large legal publisher, Thomson. The result is that, in the post-merger period, West, Thomson, and Lexis will be able to use the intellectual property pool to the exclusion of all other legal publishers. The cost of this to the public is staggering. It makes effective on-line legal research for poor and middle class litigants a joke—not to mention the effect of this cartel on new technologies such as CD-ROM and Internet.11 Well into the 21st Century the entire country will pay an override—nothing less that a monopoly tax to the very few who own the text of and citation to the case law prior to 1991.
The time is now, and the place is this Court. If these agreements and the industry control cannot be examined by Your Honor, the public will pay the monopoly tax long into the future—and an already highly anti-competitive industry will become virtually closed. This may indeed be the last opportunity to, at least, examine the facts—given the enormous political power amassed by this merger.
Exhibit 1 Opinion dated August 5, 1996, Matthew Bender & Company and HyperLaw v. West.
Exhibit 2 Excerpt from Docket Sheet, West Publishing Company v. Mead Data Central, Inc., 4-85-931, United States District Court, District of Minnesota.
Exhibit 3 Article, How West Was Won, American Lawyer, September, 1996.
HyperLaw Exhibit A HyperLaw Motion For Summary Judgment, Matthew Bender & Company Inc. and HyperLaw v. West Publishing Company.
HyperLaw Exhibit B- Letters, from HyperLaw to Attorney General Reno and Lawrence Fullerton dated September 26, 1996 re amicus brief.
HyperLaw Exhibit C Affidavit of Kendall F. Svengallis dated October 7, 1996.
HyperLaw Exhibit D Advertisement, "Only a select few can discuss the specifics of a case with each other", Lawyers Cooperative Publishing Advertisement, Law Technology Product News, September 1994.
HyperLaw Exhibit G Docket Sheet, West Publishing Company v. Mead Data Central, Inc., 4-85-931, United States District Court, District of Minnesota.
HyperLaw Exhibit H Docket Sheet, West Publishing Company v. Mead Corporation, Mead Data Central, Inc., Civ. 4-88-142, United States District Court, District of Minnesota.
HyperLaw Exhibit J Letter, dated October 10, 1996, from Carl J. Hartmann, counsel for HyperLaw, to Craig Conrath, Esq. re disclosure of documents.
HyperLaw Exhibit K Letter, dated March 13, 1995, from Carl J. Hartmann to Joseph Musilek, counsel for West, confirming, inter alia, that a copy of the 1988 settlement agreements were not in the possession of the Minnesota United States District Court supervising the settlement.
HyperLaw Exhibit L Draft Motion to Intervene in Minnesota United States District Court, re unsealing by HyperLaw describing facts surrounding the 1988 settlement agreements.
HyperLaw Exhibit M Letter Dated October 3, 1996 from Joel I. Klein, Deputy Assistant Attorney General to Alan D. Sugarman declining to file an amicus brief in Matthew Bender and HyperLaw v. West in support of HyperLaw's motion for a determination that West copyrights are not infringed when a competing publisher keys-in and publishes the text of court opinions from a West case reporter, but does not key-in the West headnotes and syllabi.
HyperLaw Exhibit N HyperLaw Comment Letters Filed Under the Tunney Act with United States Department of Justice, N-1 June 26, 1996 to Assistant Attorney General Anne Bingaman (not in comment letters filed by DOJ), N-2 June 26, 1996 to Craig Conrath, N-3 June 28, 1996 to Craig Conrath, N-4 September 3, 1996 to Craig Conrath.
I hereby certify that on October 15, 1996 I caused copies of HyperLaw Exhibits to its Amicus Curiae Brief to be served by Federal Express for delivery on October 16, 1996, and have confirmed that delivery upon the following.
I hereby certify that prior to 4:00 PM on October 16, 1996 I caused copies of HyperLaw's Amicus Curiae Brief to be sent by Facsimile upon the following, and have re-served the corrected version of the brief on all parties by facsimile on October 17, 1996.
 See Exhibit 15 to Lexis-Nexis' Memorandum in Support of Motion to Intervene, dated September 11, 1996.
 HyperLaw asks the Court to closely review HyperLaw Exhibit J, Letter Dated October 10, 1996, from Carl J. Hartmann, counsel for HyperLaw, to Craig Conrath, Esq. This letter presents a detailed analysis of the mandated procedural requirements.
 Several other parties have filed motions to participate as amicus curiae. One issue raised in these motions, which warrants serious consideration, is whether the Department of Justice can adequately represent the public interest where it is extremely involved with the parties, has litigated (for and against parties on some of these same issues) and where it has recently litigated to protect the putative rights of a party. The way in which the Government has dealt with the text issue is indicative of the same conflicts identified by Lexis in its antitrust complaints filed against West in 1976 and 1987. See paragraphs 38 et seq. of HyperLaw Exhibit E, and paragraph 25 of HyperLaw Exhibit F. Thus, DOJ's involvement in these issues with these parties goes back many years—it is not a regulatory relationship, it is a business relationship. The Department of Justice's refusal to fully respond to issues relating to the copyrightability of the text of court opinions in West case reports—and its position with regard to HyperLaw's motion for summary judgment on that issue—are further indication of this conflict. See HyperLaw Exhibit B and HyperLaw Exhibit M. Return to text.
