REUTERS VS. TYPLAN CONTROVERSY

By: Jim Rosenberg The Chronology of Events



While Typlan accuses Reuters of a "persistent and pervasive global scheme of making and using unauthorized and unlicensed copies" of its software "since at least 1989, most of its complaint relates to NewsWorks in recent years. Allegations in the following chronology are extracted from Typlan's original complaint against Reuters Amer-ica Inc., New York, and London-based Reuters Ltd.


Late 1995: Reuters began trying to persuade Typlan to dispense with dongle protection that safeguards against illegal copying. Typlan objected, saying it is too small to police illegal copying worldwide. Its older software uses the plug-in hardware, which permits use of a secure application.


July 4, 1996: Reuters Ltd. said it would not in-stall dongle-protected software. Days later, version 4 software, NewsWorks, was released to Reuters Ltd. for use without a dongle through July 26, with strict, written limits on access and copying.



The last of several extensions expired Dec. 31, 1997, but Reuters Inc. and Reuters Ltd. "continue using unprotected copies of NewsWorks . . . ."



October 1996: Reuters asked Typlan to upgrade Hauppauge to version 4, but Typlan's December proposal drew no response.



Early 1997: A Reuters Ltd. consultant traveled to Hauppauge "for the purpose of installing an unlicensed copy of NewsWorks, v.4. This attempted installation apparently was not successful."



March 1997: Typlan was asked to install a NewsWorks training and test editorial system in Hauppauge to help editorial operations' switch to Fleet. When Reuters America said its budget wouldn't cover the costs of desired programming enhancements and installation and training (totaling approximately $80,000 at contracted hourly rates), Typlan waived them.



Late March: While setting up a requested second test system in Hauppauge on a larger host computer for technical rather than editorial personnel, Typlan technicians found NewsWorks already on the computer - installed correctly but not properly configured, according to Typlan CEO Milan Sulc. If the misconfigured system were run live, he said, it would probably lose part of a story from time to time. Sulc said Typlan technicians deleted the misconfigured system, set up the second system properly and left. Soon after, however, "Reuters America dismantled the NewsWorks Fleet Pilot System," even though adequate training required several months. Reuters America managers seemed little interested in training and "scheduled conflicting appointments abroad."



Mid-1997: Reuters America announced it added PR Newswire to its product offerings and re-ceives and distributes PRN and Business Wire through the second NewsWorks test system, contrary to its stated purpose and agreed-upon terms.



Typlan asserts that Reuters America never in-tended to roll out Fleet with NewsWorks when it asked for the pilot system, which was "merely a ruse" to get Typlan personnel to install it.



Early fall: Typlan "became gradually aware of widespread unauthorized copying and unlicensed use" of NewsWorks by Reuters. (Typlan attorney Bryan Harrison wouldn't comment on how this occurred, other than to say that "things just didn't add up - [things] that they were being told.")



Oct. 23: Typlan showed "specific evidence" of this and "other significant breaches" of its agreements to Reuters Ltd. senior management. It also gave Reuters a written estimate showing that all breaches resulted in approximately $6.2 million owed to Typlan.



November: Finding unlicensed uses that in-cluded a message-switching system and 152 work-stations, Reuters paid for 32 editorial and 22 technical-support workstation licenses in London and asked Typlan to submit invoices for the remainder. But Reuters never provided the necessary orders for the unlicensed copies or information to enable Typlan to calculate how much it was owed.



Typlan says the letter did not address all unlicensed uses. It says it notified Reuters of a live NewsWorks message-switching system at another London site and 35-40 live positions in Singapore but never received orders or payment.



Dec. 23: Reuters SA connectivity counts were submitted late and "failed to include substantial numbers of known installations" of software versions 3 and 4, including any NewsWorks installation or related connectivity in the U.S. Typlan invoiced Reuters for 1998 licenses of reported installations and advised Reuters of instances of unreported version 3.



January 1998: Reuters America asked to buy a NewsWorks server system upgrade and four work-station software copies - which "mirrored" the unlicensed system improperly installed in Hauppauge. Asked for more information to calculate a price, Reuters never responded.



February: Two weeks after it was to have submitted a detailed connectivity count certified by its head of internal audit, Reuters said it was reviewing its 1998 count's accuracy - a delay Typlan called "incomprehensible" because its software's supervisor function returns accurate counts seconds after a request is made.



A week after Reuters said it was reviewing the accuracy of its count, Typlan terminated its version 4 agreement and told Reuters to stop using the software. Reuters had paid less than 15% of the amounts invoiced for annual license fees. A few days later it also terminated the version 3 agreement.



Feb. 23: Typlan received $1.3 million from Reuters, "representing the major part" of the invoices for 1998 license fees. Reuters was still using the software.



March 10: Typlan filed a federal-court suit against Reuters' U.S. and U.K. subsidiaries.