[Federal Register Volume 61, Number 130 (Friday, July 5, 1996)]
[Notices]
[Pages 35250-35265]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16891]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States of America vs. The Thomson Corporation and West
Publishing Company; Proposed Final Judgment and Competitive Impact
Statement
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 vs. The Thomson Corporation and West Publishing Company, Civ.
Action No. 96-1415. The proposed Final Judgment is subject to approval
by the Court after the expiration of the statutory 60-day public
comment period and compliance with the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h).
On June 19, 1996, the United States filed a Complaint seeking to
enjoin a transaction in which The Thomson Corporation (``Thomson'')
agreed to acquire West Publishing Company (``West''). Thomson and West
are two of the country's largest publishers of law books and legal
research materials. Thomson and West publish numerous competing legal
publications, including the only two annotated United States Codes and
the only two enhanced U.S. Supreme Court reporters. The Complaint
alleged that the proposed acquisition would substantially lessen
competition in the market for legal publications in violation of
section 7 of the Clayton Act, 15 U.S.C. 18, and Section 1 of the
Sherman Antitrust Act, 15 U.S.C. 1.
The proposed Final Judgment orders defendants to divest 51 legal
publications to one or more purchasers who have the ability effectively
to compete in the market for legal publications. To insure that each
divested product will be sold as a viable, ongoing line of business,
Thomson is required to divest related production assets in addition to
its rights to publication titles, and to allow the purchaser to seek to
hire employees who have been working on the products. The defendants
are also required to license openly the right to use the pagination of
individual pages in West's National Reporter System to any interested
third party for a fee. Thomson is also to grant to Lexis-Nexis options
to extend for five years its current licenses for the three important
non-legal databases: Investext, ASAP, and Preicasts. In addition,
Thomson is required to allow the state of California, Washington and
Wisconsin to reopen the bidding for contracts presently held by Thomson
for the publication of their respective official state case law
reporters. In the event any of these states choose another official
reporter, Thomson is required to divest its assets related to its
current contract and to divest its associated state digest.
A Competitive Impact Statement filed by the United States describes
the Complaint, the proposed Final Judgment, and remedies available to
private litigants.
[[Page 35251]]
Public comment is invited within the statutory 60-day comment
period. Such comments, and the responses thereto, will be published in
the Federal Register and filed with the Court. Written comments should
be directed to Craign W. Conrath, Chief, Merger Task Force, Antitrust
Division, 1401 H Street NW., Suite 4000, Washington, DC 20530
(telephone: 202-307-5779). Copies of the Complaint, Stipulation,
proposed Final Judgment and Competitive Impact Statement are available
for inspection in Room 215 of the Antitrust Division, Department of
Justice, 325 7th Street NW., Washington, DC 20530 (telephone: 202-514-
2481) and at the office of the Clerk of the United States District
Court for the District of Columbia, Third Street and Constitution
Avenue NW., Washington, DC 20001.
Copies of any of these materials may be obtained upon request and
payment of a copying fee.
Lawrence R. Fullerton,
Deputy Assistant Attorney General, Antitrust Division.
United States District Court for the District of Columbia
In the matter of United States of America, State of California,
by and through its Attorney General Daniel E. Lungren; State of
Connecticut, by and through its Attorney General Richard Blumenthal;
State of Illinois, by and through its Attorney General Jim Ryan;
Commonwealth of Massachusetts, by and through its Attorney General
Scott Harshbarger; State of New York, by and through its Attorney
General Dennis C. Vacco; State of Washington, by and through its
Attorney General Christine O. Gregoire, and State of Wisconsin, by
and through its Attorney General James E. Doyle, Jr.; Plaintiffs,
vs. The Thomson Corporation and West Publishing Company, Defendants;
Docket No.: 96-CV01415, Judge Charles R. Richey, File: 6/19/96.
Stipulation and Order
It is stipulated by and between the undersigned parties, by their
respective attorneys, as follows:
(1) The Court has jurisdiction over the subject matter of this
action and over each of the parties hereto, and venue of this action is
proper in the District for the District of Columbia.
(2) The parties stipulate that a Final Judgment in the form hereto
attached may be filed and entered by the Court, upon the motion of any
party or upon the Court's own motion, at any time after compliance with
the requirements of the Antitrust Procedures and Penalties Act (15
U.S.C. 16), and without further notice to any party or other
proceedings, provided that the plaintiffs have not withdrawn their
consent, which they may do at any time before the entry of the proposed
Final Judgment by serving notice thereof on defendants and by filing
that notice with the Court.
(3) Plaintiffs' consent to the entry of this decree should not be
read to suggest that plaintiffs believe that a license is required
before a legal publisher may star paginate to defendants' products.
Plaintiffs expressly reserve the right to assert their views concerning
the extent, validity, or significance of any intellectual property
right claimed by defendants, in judicial proceedings or in any other
forum. Plaintiffs and defendants agree that this Final Judgment shall
have no impact whatsoever on any adjudication concerning these matters.
(4) Defendants shall abide by and comply with the provisions of the
proposed Final Judgment pending entry of the Final Judgment, and shall,
from the date of the signing of this Stipulation, comply with all the
terms and provisions of the proposed Final Judgment as though the same
were in full force and effect as an order of the Court.
(5) Defendants will not consummate their transaction before the
Court has signed this Stipulation and Order.
(6) Thomson shall prepare and deliver reports in the form required
by the provisions of paragraph B of Section VI of the proposed Final
Judgment commencing no later than July 19, 1996, and every thirty (30)
days thereafter pending entry of the Final Judgment.
(7) In the event the plaintiffs withdraw their consent, as provided
in paragraph 2 above, or if the proposed Final Judgment is not entered
pursuant to this Stipulation, this Stipulation shall be of no effect
whatsoever, and the making of this Stipulation shall be without
prejudice to any party in this or any other proceeding.
Dated: June , 1996.
For plaintiff United States of America:
Craig W. Conrath,
Attorney, U.S. Department of Justice.
Keith S. Blair (DC Bar #450252),
Attorney, U.S. Department of Justice, Antitrust Division, Merger Task
Force, 1401 H Street N.W., Washington, D.C. 20005, (202) 307-5779.
For defendant the Thomson Corporation.
Wayne D. Collins,
Shearman & Sterling, Citicorp Center, 153 East 53rd Street, New York,
N.Y. 10022, (212) 848-4000, Attorney for The Thomson.
For plaintiff State of California:
Kathleen F. Foote.
For plaintiff State of Connecticut:
Aaron S. Bayer.
For plaintiff State of Illinois:
Christine H. Roszo.
For plaintiff Commonwealth of Massachusetts:
George K. Weber.
For plaintiff State of New York:
Stephen N. Houck.
For defendant West Publishing Company:
James E. Schatz,
Schatz Paquin Lockridge Grindal & Holstein P.L.L.P., Suite 2200, 100
Washington Avenue Sol, Minneapolis, MN 55401, (612) 339-6900, Attorney
for West Publishing, Company.
For plaintiff State of Washington:
Tina E. Kondo.
For plaintiff State of Wisconsin:
Kevin J. O'Connor.
So ordered: ______ United States District Judge.
Final Judgment
WHEREAS plaintiffs, the United States of America (hereinafter
``United States''), the State of California, the State of Connecticut,
the State of Illinois, the Commonwealth of Massachusetts, the State of
New York, the State of Washington, and the State of Wisconsin, having
filed their Complaint herein, and defendants, by their respective
attorneys, having consented to the entry of this Final Judgment without
trial or adjudication of any issue of fact or law herein, and without
this Final Judgment constituting any evidence against or an admission
by any party with respect to any issue of law or fact herein;
AND WHEREAS, defendants have agreed to be bound by the provisions
of this Final Judgment pending its approval by the Court;
AND WHEREAS, prompt and certain divestiture or license of certain
assets to one or more third parties is the essence of this agreement;
AND WHEREAS, defendants acknowledge that plaintiffs' consent to the
entry of this decree should not be read to suggest that plaintiffs
believe
[[Page 35252]]
that a license is required before a legal publisher may star paginate
to defendants' products and that plaintiffs expressly reserve the right
to assert their views concerning the extent, validity, or significance
of any intellectual property right claimed by defendants, in judicial
proceedings or in any other forum. Plaintiffs and defendants further
agree that this Final Judgment shall have no impact whatsoever on any
adjudication concerning these matters.
AND WHEREAS, the parties intend to require defendants to divest, as
viable lines of business, certain assets so as to ensure, to the sole
satisfaction of the plaintiffs, that the Acquirer will be able to
publish and sell the assets as viable, ongoing product lines;
AND WHEREAS, defendants have represented to plaintiffs that the
divestitures required below can and will be made as provided in this
Final Judgment and that defendants will later raise no claims of
hardship or difficulty as grounds for asking the Court to modify any of
the divestiture provisions contained below;
NOW, THEREFORE, before the taking of any testimony, and without
trial or adjudication of any issue of fact or law herein, and upon
consent of the parties hereto, it is hereby ORDERED, ADJUDGED, AND
DECREED as follows:
I.
Jurisdiction
This Court has jurisdiction over the subject matter of this action
and over each of the parties hereto. The Complaint states a claim upon
which relief may be granted against the defendants under Section 7 of
the Clayton Act, as amended (15 U.S.C. 18).
II.
Definitions
As used in this Final Judgment:
A. ``Acquirer'' means the person(s) to whom Thompson shall sell the
Divestiture Products (as defined below).
B. ``Divestiture Products'' means the product lines listed on
Exhibit A.1 and Exhibit A.2 attached hereto, in any medium, including
all rights and interests in them, including all intellectual property
rights, all existing work in progress, plates, films, master tapes,
machine-readable codes for CD-ROM production, existing inventory,
pertinent correspondence and files, a copy of the current subscriber
list, all related subscriber information, advertising materials,
contracts with authors, software, and, at Acquirer's option, computers
and other physical assets used primarily for production of the
Divestiture Product. Auto-Cite is a Divestiture Product and its
divestiture shall include the sale of all Auto-Cite trademarks and
service marks, the assignment of the Auto-Cite License Agreement, and
delivery of a transferable royalty-free perpetual license of the Auto-
Cite case database as of the time of the devestitive and all software,
trade secrets, and know-how used in producing and updating the Auto-
Cite case database.
C. ``Official Reporter Contract States'' means California,
Washington, and Wisconsin.
D. ``Official Reporter Contract'' means a contract between Thomson
and an Official Reporter Contract State pursuant to which Thomson
publishes the official case law reporters for that state.
E. ``Retained Product'' means any product offered for sale or in
development by Thomson or West as of June 1, 1996, that is not a
Divestiture Product.