 For a description the effect of the 1988 industry controlling documents, see HyperLaw Exhibit K, Letter Dated March 13, 1995 from Carl J. Hartmann to Joseph Musilek, counsel for West. These documents are discussed in more detail infra.
 HyperLaw will not further burden the record as to the Government's failure to respond to Comments. HyperLaw agrees with the Government's "urge[ing] the Court to verify any representation made by Plaintiffs concerning the public comments with the actual comments." See Page 5 of the Government's October 15, 1996 reply to the motion submitted by Tax Analysts.
 See John E. Morris, How West Was Won, American Lawyer, September 1996, at 73, attached as Exhibit 6 to Lexis-Nexis' Memorandum in Support of Motion to Intervene, dated September 11, 1996, and to Exhibit 3 to HyperLaw's Amicus Curiae Motion, dated September 12, 1996.
 See Affidavit of Kendall Svengallis dated October 7, 1996, attached hereto as HyperLaw Exhibit C.
By merging West's virtual monopoly position in enhanced primary law products with Thomson's capability in secondary law products, the merged Thomson/West entity will be able to use its market power in the enhanced primary law product markets to gain an unfair competitive advantage in the secondary law product markets. No longer will West have to develop its own secondary law products. Instead, Thomson/West will be able to marry West's primary law products that competitors with Thomson's secondary law product markets cannot match without the right to use West's star pagination. The newly achieved strength of Thomson/West in the secondary law product markets will greatly increase the anitcompetitive effect of continued attempts to enforce West's star pagination copyright.
The Government, in its Index of Public Comments and Response, attached as an Exhibit to its Response, claims that it responded to these comments in section II.D.2. This section begins on page 35 of the Government's Response. On page 37 the Government meekly states: "However, Matthew Bender does not explain how the star pagination license leaves it worse off." That is a facile response: Matthew Bender explained that the merger, in extending star pagination to Thomson products, placed Matthew Bender at a competitive disadvantage. The Government just ignored this crucial point. The Government could have referred to Paragraph 43 of its own complaint.
 HyperLaw Exhibit D, "Only a select few can discuss the specifics of a case with each other", Lawyers Cooperative Publishing Advertisement, Law Technology Product News, September 1994.
 HyperLaw had raised the issue of the 1988 secret agreements in its June 26, 1996 comment letter to DOJ (HyperLaw Exhibit N-2). The Government did not provide an answer to these issues in its Response. The 1988 agreements were raised again in paragraphs 9 et seq. of its Amicus Curiae Motion of September 12, 1996. The Government did not respond at all to HyperLaw's Motion. This is another example of the Government just ignoring what it cannot answer.
 Predictably, Lexis-Nexis' argument and motions have focused primarily on Auto-Cite and hyperlinking between products in the on-line environment. But, the same issue is presented in the CD-ROM arena, as reflected in the Matthew Bender comments, and comments of other CD-ROM publishers. HyperLaw Exhibit D shows how Thomson companies linked CD-ROM products together creating a competitive edge which is worsened in the post-acquisition period. In argument before the court, the parties were focused solely on books and on-line services—ignoring CD-ROM and the Internet.
 These agreements were provided to the Government by Lexis during its investigation. See Declaration of Michael A Jacobs dated September 11, 1996, Lexis provided a copy of this agreement to the Government during its investigation.
 See HyperLaw Exhibit J, Letter Dated October 10, 1996 from Carl J. Hartmann, counsel for HyperLaw, to Craig Conrath, Esq.
 See HyperLaw Exhibit K, Letter Dated March 13, 1995, from Carl J. Hartmann to Joseph Musilek, counsel for West.
 See HyperLaw Exhibit G, the Court's Docket Sheet, West Publishing Company v. Mead Data Central, Inc., 4-85-931, United States District Court, District of Minnesota; HyperLaw Exhibit H, Docket Sheet, West Publishing Company v. Mead Corporation, Mead Data Central, Inc., Civ. 4-88-142, United States District Court, District of Minnesota.
 As Matthew Bender points out, access to text of opinions is important for CD-ROM versions of secondary law products. Part V of the complaint addresses Reduced Competition in Secondary Law Products. Paragraph 43 of the complaint notes the anti-competitive of West star-pagination claims on CD-ROM secondary law products. Of course, one must star-paginate to something. Paragraph 30 must be read in conjunction with Paragraph 43. It is also interesting to note that the Government now wishes to restrict Paragraph 30 to states such as New York where there are official reporters with the official text of opinions and accordingly the text of older opinions is available to all publishers (as opposed to the situation with the lower federal courts where there is no official reporter and West serves as the semi-official publisher for the Federal district courts.) The Government's new, narrow reading would only make sense if the Government claimed that Lawyers Cooperative holds the copyright to the text of court opinions in the official reports of New York State as published by Lawyers Cooperative, a somewhat absurd proposition which has never even been suggested by anyone before, even Lawyers Cooperative.
 Once this case is out of the hands of this Court, we can certainly expect West-Thomson to argue for a much broader meaning of the complaint. (After all, West-Thomson is itself no doubt aware of the future collateral estoppel effect of the consent decree, and it can and will read the complaint in a broad manner, whatever the constricted construction that the Government now places on the complaint.) Return to text.

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