ACS Responds to Dialog Suit; Files Countersuit Alleging Breach of Contract and Fraud

Hogan, Tom, Information Today

ACS Responds to Dialog Suit

Files Countersuit Alleging Breach of Contract and Fraud

The gloves have come off and the Marquess of Queensberry rules are in jeopardy in what promises to be a protracted bout of legal fisticuffs between two of the top heavyweights in the information industry--the American Chemical Society (ACS) and Dialog Information Services. On August 31st, the ACS filed its response to Dialog's suit (filed on June 7th) which alleges that ACS has violated anti-trust laws by withholding from Dialog certain portions of the chemical information it collects and creates (see Information Today, July/August 1990). At the same time, the ACS filed a counterclaim which alleges that Dialog has, on many occasions, breached its contracts with ACS' Chemical Abstracts Service division (CAS) and engaged in fraudulent accounting practices in order to avoid paying royalties due CAS.

While the original Dialog suit seeks $150 million in actual and punitive damages, the ACS suit seeks a meager $30 million--$10 million in estimated lost royalties and $20 million in punitive damages. [Should we just subtract the one from the other, have ACS pay Dialog the $120 million difference and forget the whole thing ever happened? Not likely.]

Definitions Are Important

One of the first things that the ACS response attempts to do is to redefine some of the terms used in the Dialog suit. In particular, ACS takes issue with the use of the name "Chemical Registry System Database" or "CRSD." The "definition applied by Dialog to the acronym CRSD is an artificial construct created by Dialog to serve its own purposes in the lawsuit," the ACS response reads.

Why is this important? The assumption is that ACS would like the court to view the services that CAS offers as a "collection" of many independent databases rather than as one single comprehensive database. If this view is accepted, then the act of witholding just five or six of these databases (in particular, the full abstracts and the connection table data) from Dialog, while granting …

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Publication information: Article title: ACS Responds to Dialog Suit; Files Countersuit Alleging Breach of Contract and Fraud. Contributors: Hogan, Tom - Author. Magazine title: Information Today. Volume: 7. Issue: 9 Publication date: October 1990. Page number: 1+. © 2009 Information Today, Inc. COPYRIGHT 1990 Gale Group.

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