F. ``Auto-Cite License Agreement'' shall mean the agreement by
which Thomson currently licenses the use of Auto-Cite to Lexis-Nexis,
specifically, the Thomson Legal Publishing License Agreement dated
March 7, 1991, as amended by a letter agreement dated March 22, 1996
between Andrew G. Mills of Thomson and Louis J. Andreozzi of Lexis-
Nexis.
G. ``Thomson'' means defendant The Thomson Corporation, a Canadian
corporation with its headquarters in Toronto, Ontario, Canada, and
includes its successors and assigns, their subsidiaries, affiliates,
directors, officers, managers, agents and employees.
H. ``West'' means defendant West Publishing Company, a Minnesota
corporation with its headquarters in Eagan, Minnesota, and includes its
successors and assigns, their subsidiaries, affiliates, directors,
officers, managers, agents and employees.
I. ``Lexis-Nexis'' means Lexis-Nexis, a division of Reed Elsevier
Inc., a Massachusetts corporation with its headquarters in Newton,
Massachusetts, and includes its successors and assigns, their
subsidiaries, affiliates, directors, officers, managers, agents and
employees.
J. ``National Reporter System'' means those printed case report
series published by West that West has designated, or in future
designates, as part of the National Reporter System.
III.
Applicability
A. The provisions of this Final Judgment apply to the defendants,
their successors and assigns, their subsidiaries, affiliates,
directors, officers, managers, agents, and employees, and all other
persons in active concert or participation with any of them who shall
have received actual notice of this Final Judgment by personal service
or otherwise.
B. Thomson, as a condition of the sale or other disposition of any
or all of the Divestiture Products, shall require the Acquirer to agree
to be bound by the provisions of this Final Judgment.
IV.
Divestiture of Assets
A. Thomson is hereby ordered and directed, within nine (9) months
from the date of this Final Judgment is filed with the Court, to divest
the Divestiture Products listed on Exhibit A.1 and A.2. the United
States, in its sole discretion, may agree to an extension of this time
period of up to three (3) months, and shall notify the Court in such
circumstances.
B. Divestiture under Section IV.A of the Divestiture Products
listed on Exhibit A.1 shall be accomplished in such a way as to satisfy
the United States, in its sole discretion after consultation with the
state plaintiffs, (and, for state specific Divestiture Products, to
satisfy, the appropriate state plaintiff) that the Divestiture Products
can and will be operated by the Acquirer as viable, ongoing product
lines. Divestiture Products under Section IV.A shall be made to a
purchaser for whom it is demonstrated to the sole satisfaction of the
United States after consultation with the state plaintiffs, (and, for
state specific Divestiture Products, to the satisfaction of the
appropriate state plaintiff) that (1) the purchase is for the purpose
of competing effectively in the publication and sale of the Divestiture
Products, and (2) the Acquirer has the managerial, operational, and
financial capability to compete effectively in the publication and sale
of the Divestiture Products. Defendants are prohibited from entering
into any agreement with the Acquirer to license exclusively the
Divestiture Products to the Defendants.
C. Thomson shall include in any purchase agreement made in
connection with the divestiture obligations in Section IV.A the option
to the Acquirer, exercisable at the time of the closing of the purchase
agreement, to require Thomson to continue, for a reasonable period of
time and for reasonable compensation, to produce the Divestiture
Product on behalf of the Acquirer, provided that the Acquirer shall
control all non-production-related
[[Page 35253]]
aspects of the Divestiture Product, including pricing, promotion,
sales, and order fulfillment.
D. The Acquirer of any Divestiture Product which Thomson currently
uses, in whole or in part, in any Retained Product (e.g., for purposes
of supplying a Retained Product with primary law content or copies or
indices of annotations or headnotes from a Divestiture Product) shall
grant Thomson a royalty-free license to continue to use the Divestiture
Product to the same extent for another twelve (12) months immediately
following the closing of the sale of the Divestiture Product (twenty-
four (24) months in the case of Auto-Cite).
E. In accomplishing the divestiture ordered by this Final Judgment,
the defendants shall make known, by usual and customary means, the
availability of the Divestiture Products. The defendants shall provide
any person making inquiry regarding a possible purchase of a copy of
the Final Judgment. The defendants shall also offer to furnish to any
bona fide prospective purchaser, subject to custody confidentiality
assurances, all reasonably necessary information regarding the
Divestiture Products, except such information subject to attorney-
client privilege or attorney work product privilege. Defendants shall
make available such information to the plaintiffs at the same time that
such information is made available to any other person. Defendants
shall permit bona fide prospective purchasers of the Divestiture
Products to have access to personnel and to make such inspection of
physical facilities and any and all financial, operational, or other
documents and information as may be relevant to the divestiture
required by this Final Judgment.
F. Defendants shall make available to plaintiffs and to Acquirer
information about the personnel involved in editorial product of each
of the Divestiture Products to enable Acquirer to make offers of
employment. Defendants shall not interfere with any negotiations by the
Acquirer to employ any West or Thomson employee whose primary
responsibility is the production, sale or marketing of such Divestiture
Product.
G. Thomson shall take all reasonable steps to accomplish quickly
the divestitures contemplated by this Final Judgment.
V.
Appointment of Trustee
A. In the event that Thomson has not divested the Divestiture
Products within nine (9) months from the date this Final Judgment is
filed with the Court, Thomson shall notify the plaintiffs 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
divestiture of the Divestiture Products. Unless the plaintiff otherwise
consent in writing, the divestiture shall be accomplished in such a way
as to satisfy the United States, in its sole discretion after
consultation with the state plaintiffs, (and, for state specific
Divestiture Products, to satisfy the appropriate state plaintiff), that
the Divestiture Products can and will be used by the Acquirer as viable
on-going product lines. The divestiture shall be made to an Acquirer
for whom it is demonstrated to the United States' sole satisfaction
after consultation with the state plaintiffs, (and, for state specific
Divestiture Products, to the satisfaction of the appropriate state
plaintiff) that the Acquirer has the managerial, operational, and
financial capability to compete effectively in the publication and sale
of the Divestiture Products, and that none of the terms of the
divestiture agreement interfere with the ability of the purchaser to
compete effectively in the publication and sale of the Divestiture
Products.
B. After the appointment of a trustee becomes effective, only the
trustee shall have the right to sell the Divestiture Products. The
trustee shall have the power and authority to accomplish the
divestiture at the best price then obtainable upon a 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 as the Court
shall deem appropriate. The trustee shall have the power and authority
to hire at the cost and expense of defendants any investment bankers,
attorneys, or other agents reasonably necessary in the judgment of the
trustee to assist in the divestiture, and such professionals and agents
shall be solely accountable to the trustee. The trustee shall have the
power and authority to accomplish the divestiture at the earliest
possible time to a purchaser acceptable to the United States after
consultation with the state plaintiffs, (and, for state specific
Divestiture Products, acceptable to the appropriate state plaintiff),
and shall have such other powers as this Court shall deem appropriate.
Defendants shall not object to a sale by the trustee on any grounds
other than (1) the trustee's malfeasance, or (2) that the sale is
contrary to the express terms of this Final Judgment. Any such
objections by defendants must be conveyed in writing to the plaintiffs
and the trustee within ten (10) days after the trustee has provided the
notice required under Section VI.
C. The trustee shall serve at the cost and expense of Thomson, 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 its services and those of
any professionals and agents retained by the trustee, all remaining
money shall be paid to Thomson and the trust shall then be terminated.
The compensation of such trustee and that of any professionals and
agents retained by the trustee shall be reasonable in light of the
value of the Divestiture Products and based on a fee arrangement
providing the trustee with an incentive based on the price and terms of
the divestiture and the speed with which it is accomplished.
D. Thomson shall use its best efforts to assist the trustee in
accomplishing the required divestiture. 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 of Thomson and West, and defendants shall
develop financial or other information relevant to such assets as the
trustee may reasonably request, subject to reasonable protection for
trade secret or other confidential research, development, or commercial
information. Defendants shall take no action to interfere with or to
impede the trustee's accomplishment of the divestiture.
E. After its appointment, the trustee shall file monthly reports
with the parties and the Court setting forth the trustee's efforts to
accomplish the divestiture ordered under this Final Judgment. If the
trustee has not accomplished such divestiture within six (6) months
after its appointment, the trustee shall thereupon promptly file with
the Court a report setting forth (1) the trustee's efforts to
accomplish the required divestiture, (2) the reasons, in the trustee's
judgment, why the required divestiture has not been accomplished, and
(3) the trustee's recommendations. 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 such orders as
it shall deem appropriate in order to carry out the purpose of the
trust, which may, if necessary, include
[[Page 35254]]
extending the trust and the term of the trustee's appointment by a
period requested by the United States.
VI.
Notification
A. Within two (2) business days following execution of a definitive
agreement, Thomson or the trustee, whichever is then responsible for
effecting the divestiture required herein, shall notify the plaintiffs
of any proposed divestiture required by Section IV or V of this Final
Judgment. If the trustee is responsible, it shall similarly notify
Thomson. 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 Divestiture
Products, together with full details of the same. Within fifteen (15)
days after receipt of the notice, the plaintiffs may request additional
information concerning the proposed divestiture, the proposed
purchaser, and any other potential purchaser. Thomson or the trustee
shall furnish the additional information within fifteen (15) days of
the receipt of the request. Within thirty (30) days after receipt of
the notice or within fifteen (15) days after receipt of the additional
information, whichever is later, the United States (or, for state
specific Divestiture Products, the appropriate state plaintiff) shall
notify in writing Thomson and the trustee, if there is one, if it
objects to the proposed divestiture. If the United States (or, for
state specific Divestiture Products, the appropriate state plaintiff)
fails to object within the period specified, or if the United States
(or, for state specific Divestiture Products, the appropriate state
plaintiff) notifies in writing Thomson and the trustee, if there is
one, that it does not object, then the divestiture may be consummated,
subject only to Thomson's limited right to object to the sale under
Section V.B. Upon objection by the United States (or, by the state
specific Divestiture Products, the appropriate state plaintiff) or by
Thomson under Section V.B, the proposed divestiture shall not be
accomplished unless approved by the Court.
B. Thirty (30) days from the date when this Order becomes final,
and every thirty (30) days thereafter until the divestiture has been
completed or a trustee is appointed, Thomson shall deliver to the
plaintiffs a written report as to the fact and manner of compliance
with Section IV of this Final Judgment. Each such report shall include,
for each person who during the preceding thirty (30) days made an
offer, expressed an interest or desire to acquire, entered into
negotiations to acquire, or made an inquiry about acquiring any
ownership interest in all or any portion of the Divestiture Products,
the name, address, and telephone number of that person and a detailed
description of each contact with that person during that period.
