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The fledgling Web site, Jurisline, threw in the towel last week in its legal effort to make Lexis’ database of case law and statutes available on the Internet free of charge. With separate lawsuits pending in state and federal court and an appeal of a central issue in the 2nd U.S. Circuit Court of Appeals, Jurisline unconditionally surrendered its key legal claims and agreed to take the Lexis database off its Web site by July 6. Kenneth Chow, one of Jurisline’s founders, said Monday the Web site would meet the July 6 deadline. He added that efforts to replace the deleted materials with opinions and statutes drawn from public domain sources would be made as swiftly as possible, but he was unable to predict how many states the site would have on-line as of July 6. In the spring of 1999, Jurisline’s other founder, Lee Eichen, who like Chow is a 1994 graduate of the University of Pennsylvania Law School, licensed about 160 of Lexis’ CD-ROMs containing all state and federal opinions and statutes and proceeded to offer that material to the public without charge on Jurisline. In licensing the Lexis CD-ROMs, Eichen expressly warranted that he was a lawyer and would use them only for his own research and would not make them available to others. Jurisline’s lawyers, David Boies and Robert Silver of Boies Schiller & Flexner, vigorously attacked those contractual restrictions as a “copyright by contract scheme.” Boies, who has successfully handled the U.S. Justice Department’s antitrust lawsuit against Microsoft, had argued that Lexis could not impose a contract on its customers that limited their right to distribute public domain materials, such as statutes and case opinions, which are not subject to copyright protection. Boies had also contended that Jurisline was simply following a precedent set by Lexis itself when it copied thousands of court opinions published by West Publishing Group before the two companies reached a licensing arrangement in the 1980s. But in a consent “final judgment” filed in New York Supreme Court in Manhattan Monday, Jurisline acknowledged that the licensing agreements signed last spring by Eichen are “valid and enforceable.” The company also accepted an injunction barring it from distributing the Lexis materials now or in the future. The agreement terminated lawsuits the two sides had filed against each other: Jurisline’s in the Southern District of New York last November seeking a declaratory judgment that Lexis’ contract claims were pre-empted by federal copyright law, and Lexis’ suit in State Supreme Court seeking $25 million for breach of contract and fraud. Critical to the outcome may have been a ruling issued in April by Southern District of New York Judge Jed Rakoff rebuffing Jurisline’s claims that the entire case should be tried in federal court. In ordering the state contract claims returned to state court, Rakoff found in Jurisline.com v. Reed Elsevier, 99 Civ. 11860, that the federal copyright statute only pre-empted state claims that are the “equivalent” of federal copyright claims. (Reed Elsevier is the parent company of Lexis). Because the contract claims asserted by Lexis only bound the parties to the contract, he found that they were not the equivalent of copyright claims which are binding against the whole world. The ruling left Jurisline in state court facing a trial on contract claims with at least a preliminary ruling from Rakoff that its federal preemption claims were faulty. State Supreme Court Justice Ira Gammerman had set the case ( Matthew Bender & Co. v. Jurisline.com, Index No. 600369/00) down for trial on July 27. Lexis’ lawyer, Stephen Rackow Kaye of Proskauer Rose said the settlement gave his client everything it was looking for. Although Lexis had given up on its claim for $25 million in punitive damages, Kaye pointed to the fact that Jurisline had transferred its domain names for 48 Web sites to Lexis as being “in lieu of damages.” All of those domain names connote a law Web site through the use of the suffix, “bar,” such as “nybar.” In the heat of litigation, Kaye had suggested that the two young lawyers had put their professional licenses in jeopardy through their fraudulent activities, but as a part of the settlement, the fraud claim was withdrawn with prejudice. Kaye confirmed yesterday that no complaints either had been, or would be, filed with state disciplinary authorities. Chow said that he and Eichen had been acting on the advice of counsel and that the charges of unethical conduct were “background noise to the underlying issues in the case.”

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