Piracy, Dumping, Breach of Contract

Article excerpt

Trio of tort allegations target publisher, software developer, and foreign press manufacturers

No sooner was a prepress software developer's lawsuit against the largest U.S. metro daily settled than a pressroom hardware manufacturer filed complaints against all its major competitors in a replay of a 5- year-old international trade dispute. All the while, another major daily pursued a Canadian software vendor, which has countersued.

Last fall, CE Engineering Publishing Systems Inc., a small, Loomis, Calif., software developer, sued its biggest customer over its biggest sale -- litigation that has since been settled. Among its complaints were that the Los Angeles Times had infringed CE's intellectual property and breached its licensing agreement for CE software.

CE president Robert Waterhouse said his 35-person firm discovered the 1,153,706-circulation daily's unauthorized use of its software in late 1998. The Sacramento Business Journal reported that CE ceased supporting the Times installation after settlements talks ended.

Asking a federal district court in Sacramento to award treble actual damages it estimated to be at least $1.8 million, CE alleged that the Times had made unauthorized copies of its Decade software, including some diverted to other publications owned by parent Times Mirror Co.

Decade software puts the functionality of the widely used System Integrators Inc. Coyote terminals into Windows PCs and Macs. In early 1995, CE licensed Decade to the Times, where it replaced SII Coyote terminals. In addition to 1,100 newsroom computers, the product was licensed to run on 500 laptop or home computers -- for a total of 1,600 copies to be used by no more than 1,100 authorized users at $2,000 each.

Some SII users had been asking for such products, but SII was then writing for OS/2 and declined to offer a Macintosh version. Headquartered in nearby Sacramento, SII sued CE, alleging illegal use of proprietary technology. That suit (SII's second against CE) was settled; the Times installation proceeded. CE's popular product is in use at numerous other SII customer sites.

Details on the settlement between CE and the Times, reached earlier this year, have not been disclosed. Neither the paper's in-house counsel nor its editorial systems manager returned calls for comment.

The Times continues using CE software "and will probably use it for the next couple of years," Waterhouse said earlier this month, just after the paper had signed a software maintenance agreement.

On the news side, the Times uses SII, CE, and Harris software, but signed with CCI-Europe for its NewsDesk editorial and pagination system. The paper's 1,000 concurrent users will make it the Danish company's biggest installation, which is expected to be complete by summer of 2001.

In a case that appeared to have been administratively resolved in its favor several years ago, Goss Graphic Systems, Westmont, Ill., filed suit two months ago against the two German and two Japanese manufacturers with which it competes for sales of double-wide newspaper presses.

Goss blames the defendants for its 1999 bankruptcy.

In the summer of 1995, Rockwell International's Graphic Systems division (since spun off as privately held Goss Graphic Systems) petitioned the U.S. Commerce Department and U.S. International Trade Commission (ITC) to levy antidumping duties on large presses imported by the four competitors, alleging they were being sold below their fair value.

Though its petition was successful, the German firms continued to do brisk business in the United States. Mitsubishi, whose big sale to The Washington Post sparked the action by Rockwell-Goss, has sold no presses since the duties were imposed. But last year, Goss asked for, and the government granted, an exemption from duties owed on Mitsubishi Heavy Industries presses that match the description of those at the Post (E&P, Sept. …