Thomson shall maintain full records of all efforts made to divest all
or any portion of the Divestiture Products.
VII.
Financing
Thomson shall not finance all or any part of any purchase made
pursuant to Sections IV or V of this Final Judgment without the prior
written consent of the United States.
VIII.
Preservation of Assets
Until the divestitures required by Section IV.A of the Final
Judgment have been accomplished:
A. Defendants shall take all steps necessary to ensure that each
Divestiture Product listed on Exhibit A.1 will be maintained as an
independent, ongoing, economically viable and active competitor in its
respective line of business in the United States and that, except as
necessary to comply with Section IV.B of this Final Judgment, the
product management for all Divestiture Products, including the
marketing and pricing information and decision-making, be kept separate
and apart from, and not influenced by, Thomson's and West's businesses
in other products.
B. Defendants shall use all reasonable efforts to maintain and
increase sales of the Divestiture Products, and shall maintain at 1995
or previously approved levels for 1996, whichever are higher,
promotional advertising, sales, marketing, and merchandising support
for the Divestiture Products.
C. Defendants shall take all steps necessary to ensure that the
Divestiture Products are fully maintained. Defendants shall not
establish, prior to divestiture, any license of any of the Divestiture
Products to themselves. Defendants' production, sales and marketing
employees with primary responsibility for the Divestiture Products
shall not be transferred or reassigned to any Retained Product, except
for transfer bids initiated by employees pursuant to defendants'
regular, established job posting policy, provided that defendants give
the United States (and, for the state specific Divestiture Products,
the appropriate state plaintiff) and Acquirer ten (10) days' notice of
such transfer.
D. Defendants shall not, except as part of a divestiture approved
by the United States, sell any Divestiture Products.
E. Defendants shall take no action that would jeopardize the sale
of the Divestiture Products.
IX.
Star Pagination
A. Beginning no later than ten (10) business days after the entry
of the Final Judgment, defendants shall grant to any third party a
license in the form attached as Exhibit B to star paginate to West's
National Reporter System publications subject to license fees not to
exceed the price indicated below per format per year per 1,000
Characters (as defined in Exhibit B) contained in the material being
star paginated:
First year of license:--$0.09.
Second year of license:--$0.11.
Third and subsequent years of license:--$0.13.
The license fees may increase at a rate based upon, but not to
exceed, the change in the United States Department of Labor Producer
Price Index for Finished Goods.
B. Any existing star pagination licensee may elect to modify its
existing license on star pagination by substituting the terms and
conditions of the license contained in Exhibit B on 120 days' notice.
X.
Options to Lexis-Nexis
Within ten (10) business days after the entry of the Final
Judgment, Thomson shall grant to Lexis-Nexis the options to extend the
License Agreements for Investext, ASAP, and Predicasts databases or any
successor, follow-on, replacement, or substitute databases for an
additional five (5) years beyond their current expiration dates,
exercisable within one year of the date of the entry of this Final
Judgment. Should Lexis-Nexis elect to exercise this option, all other
terms and conditions of such License Agreement shall be no less
favorable than the current terms and conditions. Nothing contained in
any Lexis-Nexis agreement with Thomson shall be deemed to prohibit
Lexis-Nexis from negotiating and contracting, but not implementing, the
direct or indirect sourcing of information in those databases.
[[Page 35255]]
XI.
Option to Official Reporter Contract States
Within ten (10) business days after the entry of the Final
Judgment, Thomson shall grant to the Official Reporter Contract States
the option to terminate the contracts presently held by Thomson, for
the publication of the official state case law reporters (listed in
Exhibit A.3) in those states without cause upon ninety (90) days'
notice, notwithstanding anything to the contrary in those contracts.
This option may be exercised at any time prior to the expiration of the
current Official Reporter Contract. In the event any of the Official
Reporter Contract States elect to exercise this option:
A. Thomson shall undertake all reasonable efforts to assist the
Official Reporter Contract State in finding a substitute publisher for
the product(s) at issue.
B Upon the identification of a substitute publisher:
1. Thomson shall provide that entity with copies of all existing
work in progress, plates, films, master tapes, machine-readable codes
for CD-ROM production, existing inventory, pertinent correspondence and
files, a current copy of the subscriber list, all related subscriber
information, advertising materials, Official Reporter Contracts,
software, and, at the substitute publisher's option, computers and
other physical assets used primarily for production of the respective
official state case law reporters.
2. Thomson shall make available to the United States (and, for
state specific Divestiture Products, the appropriate state plaintiff)
and to that entity information about the personnel involved in
editorial production of the respective official state case law reporter
to enable that entity to make offers of employment. Thomson shall not
interfere with any negotiations by that entity to employ any Thomson
employee whose primary responsibility is the production, sale or
marketing of such official state case law reporter.
3. Thomson shall not transfer or reassign production, sales and
marketing employees with primary responsibility for the official state
case law reporter to any Retained Product, except for transfer bids
initiated by employees pursuant to Thomson's regular, established job
posting policy, provided that Thomson gives the United States (or, for
state specific Divestiture Products, the appropriate state plaintiff)
and that entity ten (10) days' notice of such transfer.
4. Thomson shall grant that entity an option to acquire Thomson's
inventory of the official reports at its cost to Thomson; and
5. Thomson shall divest the digest product for that state set forth
in Exhibit A.4, within the time periods and pursuant to the procedures
set forth in Sections IV, V, VI, VII, and VIII of this Judgment.
C. Thomson shall transfer to the Official Reporter Contract State a
license, which shall be perpetual in term, sublicensable, assignable,
and royalty-free, to the use of any intellectual property rights which
Thomson holds pertaining to the headnotes, case notes, and/or case
summaries in the product(s) at issue.
XII.
Compliance Inspection
For the purpose of determining or securing compliance with this
Final Judgment, and subject to any legally recognized privilege, from
time to time:
A. Duly authorized representatives of the plaintiffs, including
consultants and other persons retained by the United States, shall,
upon the written request of the Assistant Attorney General in charge of
the Antitrust Division, or the appropriate State Attorney General with
respect to the state specific Divestiture Products, and on reasonable
notice to Thomson made to its principal offices, be permitted:
1. access during office hours to inspect and copy all books,
ledgers, accounts, correspondence, memoranda, and other records and
documents in the possession or under the control of defendants, which
may have counsel present, relating to any matters contained in this
Final Judgment; and
2. subject to the reasonable convenience of Thomson and without
restraint or interference from it, to interview directors, officers,
employees, and agents of defendants, which may have counsel present,
regarding any such matters.
B. Upon the written request of the Assistant Attorney General in
charge of the Antitrust Division, or the appropriate State Attorney
General with respect to the state specific Divestiture Products, made
to Thomson at its principal offices, Thomson shall submit written
reports, under oath if requested, with respect to any of the matters
contained in this Final Judgment as may be requested.
C. No information nor any documents obtained by the means provided
in this Section XII shall be divulged by any representative of the
plaintiffs to any person other than a duly authorized representative of
the Executive Branch of the United States or of each state government,
except in the course of legal proceedings to which the plaintiffs are 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 Thomson
to the plaintiffs, Thomson represents and identifies in writing the
material in any such information or documents for which a claim of
protection may be asserted under Rule 26(c)(7) of the Federal Rules of
Civil Procedure, and Thomson 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 the plaintiffs shall give ten
(10) days' notice to Thomson prior to divulging such material in any
legal proceeding (other than a grand jury proceeding) to which Thomson
is not a party.
XIII.
Retention of Jurisdiction
Jurisdiction is retained by this Court for the purpose of enabling
any of the parties to this Final Judgment to apply to this Court at any
time for such further orders and directions as may be necessary or
appropriate for the construction, implementation, or modification of
any of the provisions of this Final Judgment, for the enforcement of
compliance herewith, and for the punishment of any violations hereof.
XIV.
Termination of Provisions
Paragraphs IV, V, VI, VII, VIII, and XI, of this Final Judgment
will expire on the tenth anniversary of the date of its entry.
XV.
Public Interest
Entry of this Final Judgment is in the public interest.
Dated .
Court approval subject to procedures of Antitrust Procedures and
Penalties Act, 15 U.S.C. 16 ______ United States District Judge.
Exhibit A
Exhibit A.1
U.S. Code Service
U.S. Reports, L.Ed.
U.S. Digest
Manual of Federal Practice, 4th Ed.
Bankruptcy Law & Practice, 6th Ed.
Bankruptcy (Epstein, Nickels & White)
Corbin on Contracts
Insurance Law (Appleman)
Search & Seizure (Thomson)
[[Page 35256]]
Ballantine's Law Dictionary
Auto-Cite
Deering's Annotated California Code
California ADR Practice Guide
California Civil Practice Handbook: Choice Between State and Federal
Courts
California Civil Trailbook
California Litigation By the Numbers Court Rules Companion
California Negligence & Settlement
California Products Liability Law & Practice
California Trail
California Tort Law
Modern California Discovery
Colorado Trial Handbook
Trial Handbook for Connecticut Lawyers
Florida Criminal Practice & Procedure
Florida Evidence 2d
Illinois Jurisprudence
Indiana Appellate Handbook 2d
Kentucky Probate PSL
Kentucky Workers' Compensation PSL
Louisiana Code of Evidence--Annotated
Louisiana Successions
Louisiana Workers' Compensation
Annotated Laws of Massachusetts
Massachusetts Corporation PSL
Massachusetts Domestic Relations PSL
Massachusetts Landlord-Tenant Law
Massachusetts Real Estate PSL
Michigan Criminal Law
Michigan Statutes Annotated
Michigan Digest
New Jersey Criminal Procedure
New York Consolidated Laws Service
New York Wills and Trusts
Ohio Family Law
Ohio Probate
Modern Texas Discovery
Texas Civil Pre-Trail Procedure
Texas Trial and Appellate Practice
Washington Trial Handbook
Exhibit A.2
Michigan Law & Practice
New York Estate Administration
Pennsylvania Law Encyclopedia
Exhibit A.3
California Appellate Reports
California Reports
California Reports Advance Sheets
Washington Appellate Court Reports
Washington Supreme Court Reports
Wisconsin Official Reports
Wisconsin Official Reports Advance Sheets
Exhibit A.4
California Digest
Wisconsin Digest
EXHIBIT B
LICENSE AGREEMENT
THIS AGREEMENT, entered into in Eagan, Minnesota by and between
______________ (``Licensee'') and WEST PUBLISHING COMPANY (and its
successors, collectively ``Licensor'');
WHEREAS, Licensee desires to obtain a license from Licensor to
allow Licensee to star paginate to certain West Case Reports in
Licensee Case Reports contained in Licensee's [Licensee Product(s)/
Service(s)]; and
WHEREAS, Licensor desires to grant Licensee such a license;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants which follow, the parties hereby agree that:
Article 1--Definitions
As used in this Agreement, the following terms shall have the
following meanings:
1.01. ``West Case Reports'' shall mean Licensor's reports of
judicial decisions, identified in Exhibit A to this Agreement, that are
selected for reporting by Licensor and coordinated and arranged by
Licensor within NRS Reporters.
