By Tiffany Hu
Legal research startup Ross Intelligence can pursue counterclaims that Thomson Reuters uses anti-competitive practices to maintain its subsidiary Westlaw’s market dominance, although it failed to show that the bigger rival pursued “sham litigation” against it, a Delaware federal judge ruled Tuesday.
In a mixed ruling for Thomson Reuters Corp., US District Judge Leonard P. Stark refused to toss out Ross’ counterclaims that Thomson Reuters violated federal antitrust law by illegally tying its legal search tools to its public law database products to block others like Ross from threatening Thomson Reuters’ “monopoly position in the legal search platforms market.”
Ross argued that there were two separate products at issue with independent demand and markets for both, but Thomson Reuters disputed the notion, saying there was no demand for a legal search tool that was not combined with a public law database.
Judge Stark sided with Ross, finding that Thomson Reuters’ public law database was “effectively sold as a stand-alone” book for decades before converting into an online legal search tool. Others have also sold public law databases as “discrete products,” the judge noted.
“Taking Ross’s allegations as true, and drawing all reasonable inferences in Ross’s favor, Ross has sufficiently alleged that public law databases and legal search tools may be two different products instead of one,” the judge wrote.
Judge Stark also refused to dismiss Ross’ California state law unfair competition counterclaim against Thomson Reuters. But the judge did grant Thomson Reuters’ bid to dismiss Ross’ counterclaim that the company pursued “sham litigation” against the startup, finding that Ross failed to identify “any specific litigation that was or is purportedly a sham.”
“It’s important that access to the public law not be dominated by a single firm through forced arrangements to purchase other technology and by overreaching use of intellectual property law,” Warrington S. Parker III of Crowell & Moring LLP, representing Ross, told Law360 in an email Tuesday. “Ross looks forward to moving forward with its counterclaims and demonstrating the ill effects of [Westlaw’s] suppression of competition.”
Counsel for Thomson Reuters did not immediately return a request for comment Tuesday.
San Francisco-based Ross offers a legal research service similar to Westlaw or LexisNexis, but the company claims to offer better search results using artificial intelligence.
Thomson Reuters sued Ross in May 2020, saying it had built that system by unlawfully copying big chunks of Westlaw. Legal documents are not covered by copyrights, but the lawsuit said the rival had copied case summaries and a unique organizational system, both of which were proprietary.
Ross denied copying either of those elements, and it filed a motion to dismiss the case in July 2020. But facing the litigation pressure, Ross said in December that it would cease operations while the case is pending.
In its counterclaims filed last January, Ross said this was exactly what Thomson Reuters intended when it filed the case.
“Ross was ultimately forced to exit the market, becoming the latest victim of Westlaw’s anti-competitive practices,” the company wrote. “Its unfortunate experience illustrates how Westlaw uses exclusionary tactics to harm nascent rivals, deter investment and entry, and protect its market position.”
Thomson Reuters is represented by Jack B. Blumenfeld and Michael J. Flynn of Morris Nichols Arsht & Tunnell LLP and Dale M. Cendali, Joshua L. Simmons, Eric A. Loverro, Daniel E. Laytin, Christa C. Cottrell, Alyssa C. Kalisky and Cameron D. Ginder of Kirkland & Ellis LLP.
Ross is represented by David E. Moore of Potter Anderson & Corroon LLP and Gabriel M. Ramsey, Warrington S. Parker III, Jacob Canter, Mark A. Klapow and Lisa Kimmel of Crowell & Moring LLP.
The case is Thomson Reuters Enterprise Centre GmbH et al. v. Ross Intelligence Inc., case number 1:20-cv-00613, in the U.S. District Court for the District of Delaware.
–Editing by Vaqas Asghar.
