United States of America vs. The Thomson Corporation and West Publishing Company; Proposed Final Judgment and Competitive Impact Statement

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