1.02. ``NRS Reporters'' shall mean the following printed case
report series published by Licensor that are a part of Licensor's
National Reporter System and any future case report series published by
Licensor that Licensor designates as a part of Licensor's National
Reporter System:
Supreme Court Reporter
Federal Reporter
Federal Supplement
Federal Rules Decisions
Atlantic Reporter
North Eastern Reporter
North Western Reporter
Pacific Reporter
South Eastern Reporter
Southern Reporter
South Western Reporter
California Reporter
Illinois Decisions
New York Supplement
Bankruptcy Reporter
Military Justice Reporter
United States Claims Court Reporter
Federal Claims Reporter
Veterans Appeals Reporter
If Licensor (i) ceases publishing any NRS Reporter in printed form;
and (ii) includes the case, reports of the court(s) previously included
in said NRS Reporter as a part of a New Technology or only on WESTLAW,
such case reports as a part of a New Technology or on WESTLAW shall be
deemed to be said NRS Reporter. In such event, should WESTLAW or the
New Technology continue to contain citations to such case reports in
the same form (including volume numbers, abbreviated NRS Reporter
designation, and beginning page numbers) as the ``NRS Citations'' for
said NRS Reporter and with the same type of pagination as previously
included in said NRS Reporter (i.e., such pagination shall not include
the electronic pagination presently included on WESTLAW, any pagination
related to WESTLAW Cites or any successor WESTLAW and/or New Technology
citation form, or any other electronic pagination used on WESTLAW and/
or the New Technology; jointly, ``WESTLAW/New Technology Pagination'')
WESTLAW and/or the New Technology shall be deemed to be said NRS
Reporter (with respect to the case reports in question) for purposes of
the ``Star Pagination License'' provided for in Article 2; provided,
however, that Licensee shall have no right whatsoever under this
Agreement to produce, use, or make available WESTLAW/New Technology
Pagination in any form or by any means.
1.03. ``Licensee Case Reports'' shall mean Licensee's reports of
judicial decisions that are selected for reporting by Licensee in
[Licensee Product(s)/Service(s)] and coordinated and arranged by
Licensee within [Licensee Product(s)/Service(s)].
1.04. ``[Licensee Product(s)/Service(s)]'' shall mean [description
of Licensee Product(s)/Service(s)] published or provided in [print, CD-
ROM, online or other electronic format] by Licensee after the effective
date of this Agreement.
1.05. ``NRS Pagination'' shall mean the page breaks and related
page numbers of NRS Reporter publications. Should WESTLAW and/or a New
Technology be deemed to be an NRS Reporter pursuant to Section 1.02,
the ``pagination'' referenced in Section 1.02 (other than WESTLAW/New
Technology Pagination) shall be deemed to be NRS Pagination; provided,
however, that WESTLAW/New Technology Pagination shall not be NRS
Pagination.
1.06. ``Licensed NRS Pagination'' shall mean the NRS Pagination
which Licensee obtains a license to use pursuant to the terms and
conditions of this Agreement.
1.07. ``Licensee Subscribers'' shall mean subscribers to or other
licensees of [Licensee Product(s)/Service(s)] that include Licensed NRS
Pagination.
1.08. ``Licensee Subscriber Limitations'' shall mean contractual
obligations contained in the agreements pursuant to which Licensee
Subscribers are licensed the right to access and use Licensed NRS
Pagination as a part of [Licensee Product(s)/Service(s)] that (i) allow
access to and use of Licensed NRS Pagination solely in the regular
course of legal research and related work; (ii) prohibit the
publication, broadcast,
[[Page 35257]]
loan, rent, lease, sale or other transfer of Licensed NRS Pagination,
or of any copy or reproduction thereof; and (iii) prohibit or limit the
making, maintenance or use of Licensed NRS Pagination, or of any copy
or reproduction thereof, in the same manner as such actions are
prohibited or limited for the other contents of [Licensee Product(s)/
Service(s)]. [Will not apply in cases of print licenses]
1.09. ``PPI'' shall mean the United States Department of Labor,
Bureau of Labor Statistics, Producer Price Index for Finished Goods
(1982 = 100) or its successor index(es).
1.10. ``Character'' shall mean each alphabetic, numeric and
punctuation symbol, and each space, in the material in question, and
includes each mnemonic and other control, format and character code,
whether or not displayed.
1.11. ``New Technology'' shall mean any form or means (including,
without limitation, compact disc) by which databases containing legal
materials may be used, made available, or otherwise distributed other
than in any (i) printed or other hard copy form or means; (ii)
microfilm, microfiche, or other form or means that can be visually
perceived through magnification; or (iii) Online form or means.
1.12 ``Online'' shall mean a system of computer terminals directly
linked to a central processing unit or units and related peripheral
equipment on which a database is stored and/or searched, regardless of
the software architecture employed.
1.13. ``WESTLAW'' shall mean the Online computer-assisted legal
research services presently marketed by Licensor under the WESTLAW
trademark, any portion of such services or any Online computer-assisted
legal research service marketed by Licensor after the effect date of
this Agreement, regardless of the name of the service; provided,
however, that WESTLAW shall not include Licensor compact disc or ``New
Technology'' products or services or Online updates or supplements
thereto. Except as otherwise provided in the first sentence of this
Section 1.13 or elsewhere in this Agreement, WESTLAW shall include all
Online services (or portions thereof) described in the preceding
sentence, regardless of how such services are distributed (including,
without limitation, being made available directly to subscribers by
Licensor, through agents or resellers, or through gateway arrangements
with other database providers or distributors).
Article 2--License And Related Terms
2.01. Star Pagination License. During the term of this Agreement,
subject to the terms and conditions hereof, including, without
limitation, the timely payment by Licensee to Licensor of the license
fees provided for in Section 2.03 hereof, Licensor hereby grants to
Licensee, and Licensee hereby accepts from Licensor, a non-exclusive,
non-transferable (except as specifically provided in Section 6.05
hereof), limited license (i) to obtain NRS Pagination from West Case
Reports contained in NRS Reporter publications; (ii) to include such
NRS Pagination (which shall become Licensed NRS Pagination when so
included) in corresponding Licensee Case Reports contained in [Licensee
Product(s)/Service(s)] to Licensee Subscribers subject to Licensee
Subscriber Limitations; provided, however, that no right to in any way
reproduce, use or make available, or authorize any third party to in
any way reproduce, use or make available, West Case Reports, or any
portion or portions thereof other than Licensed NRS Pagination as
provided herein, is granted by Licensor to Licensee under this
Agreement; provided, further, that Licensor shall not challenge, under
any present or future legislation, any use by the Licensee of Licensed
NRS Pagination if Licensee's use of same conforms to the terms of this
Agreement.
2.02 License Limitations. Notwithstanding the provisions of
Section 2.01 hereof or any other provision of this Agreement, the
limited license granted by Licensor to Licensee hereunder does not
include any right to in any way reproduce, use or make available, or
authorize any third party to in any way reproduce, use or make
available, any NRS Pagination or Licensed NRS Pagination in any form,
format or means other than as specifically provided in Section 2.01
hereof; provided, however, that, subject to the terms and conditions of
this Agreement, Licensee may authorize Licensee Subscribers to create
and use printouts of Licensee Case Reports containing Licensed NRS
Pagination subject to Licensee Subscriber Limitations; provided,
further, that nothing in this Agreement shall prohibit Licensee from
selling, leasing, licensing or otherwise transferring Licensee Case
Reports that contain Licensed NRS Pagination to third party information
providers, but such transfers shall not include or grant any right to
reproduce, publish, broadcast, distribute, loan, rent, lease, sell or
otherwise transfer, make available or use the Licensed NRS Pagination
contained in such Licensee Case Reports.
2.03. License Fees. In consideration of the license granted under
Section 2.01 hereof, Licensee shall pay Licensor the license fees
provided for in this Section 2.03. [Specific license fee terms to be
agreed upon, but not to exceed the following license fees per format
(i.e., for each existing format and for each New Technology) per year
per 1,000 characters contained in Licensee Case Reports contained in
[Licensee Product(s)/Service(s)] that include Licensed NRS Pagination,
subject to change based upon, but not to exceed, changes in the PPI:
nine cents ($.09) during the first year of this Agreement, eleven cents
($.11) during the second year of this Agreement, and thirteen cents
($.13) during the third year and subsequent years of this Agreement.]
2.04. No Warranty or Liability. ALL NRS PAGINATION SHALL BE
OBTAINED AND USED BY LICENSEE ON AN ``AS IS'' BASIS WITHOUT WARRANTY OF
ANY KIND, EXPRESS OR IMPLIED, AND LICENSOR SHALL HAVE NO LIABILITY
WHATSOEVER TO LICENSEE IN ANY WAY RELATED TO ANY COPY OF NRS PAGINATION
OR LICENSED NRS PAGINATION OBTAINED OR USED BY LICENSEE HEREUNDER.
2.05. Display of Licensed NRS Pagination. During the term of this
Agreement, if Licensee includes Licensed NRS Pagination as a part of
any Licensee Case Report, such Licensed NRS Pagination shall be
presented no less prominently (in terms of size, high-lighting,
underling, etc.) than any other unofficial pagination or pinpoint
locators for the Licensee Case Report in question.
2.06. Impossibility. Nothing contained in this Agreement shall in
any way require Licensor to continue to publish or provide NRS
Reporters.
2.07. Licensor's Subscription(s) to [Licensee Product(s)/
Service(s)]. In order for Licensor to monitor Licensee's compliance
with the terms and conditions of Articles 2 and 3 hereof, Licensee
shall, at no charge to Licensor, provide Licensor with (a)
subscription(s) to [Licensee Product(s)/Service(s)]. [A copy/Copies] of
[Licensee Products(s)/Service(s)] shall be provided to Licensor as soon
as it/they is/are made available to any third party.
