US legal ruling hits Reed shares

Shares in the Reed Elsevier, the Anglo-Dutch media giant, fell heavily yesterday on fears that the company would suffer some fallout from news that the rival legal publisher, West Publishing, had lost much of its US copyright protection in a Federal court ruling.

Reed was also hit by a downgrade of its shares by analysts at Merrill Lynch, sending its price tumbling 3 per cent to 607.5p - wiping more than pounds 200m off its stock market value.

Mark Armour, Reed Elsevier's chief financial officer, said: "We believe that the impact will not be significant, even if the ruling is not overturned on appeal."

The ruling arose from a copyright dispute between West Publishing, bought by publishing giant Thomson last year, and US rival HyperLaw. West argued that HyperLaw infringed its copyright after HyperLaw electronically scanned court judgment documents belonging to West and resold them.

However the Federal District Court in Manhattan ruled against West, saying that because the information in the documents was already in the public domain, there was no copyright issue.

Reed which bought over 40 legal publications from Thomson in January, said that its own electronic legal publishing business Lexis, part of Lexis-Nexis bought for $1.5bn (pounds 920m) in 1994, was not at risk of losing customers. Mr Armour said: "We are not relying on copyright for the sales we make to customers. The value of Lexis-Nexis is the comprehensiveness of its legal databases."

He said that copyright protection had only been lost on court judgments. "What is not at issue is copyright over summaries or commentaries that surround these judgments."