Reuters Replaces IM Compliance Technology

Lora Bentley

The U.S. District Court for the Southern District of New York entered summary judgment against Thomson Reuters this week in a breach of contract lawsuit filed by FaceTime Communications in May.


The dispute centered around FaceTime instant-messaging compliance technology that Reuters had licensed since 2006 to use in its Reuters Messaging Service. Reuters' financial customers use the service and the compliance tech to help them meet regulatory requirements that messages about financial transactions be logged, archived and easily retrievable.


According to E-Commerce Times, the license expired on Jan. 31, but Reuters had the option to buy a perpetual license for $150,000 if the payment were made before that date. Reuters missed the deadline and attempted to exercise the option later. Needless to say, the companies' attempts to renegotiate the contract were unsuccessful.


Reuters argued in court that losing the FaceTime technology would disrupt its business and cripple the compliance efforts of its customers, and that it would take months to develop or acquire a replacement. But the judge didn't buy it. In fact, Santa Clara (Calif.) University School of Law professor Eric Goldman notes the judge called it "an open-and-shut case." The court found that the grace period written into the contract expires July 31, and then ruled that Reuters would not have the right to use FaceTime's technology beyond that.


Interestingly enough, despite its earlier argument, Reuters has apparently already made the switch. InformationWeek reported the company announced Wednesday that the technology had been replaced.

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