Article 3--Notice Provisions
3.01. Copyrights. During the term of this Agreement, Licensee (i)
shall respect and not contest the validity of the copyrights claimed by
Licensor in Licensor's arrangements of case reports in NRS Reporters as
expressed by NRS
[[Page 35258]]
Pagination; and (ii) shall not, except as specifically provided in this
Agreement, copy, prepare a derivative work of, distribute a copy of or
display publicly, any portion of any NRS Pagination for any commercial
purpose whatsoever. Nothing contained in this Agreement shall be deemed
to prohibit Licensee from copying or making any other use of the
contents or pagination of any NRS Reporter publication after the term
of copyright in such publication has expired as provided in 17 U.S.C.
Sec. 302, et. seq. and related statutes and regulations (or their
successors).
3.02. Copyright Notice. As a condition of the license granted by
Licensor to Licensee under Section 2.01 hereof, Licensee shall ensure
that a copyright notice which complies with the provisions of 17 U.S.C.
Sec. 401, et. seq. and related statutes and regulations (or their
successors) appears on all publicly distributed copies of [Licensee
Product(s)/Service(s)] that contain any Licensed NRS Pagination from
which such [Licensee Product(s)/Service(s)] can be visually perceived,
either directly or with the aid of a machine or device.
3.03. Notice to be Used in Connection with Licensed NRS
Pagination. Licensee shall cause the following notice, or such other
notice as the parties may mutually agree upon from time to time, to be
prominently displayed as a part of the [Licensee Product(s)/Service(s)]
that contain(s) any Licensed NRS Pagination and as a part of the
documentation made available in connection therewith:
STAR PAGINATION TO WEST PUBLISHING COMPANY'S NATIONAL REPORTER
SYSTEM PUBLICATIONS HAS BEEN CREATED AND ADDED TO THIS
PUBLICATION BY [LICENSEE] AND IS BEING MADE AVAILABLE UNDER A LICENSE
FROM WEST.
Article 4--Confidentiality
4.01. Confidentiality Obligations. During the term of this
Agreement and thereafter, except as specifically provided herein and/or
to the extent reasonably necessary to perform its obligations or
exercise or enforce its rights hereunder, neither party shall provide
or disclose to any third party, or itself use, unless authorized in
writing to do so by the other party or properly directed or ordered to
do so by public authority, any information or matter that (i)
constitutes or concerns the terms and conditions of this Agreement;
(ii) is provided to it by the other party hereunder or as a result
hereof; or (iii) regards any dealings or negotiations with the other
party related to this Agreement; provided, however, that the parties
may consult with their respective counsel with respect to such
information or matter and said counsel agree to abide by the terms and
conditions of this Article 4.
4.02. Limitation on Confidentiality. Except with respect to
information or matter constituting or concerning the terms and
conditions of this Agreement or regarding any dealings or negotiations
between the parties hereunder, the parties shall have no
confidentiality obligation under Section 4.01 hereof with respect to
any information or matter specified therein that (i) is already known
to them, (ii) is rightfully disclosed to them by a third party that is
not acting as an agent or representative for the other party, (iii) is
independently developed by or for them, (iv) is publicly known, or (v)
is generally utilized by unaffiliated third parties engaged in the same
business or businesses as the parties. Any party claiming an exception
to Section 4.01 hereof under this Section 4.02 shall have the burden of
proving the basis for the exception.
4.03. Confidentiality Standard. The parties shall follow the same
procedures to insure their compliance with the requirements of Section
4.01 hereof as they follow to protect their own confidential and
proprietary information and matter of a similar nature.
4.04. Injunctive Relief. Each party shall be entitled to
injunctive relief to enforce the other party's compliance with the
obligations contained in Section 4.01 hereof, it being understood and
agreed that the parties will not have an adequate remedy at law if such
obligations are not complied with.
Article 5--Term and Termination
5.01. Term and Termination. Subject to the terms and conditions
hereof, this Agreement shall become effective upon execution by both
parties and shall remain in force [specific term and related provisions
as agreed upon]. Licensee may terminate this Agreement by giving
Licensor at least 90 days' prior written notice of termination.
5.02. Effect of Termination. After termination of this Agreement,
Licensee shall have no contractual right to include NRS Pagination in
[Licensee Product(s)/Service(s)] published or provided after the
effective date of such termination.
Article 6--Miscellaneous Provisions
6.01. Limitations of Liability and Claims.
(a) EXCEPT AS SPECIFICALLY PROVIDED HEREIN, NEITHER PARTY SHALL BE
LIABLE TO THE OTHER PARTY HEREUNDER FOR ANY PROFITS LOST BY THE OTHER
PARTY OR FOR ANY CONSEQUENTIAL, EXEMPLARY, INCIDENTAL, INDIRECT OR
SPECIAL DAMAGES SUFFERED BY THE OTHER PARTY, EVEN IF A PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(b) No claim, regardless of form, which in any way arises out of
this Agreement or the parties' performance of this Agreement may be
made, nor arbitration proceeding based upon such a claim commenced, by
either party more than one year after the basis for the claim becomes
known to the party desiring to assert it.
6.02. Relationship of the Parties. The parties shall be
independent contractors hereunder and neither party shall have the
power or authority to bind the other party with respect to any third
party. Except as specifically provided herein, each party shall bear
its own costs and expenses.
6.03. Effect of Agreement. This Agreement embodies the entire
understanding between the parties with respect to the subject matter
hereof and supersedes any and all prior understandings and agreements,
oral or written, relating thereto. Any amendment hereof must be in
writing and signed by both parties.
6.04. Force Majeure. Each party's performance hereunder is subject
to interruption or delay due to causes beyond its reasonable control
such as acts of God, acts of government, war or other hostility, the
elements, fire, explosion, power failure, equipment failure, industrial
or labor dispute, inability to obtain necessary supplies, and the like.
In the event of such an interruption or delay, any relevant period of
performance of the party affected shall be extended for a period of
time equal to the period of the interruption or delay and any
obligation of the party whose performance is not affected which
correspond to the interrupted or delayed performance shall be suspended
for a period of time equal to the period of the interruption or delay.
Any party whose performance hereunder is subject to such interruption
or delay shall give prompt notice to the other party of the reason or
reasons for the commencement of and of the conclusion of such
interruption or delay.
6.05. Assignment and Successors. Neither this Agreement nor any
part or portion hereof, or right granted hereunder, shall be assigned,
sublicensed or otherwise transferred by Licensee without Licensor's
prior written consent.
[[Page 35259]]
6.06. Severability. Should any provision of this Agreement be held
to be void, invalid, unenforceable or illegal by a court, the validity
and enforceability of the other provisions shall not be affected
thereby.
6.07. Arbitration.
(a) Any and all disputes or controversies arising under this
Agreement shall be resolved by private arbitration conducted in
accordance with the then-current Commercial Arbitration Rules of the
American Arbitration Association (``AAA''), as modified by the terms
and conditions of this Section 6.07. The arbitration proceeding
relating to any such arbitration shall be held in Minneapolis,
Minnesota, and any judgment upon the resulting arbitration decision may
be entered in the appropriate federal or state court located in
Minneapolis, Minnesota. Each party hereby consents to arbitration
jurisdiction and the jurisdiction of such courts for the purposes of
the arbitration and related proceeding described in this Section 6.07.
(b) Arbitration proceedings under this Section 6.07 shall be
commenced by a party by serving the other party with a notice of intent
to arbitrate and filing such notice with the Minneapolis, Minnesota
office of the AAA (``Office''). All arbitrations shall be conducted by
a panel of three arbitrators selected as follows:
(i) Within ten (10) days after the notice of intent to arbitrate is
filed with the Office, each party shall select an arbitrator and shall
notify the other party and the Office of its selection. If either party
fails to select an arbitrator within such ten (10) day period, the
Office shall so notify such party, who shall thereafter have five (5)
business days to select an arbitrator. Failing such selection, the
Office shall make the appointment for such party.
(ii) The two arbitrators so selected shall select an neutral
arbitrator within 15 days after the selection of the second of the
initial arbitrators to be selected. The neutral arbitrator shall be
counsel skilled in the licensing of copyrighted property. The neutral
arbitrator shall not (A) be a present of former owner, officer,
director, or employee of a party; (B) have or have had any business
relationship (including, without limitation, an attorney-client
relationship) with a party; or (c) be a present or former owner,
officer, director, employee or member of any entity that has or has had
a business relationship (including, without limitation, an attorney-
client relationship) with a party. The initial arbitrators may seek a
list of potential neutral arbitrators from the Office, but shall not be
limited to such a list in selecting the neutral arbitrator. If the
initial two arbitrators cannot agree on the required neutral arbitrator
within said 15 day period, they shall so notify the Office within five
(5) business days after the expiration of said 15 day period, and the
Office shall then promptly select the required neutral arbitrator (who
shall meet the criteria set forth above).
(iii) The neutral arbitrator so selected shall be the head of the
arbitration panel and responsible for scheduling and coordinating the
arbitration proceedings.
(c) The decision of the arbitration panel of three arbitrators
shall (i) be made by at least a majority of the arbitrators; (ii) be
made within 60 days after the neutral arbitrator is selected; (iii) be
in writing; and (iv) set forth each of the factors considered by the
arbitrators and the impact of each such factor on their decision.
(d) All arbitration decisions made in accordance with this Section
6.07 shall be final and binding upon the parties. Arbitration as
provided for in this Section 6.07 shall be the sole and exclusive right
and remedy of the parties with respect to any and all disputes or
controversies, and each party hereby waives its right to institute any
judicial proceedings with respect to any such matters, other than the
right to enter judgment upon any arbitration decision rendered as
provided above and to seek enforcement of such judgment once so
entered.
(e) Each party shall bear its own costs and expenses (including,
without limitation, all attorneys' fees, and all costs and expenses of
presenting evidence to and calling witnesses before the arbitration
panel) and those of the arbitrator it selects in connection with any
arbitration proceeding conducted pursuant to this Section 6.07. The
arbitrators shall, in their sole discretion, determine how the parties
shall bear all other arbitration expenses. If required by the Office,
each party shall deposit such sums of money with said Office as said
Office deems necessary to defray arbitration expenses, and failure to
so deposit shall be grounds for a default arbitration decision to be
entered by the arbitrators against a party which fails to make such a
deposit.
6.08. Non-Waiver. Failure of either party to enforce any provision
of this Agreement shall not constitute or be construed as a waiver of
such provision nor of the right to enforce such provision.
