Reed sues MS and Expedia over travel database

Bust-up over 1998 contract

Reed Elsevier has revealed that it had filed suit against Microsoft and Expedia in the District Court in New Jersey alleging that Microsoft and Expedia breached a 1998 contract with Cahners Travel Group (part of Cahners Business Information).

Under the contract Cahners Travel Group would be the exclusive provider of advertising sales support worldwide for hotel directory advertising on Expedia. The points at issue concern the hotel directory for, as well as the sale of advertising. Microsoft had to disclose that the suit was pending in its SEC filings for its recent IPO, so Cahners decided to reassure its trading contacts by making its own revelation in similar terms. So far there has been no discovery, and no date has been set for a hearing, but Cahners is evidently keen to resolve the dispute because it continues to provide real-time updates of the hotel data. Microsoft may not be in such a hurry, of course, partly as a negotiating ploy but also because it has so much other litigation pending.

The suit accuses Microsoft/Expedia of "conversion and misappropriation" of the Cahners database in the hotel directory, which is based on Cahners hotel-related information, Cahners says, and which is used in its three hotel publications. There is also an allegation of unfair competition.

Cahners is asking for damages and punitive damages, an injunction requiring Microsoft to stick to the contract; an injunction requiring Expedia not to compete with Cahners on selling hotel directory advertising; another injunction stopping Expedia using the hotel database; cancellation of the agreement; and the return to Cahners of what it had paid Microsoft, as well as the information that it provided. The suit has been filed under seal because of strict non-disclosure requirements in Microsoft's contract.

The Register was told by Cahners that it is not expected that the dispute between this trading division of Reed Elsevier and Microsoft would have any effect on the $30-million, six-year Microsoft deal with Reed Elsevier (inter alia, the publisher of Computer Weekly). The Expedia Web site still says on its hotel finding page: "Hotel information provided by Cahners Travel Group". There is a separate and unrelated suit brought by concerning Microsoft's alleged infringement of a Priceline patent. ®

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