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January 26, 1999
Linn's Stamp News Puts Happy Face On
Krause-Scott Lawsuit Settlement

Stuart Morrissey, vice president of Scott Publishing Company, was at least partially right when he said that the settlement of the Scott-Krause Publications lawsuit means that, "...everyone wins, especially the collector." In the article in Linn's Stamp News (February 1) by Rob Haeseler which announces the settlement, everyone seems to be putting a Happy Face on a contentious litigation that was both expensive and time-consuming.

Krause, owners of Stamp Collector, Linn's chief competitor in the philatelic periodical business, published the newest edition of the Minkus U.S. Stamp Catalog about a year ago---and in which the Minkus numbers were cross-referenced with those of Scott. The latter immediately filed suit asking for both injunctive relief and monetary damages. They didn't get the former and whether they ever got the latter is anyone's guess. [Our guess: all Krause will ever pay Scott is a simple licensing fee for use of the Scott numbering system.]

Yes, the collector did "win" with the announcement of this settlement---but so did a lot of other people. And it is more than possible that Haeseler was a bit optimistic when he said that, "Scott defended itself successfully against an all-out attack by Krause's lawyers."

One would have to be living in an Ivory Tower to believe that, in the end, Scott was "successful" in this litigation. Krause had retained the services of the nation's most respected trademark/copyright law firm (Jacobs, Holman and Stern of Washington, D.C.) and filed a 54-page brief challenging practically every aspect of Scott's copyright protection and licensing practices over a seven-decade period.

In the end, the Krause defense of Scott's litigation imposed upon Scott the absolute necessity to review the seriously uneven policing of its licensing policies---and in essence, to cave in to something they never wanted to do: give their chief competitor a license to use their numbering system.

But in a sense, Haeseler was only slightly correct in assuming the success of Scott in this litigation. The settlement avoids a costly jury trial---and the problems that Scott would have had in trying to defend a very sketchy, uneven history of both maintaining the copyrights on its catalogs and licensing widespread use of its numbering system.

One should also take serious notice of a major statement by Morrissey in the body of the Haeseler article: "In the future, Scott will try its best to be flexible in finding appropriate arrangements for those interested in licensing Scott numbers."

Clearly a result of this litigation, this remark represents a sea change in Scott's recent arbitrary policies in licensing its numbering system. It can be hoped that the remark represents Scott's new understanding that these policies have, in recent years, become onerous and life-threatening (from the standpoint of many dealers and small software manufacturers) to many who are involved in the stamp trade.

We read---from cover to cover---the 54-page brief filed by the Krause attorneys when it was placed before the Federal District Court of Southern Ohio in May, 1998. [You can locate documents on this lawsuit right here on the web by going to the KnowX.Com public records search service. There is a small fee.] It was an astute and high-impact tour de force in copyright law as it relates to what some have come to believe was an unfair monopoly by Scott of a numbering system that has long since been in the public domain.

It should be easy for most philatelists to discern that the brief had one key purpose: to force Scott into allowing Krause the use of its numbering system. This it accomplished.

Certainly a very costly lesson for Scott.

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