6.09. Certain Taxes. Any sales, use, value added and similar taxes
which may be due with respect to Licensed NRS Pagination licensed to
Licensee hereunder, or the license payments due or made by Licensee to
Licensor hereunder, shall be the responsibility of Licensee and shall
be paid by Licensee directly to the relevant taxing authority. Licensee
shall obtain and provide to Licensor any exemption certificates
necessary to absolve Licensor of any responsibility relating to such
taxes.
6.10. Notices. In order to be effective, all notices, requests,
demands, agreements, consents, approvals, permissions and other
communications required or permitted hereunder shall be in writing,
shall be delivered personally, faxed, transmitted by courier or express
service, or mailed, with proper charge prepaid, to the party for whom
intended as set forth below, and shall be deemed to be given upon the
date of actual receipt:
To Licensee:
To Licensor: President, West Publishing Company,
By mail: P.O. Box 64526, 610 Opperman Drive, St. Paul, MN 55164.
(By other means): 610 Opperman Drive, Eagan, MN 55123.
The sending party shall have the burden of proving receipt. Either
party may change any address to which notices and other communications
are to be directed to it by giving notice of such change to the other
party in the manner provided above.
6.11. Governing Law. This agreement shall be governed by and
construed under the laws of the State of Minnesota, and, subject to
Section 6.07 hereof, any action related in any way to this Agreement
shall be brought in the appropriate federal or state court located in
Minneapolis, Minnesota. Each party hereby consents to the jurisdiction
of such courts for the purposes of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement by
their authorized representatives.
[LICENSEE]
By ______
Its ______
Date ______
WEST PUBLISHING COMPANY
By ______
Its ______
Date ______
United States District Court for the District of Columbia
In the matter of: United States of America, 1401 H Street, NW.,
Suite 4000, Washington, DC 20530, (202) 307-1858; State of
California, by and through its Attorney General, Daniel E. Lungren,
1300 I Street, Sacramento, California 95814, (916) 324-7874; State
of Connecticut, by and through its Attorney General, Richard
Blumenthal, 110
[[Page 35260]]
Sherman Street, Hartford, Connecticut 06105, (860) 566-5374; State
of Illinois, by and through its Attorney General, Jim Ryan, 100 West
Randolph Street, Chicago, IL 60601, (312) 814-5610; Commonwealth of
Massachusetts, by and through its Attorney General, Scott
Harshbarger, 1 Ashburton Place, Boston, Massachusetts 02108, (617)
727-2200; State of New York, by and through its Attorney General,
Dennis C. Vacco, 120 Broadway, Suite 2601, New York, New York 10271,
(212) 416-8275; State of Washington, and by and through its Attorney
General, Christine O. Gregoire, 900 Fourth Avenue, Suite 2000,
Seattle, Washington 98164, (206) 464-7663; State of Wisconsin, by
and through its Attorney General, James E. Doyle, Jr., 123 West
Washington, Madison, Wisconsin 53707, (608) 266-8986; Plaintiffs,
vs. the Thomson Corporation, and One Station Place, Stamford,
Connecticut 06902, (203) 328-9400; West Publishing Company, 620
Opperman Drive, Eagan, Minnesota 55123, 1-800-328-9352, Defendants;
Civil No. 96-1415 (CRR), File: 6/25/96, Judge Charles R. Richey.
Competitive Impact Statement
The United States 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 plaintiffs filed a civil antitrust complaint on June 19, 1996,
alleging that the proposed acquisition of West Publishing Company by
the Thomson Corporation would violate Section 7 of the Clayton Act, 15
U.S.C. 18, and Section 1 of the Sherman Antitrust Act, 15 U.S.C. 1.
West and Thomson are two of the largest publishers of legal research
materials in the United Staes.
The complaint alleges that the combination of these major
competitors would substantially lessen competition in (1) the
publication of research-enhanced cases and statutes (``enhanced primary
law'') in nine enhanced primary law product markets, (2) the markets
for certain secondary law products, and (3) the market for the
provision of comprehensive online legal research services. The prayer
for relief seeks a judgment that the proposed acquisition would violate
Section 7 of the Clayton Act, 15 U.S.C. 18, and Section 1 of the
Sherman Antitrust Act, 15 U.S.C. 1. The prayer for relief also seeks a
preliminary and permanent injunction preventing Thomson and West from
carrying out the proposed merger, or any similar agreement,
understanding or plan.
Shortly before that suit was filed, a proposed settlement was
reached that permits Thomson to complete its acquisition of West, yet
requires extensive divestitures and takes other steps to preserve
competition in the markets in which the transaction raises significant
competitive concerns. A Stipulation and proposed Final Judgment
embodying the proposed settlement were filed at the same time the
complaint was filed.
The proposed Final Judgment orders the defendants to divest the
products listed in Exhibit A.1 and A.2 of this Competitive Impact
Statement and to offer to divest the products listed in Exhibit A.3 and
A.4 of this Competitive Impact Statement. In general, the defendants
must complete these divestitures within nine months after entry of
Final Judgment. If they do not, the Court may appoint a trustee to sell
the assets. The proposed Final Judgment further requires Thomson to
ensure that, until the divestitures mandated by the Final Judgment have
been accomplished, the products to be divested will be operated
independently as continuing, viable, ongoing lines of business, and
kept separate and apart from Thomsons and West's businesses in other
products. The proposed Final judgment also requires Thomson to license
to any publisher, for a fee, the use of ``star pagination'' (explained
below), and requires Thomson to extend the licenses of certain products
to Lexis-Nexis.
The plaintiffs and Thomson have stipulated that the proposed Final
Judgment may be entered 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 the
provisions of the proposed 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
Defendant Thomson Corporation is a corporation organized and
existing under the laws of the Province of Ontario, Canada, with its
principal office in Toronto, Ontario, Canada. It is the world's largest
publisher of information for professional markets, and it is one of the
largest publishers of legal research materials in the United States.
West Publishing Company is a corporation organized and existing
under the laws of the State of Minnesota, with its principal office in
Eagan, Minnesota. West is the largest publisher of legal research
materials in the United States, notably of court decisions contained in
its National Reporter System.
On February 25, 1996, Thomson agreed to purchase West for
approximately $3.42 billion in cash. This transaction, which would
combine West and Thomson, precipitated the Government's suit.
B. Legal Research Materials
1. Enhanced Primary Law Products
Thomson and West compete directly with each other for print and/or
CD-ROM sales in the following nine enhanced primary law product
markets: United States code; United States Supreme Court case law;
California code; California case law; Massachusetts code; Michigan
code; New York code; Washington case law; and Wisconsin case law.
For both law reporters and codes, Thomson and West provide unique,
enhanced primary law products. The enhanced case law reporters sold by
Thomson and West in the above markets are distinguishable from any
other legal research product in two respects. First, each reporter
contains the entire body of case law for its respective jurisdiction.
Second, each reporter contains comprehensive written descriptions of
points of law within the opinions, also known as ``headnotes'' and
``summaries.'' Similarly, Thomson's and West's enhanced codes are
distinguishable from other codes because they contain the entire code
for the jurisdiction and contain comprehensive written descriptions of
relevant case law relating to code sections, also known as
``annotations.'' There are no other codes or case law reporters in the
above markets that offer this set of enhancements to consumers.
Unenhanced codes sold in print are not a substitute for enhanced
primary codes, and legal researchers do not view them to be reasonably
interchangeable. First, unenhanced codes are priced significantly lower
than annotated primary codes. Second, unenhanced codes are used for
different purposes than enhanced codes. For example, unenhanced codes
are often used for the limited purposes of identifying the correct
wording of a known statute or for obtaining a brief overview of the
relevant statutes on a particular topic. Enhanced codes, unlike
unenhanced codes, are appropriate sources of information when a
researcher has a need to promptly determine judicial interpretations of
statutory language or to determine how statutes may apply to a
particular factual situation--the typical functions of an attorney
[[Page 35261]]
providing legal advice as it relates to statutes.
Likewise, unenhanced case law sold in print is not a substitute for
enhanced case law. Unenhanced case law is generally used for different
purposes than enhanced case law. For example, unenhanced case law is
useful to check the correct language in a known case. However, enhanced
primary law is necessary when the legal researcher wishes to identify
and evaluate judicial interpretation of points of law within an
opinion, what case law might apply to a particular factual situation,
or how case law can be used to support a particular legal position--the
standard practices of an attorney wishing to provide legal advice
relating to case law.
Full-text searching of primary law on Lexis-Nexis, WESTLAW, and CD-
ROM products is only a partial substitute to the enhanced primary law
offered by Thomson and West. Full-text searching is not a good
substitute, for most users and most uses, because it does not provide
users with the editorial analysis of the West or Thomson enhanced
primary materials.
Purchasers desiring to purchase enhanced codes would not turn to
any alternative product in sufficient numbers to defeat a small but
significant increase in price. In addition, purchasers desiring to
purchase enhance case law reporters would not turn to any alternative
product in sufficient numbers to defeat a small but significant
increase in price.
2. Secondary Law Materials
Thomson and West also compete against each other for print and/or
CD-ROM sales of national and state-oriented secondary law products,
such as treatises and practice guides. Each of these competing
products, together with similar competing products, is contained within
a relevant secondary law product market (``relevant secondary law
product markets''). One product from each such relevant secondary law
product market is identified in Exhibit A (in addition to the enhanced
primary law listed therein, as noted above). In each relevant secondary
law product market, West and Thomson are either dominant or significant
competitors.
Secondary law materials are used by researchers to become familiar
with the law both before and after turning to primary law materials.
These secondary materials enable the legal researcher, who might not
have expertise in a particular area of the law, to begin his or her
research in a focused manner. Secondary sources of law lead researchers
to relevant case law, statutes, and other secondary law products.
Secondary sources of law can also be used by researchers to provide
clarification of primary law.
Purchasers desiring to purchase any of the secondary law products
in the relevant secondary law product markets alleged in the complaint
would not turn to any alternative product in sufficient numbers to
defeat a small but significant increase in price.
3. Comprehensive Online Legal Research Services
West, through WESTLAW, is one of two major competitors in the
provision of comprehensive online legal research services; the other
competitor is Lexis-Nexis. WESTLAW and Lexis-Nexis are the two largest
comprehensive online legal research services and they compete directly
with one another.
West places its own primary and secondary law products on WESTLAW.
Lexis-Nexis places its own and third parties' materials on its service,
including some Thomson enhanced primary and secondary law products.
Thomson licenses to Lexis-Nexis, among other products, the Auto-Cite
electronic citator service. Auto-Cite is used to gather negative
commentary on a case and quickly determine case history for use in
correct citation. Thomson also licenses to Lexis-Nexis the United
States Code Service, as well as several other Thomson enhanced primary
law materials, and certain non-legal materials.
Print versions of the law are not adequate substitutes for
comprehensive online legal research services. Legal researchers who
have the necessary computer hardware and the necessary skills to use
this product value the timeliness and speed of comprehensive online
legal research services. Material provided on a comprehensive online
legal research service is updated often and is thus more timely than
material offered in printed form.
Full-text word searching of primary law on CD-ROMs is not an
adequate substitute for comprehensive online legal research services.
The content of most CD-ROMs is limited to a particular jurisdiction or
topic. Moreover, the material contained on CD-ROMs is not as current as
the material offered on an online legal research service. If the
materials on CD-ROMs are not current, lawyers must still use online
legal research services to supplement their research. Furthermore, the
topical or limited jurisdictional focus of CD-ROMs limits their primary
appeal to smaller law firms or firms specializing in a particular area
of the law. These firms are not heavy users of comprehensive online
legal research services.
While the Internet is a useful tool for some researchers, it is not
a substitute for Lexis-Nexis and WESTLAW for several reasons. First,
the material contained on the Internet is not nearly as comprehensive
as the material offered on Lexis and WESTLAW. The Internet does not
provide access to historical opinions, every court's opinions, every
jurisdiction's statutes, or the number of secondary law products that
Lexis-Nexis and WESTLAW offer. Second, the Internet's search mechanism
is not as sophisticated or effective as Lexis-Nexis' or WESTLAW's.
Third, the case law offered on the Internet does not provide citations
that are accepted by courts or are relied on by attorneys.
Purchasers of comprehensive online legal research services would
not turn to any alternative product in sufficient numbers to defeat a
small but significant increase in price. Therefore, the provision of
comprehensive online legal research services is an appropriate product
market in which to assess the competitive effects of the acquisition.
C. Competition Between West and Thomson
Thomson and West compete directly to provide enhanced primary law
in the relevant markets and consumers view the Thomson and West
products as their first and second choices for primary law products.
Indeed, in each relevant market, the Thomson and West products are the
only printed products to which consumers can turn for enhanced primary
law, and, to the limited extent to which full-text searching is a
research enhancement, enhanced primary law products are offered by only
Thomson, West, Lexis-Nexis and a few CD-ROM publishers.
It is unlikely that an entrant could offer comparable products, for
three reasons. First, the entrant would have to compile an historical
collection of cases. Second, the entrant would have to develop a
sophisticated editorial staff capable of creating editorial
enhancements that customers would accept as reliable. Third, West
claims that its copyright is infringed by what is commonly referred to
as ``star pagination,'' the insertion of symbols in the text of
decisions to indicate where internal page breaks are in West's National
Reporter System, and the placement nearby of the corresponding West
reporter's page number. West page numbers are commonly required or
expected by courts. West has granted few, if any, licenses to employ
star pagination. Thus, existing or potential
[[Page 35262]]
participants in the markets for primary law products cannot offer
products with star pagination without the threat of costly infringement
litigation.
West and Thomson also aggressively compete against each other in
the sale of several secondary law products, referred to in Exhibit B.
Thomson and West are the only publishers--or two of very few
publishers--in each relevant secondary law product market. As with
enhanced primary law, it is unlikely that an extrant would be able to
offer comparable products. Thomson's and West's titles are established
resources and it would take a long time for a putative entrant to
overcome West's and Thomson's acceptance by consumers. Furthermore,
West's claim of copyright infringement for ``star pagination'' has a
significant effect on the competitive viability of CD-ROM products,
where it would be possible to include both primary and secondary law
products on the same CD-ROM.
Thomson and West compete vigorously on the basis of price for both
enhanced primary law products and secondary law products. Thomson and
West look almost exclusively to each other in making pricing decisions
and promoting both their enhanced primary and their secondary law
products in the relevant markets, and consumers have benefitted from
this competition. Thomson and West also compete directly on the basis
of quality. The quality of Thomson's and West's enhanced primary and
secondary law products has improved as a result of such competition.
Unless restrained, the proposed acquisition would allow the combined
entity unilaterally to raise prices without the threat of a new entry
into these markets by a third party. Unless restrained, the proposed
acquisition would also have an adverse effect on the quality of
enhanced primary law products and secondary law products.
In the comprehensive online legal research services market, Thomson
supplies enhanced primary law, secondary law products, non-legal
products, and Auto-Cite to Lexis-Nexis. West offers the competing
WESTLAW service, and consumers have benefitted from the vigorous
competition that has existed between Lexis-Nexis and WESTLAW. To
effectively compete against WESTLAW, Lexis-Nexis depends upon access to
certain products that Thomson licenses to Lexis-Nexis. Unless
restrained, the proposed acquisition will increase Thomson's incentive
to exercise market power by increasing prices for, reducing quality and
innovation of, or withholding access to certain products that Thomson
licenses to Lexis-Nexis.
D. Anticompetitive Consequences of the Acquisition
The complaint alleges that Thomson's acquisition of West would
substantially reduce or eliminate competition in (1) nine relevant
enhanced primary law product markets, (2) the publication of secondary
law in the relevant secondary law product markets and (3) the market
for the provision of comprehensive online legal research services.
The complaint alleges that the acquisition would increase
concentration significantly in the nine relevant enhanced primary law
product markets and in the secondary law product markets. After the
acquisition, the combined Thomson/West entity would dominate these
relevant markets. Using a measure of market concentration called the
HHI, defined and explained in Exhibit C, a combination of Thomson and
West would substantially increase concentration in each of the nine
relevant enhanced primary law product markets. The post-merger HHIs and
increases in the HHIs for each market are listed in Exhibit C. Post-
merger HHIs range between 4521 and 9010; increases range from 959 to
4234.
The complaint also alleges that it is unlikely that a new entrant
would enter into any of these relevant markets that would be capable of
restraining any anticompetitive increase in price within a two-year
period. In the nine relevant enhanced primary law product markets and
in the secondary law product markets, there is now competition between
the parties that would end after the acquisition, risking price
increases and reduced product quality and innovation for consumers.
In the market for the provision of comprehensive online legal
research services, Lexis-Nexis depends upon access to some of Thomson's
products to compete effectively against WESTLAW. The complaint alleges
that the acquisition is likely to lessen competition substantially in
the market for comprehensive online legal research services by
increasing Thomson's incentive to increase the prices of, reduce the
quality of, or withhold access to certain materials it provides to
Lexis-Nexis. As a result of such an exercise of market power, there
could be material injury to Lexis-Nexis' ability to compete
effectively, and thus harm to competition in this market. In the event
of such an exercise of market power by Thomson, Lexis-Nexis would be
unable or unlikely to replace the licensed Thomson products in such a
way, or within such time, as to maintain the level of competition that
existed between WESTLAW and Lexis-Nexis before the acquisition. Reduced
competition in the provision of comprehensive online legal research
services would mean higher prices and reduced product quality and
innovation for consumers of those services.
III. Explanation of the Proposed Final Judgment
The proposed Final Judgment would preserve competition in the nine
enhanced primary law product markets. The proposed Final Judgment
requires the divestiture of enhanced code products for the United
States, California, Massachusetts, Michigan, and New York. It also
requires the divestiture of U.S. Reports, L.Ed., a United States
Supreme Court case law reporter. Divestiture of these, and all products
to be divested pursuant to the proposed Final Judgment, must be
accomplished by Thomson within nine months after entry of the Final
Judgment. The defendants must divest the assets and rights associated
with the divested products in such a way as to satisfy the plaintiffs
that the divested products can and will be operated by the acquirer as
viable, ongoing product lines, and that until the divestiture, the
defendants will maintain them as such.
The proposed Final Judgment also permits states to reopen bidding
of three state contracts to publish the official state reporter. This
process will allow the states effectively to cause a divestiture of the
state reporters are all contracted by a bid process, the reopening of
the bidding would stimulate competition in the publication of state
reporters.
Furthermore, under the proposed Final Judgment, one secondary law
product in each of the secondary law markets will be divested.
Competition from buyers of the divested secondary products should cause
Thomson to continually enhance and improve its products in response to
such competition. Thus, the proposed Final Judgment would preserve
competition in the secondary law product markets.
The proposed Final Judgment also requires Thomson to license the
use of star pagination in the National Reporter System to other legal
publishers. As noted above, West has claimed that a license is required
for star pagination. There is pending litigation over the validity of
West's copyright claim. See Oasis Publishing Co. v. West Publishing
Co., F. Supp. , 1996 WL 264773 (D.Minn. 1996); Matthew Bender and
Company, Inc. v. West Publishing Co., Docket No. 94-CIV-0589
(S.D.N.Y.).
[[Page 35263]]
However, West has asserted a copyright claim and has thus far
prevailed in litigation. As a result, only two licenses to use West
pagination have been issued by West. This has created a barrier to
entry for enhanced primary law and secondary law products incorporating
such pagination. The proposed Final Judgment would allow any person to
license use of the West pagination at maximum prices. Thus, the
proposed relief reduces one important barrier to entry and provides
publishers who wish to produce such products with a new option for
introducing products that will compete with Thomson/West. Thus, this
relief, together with the divestitures of enhanced primary and
secondary law products, will aid in maintaining the vigorous
competition in these markets that has existed before the merger.
The proposed Final Judgment should not be read to suggest that the
plaintiffs believe that a license is required before a legal publisher
may star paginate to defendants' products. Indeed, the Antitrust
Division expressly reserves the right to assert its views concerning
the extent, validity, or significance of any intellectual property
right claimed by defendants, in judicial proceedings or in any other
forum. The proposed Final Judgment shall have no impact whatsoever on
any adjudication concerning these matters.
Additionally, pursuant to the proposed Final Judgment, Thomson must
divest itself of Auto-Cite and extend the terms of existing licenses of
Investext, ASAP and Predicasts databases to Lexis-Nexis. The
divestiture of Auto-Cite will ensure that Thomson-West cannot injure
competition in the comprehensive online legal research services market
by increasing prices for, reducing quality and innovation of, or by
denying Lexis-Nexis access Auto-Cite. Likewise, the extension of the
licenses will ensure that Lexis-Nexis will have access to these
resources while it has the opportunity to make appropriate competitive
adjustments. Furthermore, the divestiture of the enhanced primary law
products and the secondary law products would enable the new owner of
those products to make them available to Lexis-Nexis without the owner
having the anticompetitive incentive that arises from owning the main
Lexis-Nexis competitor.
If the defendants fail to divest the divestiture products within
nine months after entry of final judgment, the Court, upon application
of the United States, shall appoint a trustee nominated by the United
States to effect the divestiture. If a trustee is appointed, the
proposed Final Judgment provides that Thomson will pay all costs and
expenses of the trustee and any professionals and agents retained by
the trustee. The compensation paid to the trustee and any persons
retained by the trustee shall be both reasonable in light of the value
of the Divested Products and based on a fee arrangement providing the
trustee with an incentive based on the price and terms of the
divestiture and the speed with which it is accomplished. After
appointment, the trustee will file monthly reports with the parties and
the Court setting forth the trustee's efforts to accomplish the
divestiture ordered under the proposed Final Judgment. If the trustee
has not accomplished the divestiture within six (6) months after its
appointment, the trustee shall promptly file with the Court a report
setting forth (1) the trustee's efforts to accomplish the required
divestiture, (2) the reasons, in the trustee's judgment, why the
required divestiture has not been accomplished, and (3) the trustee's
recommendations. At the same time, the trustee will furnish such report
to the parties, who will each have the right to be heard and to make
additional recommendations consistent with the purpose of the trust.
The proposed Final Judgment requires that Thomson maintain the
Divested Products separate and apart pending divestiture.
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 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.
V. Procedures Available for Modification of the Proposed Final
Judgment
The plaintiffs and the defendants have stipulated that the proposed
Final Judgment may be entered by the Court after compliance with the
provisions of the APPA, provided that the United States has not
withdrawn its consent. The APPA conditions entry upon the Court's
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
evaluate and respond to the comments. All comments will be given due
consideration by the Department of Justice, which remains free to
withdraw its consent to the proposed Final Judgment at any time prior
to entry. The comments and the response of the United States will be
filed with the Court and published in the Federal Register.
Written comments should be submitted to:
Craig W. Conrath, Chief, Merger Task Force, Antitrust Division, United
States Department of Justice, 1401 H Street NW., Suite 4000,
Washington, DC 20530.
The proposed Final Judgment provides that the Court retains
jurisdiction over this action, and 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 plaintiffs considered, as an alternative to the proposed Final
Judgment, a full trial on the merits of their complaint against
Thomson. The plaintiffs are satisfied, however, that the divestiture of
the assets and other relief contained in the proposed Final Judgment
will preserve viable competition in (1) the nine enhanced primary law
product markets, (2) the markets for the relevant secondary law
products, and (3) the market for the provision of comprehensive online
legal research services. Thus, the proposed Final Judgment would
achieve the relief the government would have obtained through
litigation, but avoids the time, expense and uncertainty of a full
trial on the merits of the complaint.
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--
[[Page 35264]]
(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.
15 U.S.C. 16(e) (emphasis added). As the United States Court of Appeals
for the DC Circuit recently held, 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. See United States v. Microsoft, 56 F.3d
1448, 1461-62 (D.C. Cir. 1995).
In conducting this inquiry, ``the 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.'' \1\ Rather,
\1\ 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, reprinted in (1974) U.S. Code Cong. & Ad. News 6535,
6538.
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absent 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.
United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. para.
61,508, at 71,980 (W.D. Mo. 1977).
Accordingly, with respect to the adequacy of the relief secured by
the decree, a court may not ``engage in an unrestricted evaluation of
what relief would best serve the public.'' United States v. BNS, Inc.,
858 F.2d 456, 462 (9th Cir. 1988), quoting United States v. Bechtel
Corp., 648 F.2d 660, 666 (9th Cir.), cert denied, 454 U.S. 1083 (1981);
see also Microsoft, 56 F.3d at 1460-62. 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. 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.'' More elaborate requirements might undermine the
effectiveness of antitrust enforcement by consent decree.\2\
---------------------------------------------------------------------------
\2\ Bechtel, 648 F.2d at 666 (citations omitted) (emphasis
added); 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).
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 require 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 on its own, as long as it falls within the range of
acceptability or is `within the reaches of public interest.' (citations
omitted).''\3\
---------------------------------------------------------------------------
\3\ United States v. American Tel. and Tel. Co., 552 F. Supp.
131, 150 (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,
United States v. Alcan Aluminum, Ltd., 605 F. Supp. 619, 622 (W.D.
Ky. 1985).
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VIII. Determinative Documents
There are no determinative materials or documents within the
meaning of the APPA that were considered by the United States in
formulating the proposed Final Judgment.
Dated: June 25, 1996.
Respectfully submitted,
Craig W. Conrath,
Chief, Merger Task Force, U.S. Department of Justice, Antitrust
Division, Merger Task Force, 1401 H Street, N.W., Suite 4000,
Washington, D.C. 20530, (202) 307-5779.
Exhibit A
Exhibit A.1
U.S. Code Service
U.S. Reports, L.Ed.
U.S. Digest
Manual of Federal Practice, 4th Ed.
Bankruptcy Law & Practice, 6th Ed.
Bankruptcy (Epstein, Nickels & White)
Corbin on Contracts
Insurance Law (Appleman)
Search & Seizure (Thomson)
Ballantine's Law Dictionary
Auto-Cite
Deering's Annotated California Code
California ADR Practice Guide
California Civil Practice Handbook: Choice Between State and Federal
Courts
California Civil Trialbook
California Litigation By the Numbers Court Rules Companion
California Negligence & Settlement
California Products Liability Law & Practice
California Trial
California Tort Law
Modern California Discovery
Colorado Trial Handbook
Trial Handbook for Connecticut Lawyers
Florida Criminal Practice & Procedure
Florida Evidence 2d
Illinois Jurisprudence
Indiana Appellate Handbook 2d
Kentucky Probate PSL
Kentucky Workers' Compensation PSL
Louisiana Code of Evidence--Annotated
Louisiana Successions
Louisiana Workers' Compensation
Annotated Laws of Massachusetts
Massachusetts Corporations PSL
Massachusetts Domestic Relations PSL
Massachusetts Landlord-Tenant Law
Massachusetts Real Estate PSL
Michigan Criminal Law
Michigan Statutes Annotated
Michigan Digest
New Jersey Criminal Procedure
New York Consolidated Laws Service
New York Wills and Trusts
Ohio Family Law
Ohio Probate
Modern Texas Discovery
Texas Civil Pre-Trial Procedure
Texas Trial and Appellate Practice
Washington Trial Handbook
Exhibit A.2
Michigan Law & Practice
New York Estate Administration
Pennsylvania Law Encyclopedia
Exhibit A.3
California Appellate Reports
California Reports
California Reports Advance Sheets
Washington Appellate Court Reports
Washington Supreme Court Reports
Wisconsin Official Reports
Wisconsin Official Reports Advance Sheets
Exhibit A.4
California Digest
Wisconsin Digest
Exhibit B
Secondary Law Products
U.S. Digest
[[Page 35265]]
Manual of Federal Practice, 4th Ed.
Bankruptcy Law & Practice, 6th Ed.
Bankruptcy (Epstein, Nickels & White)
Corbin on Contracts
Insurance Law (Appleman)
Search & Seizure (Thomson)
Ballantine's Law Dictionary
California ADR Practice Guide
California Civil Practice Handbook: Choice Between State and Federal
Courts
California Civil Trialbook
California Litigation By the Numbers Court Rules Companion
California Negligence & Settlement
California Products Liability Law & Practice
California Digest
California Trial
California Tort Law
Modern California Discovery
Colorado Trial Handbook
Trial Handbook for Connecticut Lawyers
Florida Criminal Practice & Procedure
Florida Evidence 2d
Illinois Jurisprudence
Indiana Appellate Handbook 2d
Kentucky Probate PSL
Kentucky Workers' Compensation PSL
Louisiana Code of Evidence--Annotated
Louisiana Successions
Louisiana Workers' Compensation
Massachusetts Corporations PSL
Massachusetts Domestic Relations PSL
Massachusetts Landlord-Tenant Law
Massachusetts Real Estate PSL
Michigan Criminal Law
Michigan Digest
Michigan Law & Practice
New Jersey Criminal Procedure
New York Wills and Trusts
New York Estate Administration
Ohio Family Law
Ohio Probate
Pennsylvania Law Encyclopedia
Modern Texas Discovery
Texas Civil Pre-Trial Procedure
Texas Trial and Appellate Practice
Washington Trial Handbook
Wisconsin Digest
Exhibit C
Definition of HHI and Calculations for Nine Markets
``HHI'' means the Herfindahl-Hirschman Index, a commonly accepted
measure of market concentration. It is calculated by squaring the
market share of each firm competing in the market and then summing the
resulting numbers. For example, for a market consisting of four firms
with shares of thirty, thirty, twenty, and twenty percent, the HHI is
2600 (302+302+202+202=2600). The HHI takes into
account the relative size and distribution of the firms in a market and
approaches zero when a market consists of a large number of firms of
relatively equal size. The HHI increases both as the number of firms in
the market decreases and as the disparity in size between those firms
increases.
Markets in which HHI is between 1000 and 1800 are considered to be
moderately concentrated, and those in which the HHI is in excess of
1800 points are considered to be concentrated. Transactions that
increase the HHI by more than 100 points in concentrated markets
presumptively raise antitrust concerns under the Merger Guidelines. See
Merger Guidelines Sec. 1.51.
The HHIs for the nine primary law markets are as follows:
------------------------------------------------------------------------
Post HHI
merger increase
------------------------------------------------------------------------
The market for:
Enhanced United States Supreme Court case law........ 5023 959
Enhanced United States statutory law................. 9019 3964
Enhanced California statutory law.................... 8088 3866
Enhanced California case law......................... 4762 1540
Enhanced New York statutory law...................... 8686 3792
Enhanced Massachusetts statutory law................. 8954 4234
Enhanced Michigan statutory law...................... 8702 4196
Enhanced Washington case law......................... 4521 996
Enhanced Wisconsin case law.......................... 5535 2424
------------------------------------------------------------------------
Certificate of Service
I, Keith S. Blair, hereby certify that on June 25, 1996, I caused a
copy of the Competitive Impact Statement, filed this day in United
States v. The Thomson Corporation and West Publishing Company, to be
served on defendants the Thomson Corporation and West Publishing
Company by having a copy mailed, first class, postage prepaid, to:
Wayne D. Collins, Esq., Shearman & Sterling, Citicorp Building, 153
East 53rd Street, New York, New York 10022, Counsel for The Thomson
Corporation.
James E. Schatz, Esq., Schatz Paquin Lockridge Grindal & Holstein
P.L.L.P., Suite 2200, 100 Washington Avenue So., Minneapolis, MN 55401,
Counsel for West Publishing Company.
Dated: June 25, 1996,
Keith S. Blair.
[FR Doc. 96-16891 Filed 7-3-96; 8:45 am]
BILLING CODE 4410-01-M
