InfoTech: SkyRiver and Innovative Interfaces Sue OCLC
Sep 1, 2010SkyRiver and Innovative Interfaces Sue OCLC
Bibliographic services company SkyRiver Technology Solutions, joined by library automation company Innovative Interfaces, Inc., filed a lawsuit July 28 in federal court in San Francisco against OCLC, alleging anticompetitive business practices.
The move initiates a major legal battle between OCLC, a worldwide library membership organization, and two companies owned and founded by Jerry Kline. It also represents the culmination of concerns expressed by some vendors and librarians that OCLC has used its tax-exempt status as not only a giant library utility but a hard-nosed business.
On August 5, OCLC stated that the lawsuit was "without merit" and that OCLC planned to "vigorously defend the policies and practices of the cooperative." (See the full statement below.)
Given the 72,000 libraries involved with OCLC and the organization's breadth of products and services, the legal action raises enormous implications regarding the library automation and bibliographic services industry sectors.
Though SkyRiver, a relatively new and small start-up, leads the lawsuit, with the backing of Kline and Innovative Interfaces, OCLC faces plaintiffs with the means to go forward.
OCLC has strong supporters as well as sharp critics, and this case has already sparked debate within the library world.
Wide-ranging complaint
The complaint describes four sectors of activity in which OCLC is involved: cataloging services, bibliographic data services, interlibrary lending, and integrated library systems.
The 39-page document provides a lengthy description of the plaintiffs' understanding of OCLC's activities and argues that these practices amount to illegal anticompetitive monopolies and harm firms like SkyRiver and Innovative.
The complaint asserts that OCLC responded to the launch of SkyRiver with "predatory" pricing for batch loading records created through this competitive service. The chief example involves Michigan State University (MSU), an early adopter of SkyRiver's bibliographic services (see LJ coverage here).
Although MSU withdrew from its use of OCLC's cataloging service, the university remains an OCLC member and has maintained its paid subscription to OCLC's interlibrary loan service. Rather than charge the nominal fee that MSU expected for batch loading records cataloged though SkyRiver, OCLC responded with a quotation for a much higher-priced service that would eliminate any savings gained through the use of SkyRiver.
At the time, OCLC VP Cathy DeRosa said, "OCLC membership is based on two things: an institution's desire to contribute for broader use and [its] active participation in sharing those resources."
ILS vendors, bloggers react
The suit claims that OCLC's recent entry into the integrated library system (ILS) market, with its cloud computing–based ILS Web-scale Management Services (WMS), is likewise supported by its monopolies in other business sectors.
ILS vendors contacted by LJ for comment have taken a wait-and-see attitude but essentially support more competition.
Bill Schickling, president and CEO of Polaris Library Systems, said that "eliminating choice for libraries for anything—for ILS, or for any of the products or services they need—is not good for libraries."
Gary Rautenstrauch, CEO of SirsiDynix, told LJ, "We cannot comment on the specifics of the legal proceedings, however, I've always believed that competition is good for libraries and, in turn, for library users."
Carl Grant, president of Ex Libris North America, called OCLC "a major asset for the library profession" but warned that the cooperative was leveraging its assets built by a membership organization to meet its goals as a vendor.
Vinod Chachra, president and CEO of VTLS, told LJ, "Over the years, I have felt that some of the practices that OCLC has aren't conducive to the growth of some other businesses. On the other hand, [OCLC does] provide a very important, essential service that smaller organizations simply couldn't do." Asked what he thought would emerge from the suit, Chachra predicted "some course adjustment."
Similarly, academic librarian and Free Range Librarian blogger Karen Schneider commented on an LJ Insider blog post, "Ideally, OCLC will prevail in court but take this as a cautionary tale that will help accelerate the positive changes we have been seeing in the last couple of years." Urging dialog, she observed on her blog, "We ARE OCLC."
Librarian and consultant Karen Coyle, on her blog Coyle's InFormation, suggested that the case contains two potential "smoking guns": the claim that OCLC is using differential pricing "to specifically prevent OCLC members from becoming SkyRiver customers" and that "OCLC paid cash ‘inducements' to university officials and paid for ‘luxury trips to expensive resorts to obtain [its] commitments to promote OCLC products.' "
Coyle was skeptical about other parts of the complaint, however, such as the assertion that OCLC is "rapidly gaining market share in the ILS market," and was puzzled by "the repeated insistence that OCLC should give access to the WorldCat database to potential competitors."—Marshall Breeding and LJ Staff
OCLC: Suit Is a "Regrettable Action"
Here is the full August 5 statement from Larry Alford, the chair of the OCLC Board of Trustees, and OCLC CEO Jay Jordan:
"On July 29, SkyRiver Technology Solutions and Innovative Interfaces, Inc. filed suit against OCLC, alleging anticompetitive practices. We at OCLC believe the lawsuit is without merit, and we will vigorously defend the policies and practices of the cooperative.
"OCLC's General Counsel, working with trial counsel, will respond to this regrettable action by SkyRiver and Innovative Interfaces following procedures and timetables dictated by the court. This process will likely take months or even years, not days.
"In the meantime, we want to assure the OCLC membership and all 72,000 libraries that use one or more OCLC services that these spurious allegations will not divert us from our current plans and activities. These include maintaining and enhancing existing services, pursuing an ambitious agenda in library research and advocacy, and introducing new Web-scale (cloud) services. Indeed, OCLC has been a global leader in providing cloud-based services for libraries since 1971, and the next generation of these services holds great promise for reducing member library costs.
"It is worth noting that our current strategy represents a collective effort by librarians around the world, developed through ongoing dialogue and consultation with the Board of Trustees, Global Council, and Regional Councils in the Americas, Asia Pacific, and Europe, the Middle East and Africa. We will continue our active engagement with OCLC members and governance participants as, together, we move our cooperative forward.
"Inclusion, reciprocity, trust and the highest standard of ethical conduct have guided the OCLC cooperative in the past and will guide us in the future. As always, OCLC's public purposes of furthering access to the world's information and reducing the rate of rise of library costs remain paramount."
LC Creates National Digital Stewardship Alliance
The Library of Congress (LC) announced the formation of the National Digital Stewardship Alliance (NDSA), as a partnership of institutions and organizations nationwide that will focus on the preservation of digital content, including developing preservation standards and practices.
NDSA is an outgrowth of—and seeming budget-conscious successor to—the National Digital Information Infrastructure and Preservation Program (NDIIPP), an LC-administered program established in 2000. Partners in NDIIPP were invited to join NDSA, and 53 organizations were listed as members as of July, including OCLC, the Internet Archive, and North Carolina State University Libraries.
NDSA was created in part to continue meeting the goals of NDIIPP through a collaborative, distributed approach but without additional large expenditures. The U.S. Congress appropriated $100 million for NDIIPP in December 2000 and has since funded digital-preservation projects nationwide. No funding remains from that initial appropriation, but NDIIPP still receives an annual appropriation of $6.5 million.
"It is clear to everyone that we need to leverage our collective resources—which are limited, even in the aggregate—to do the work that is necessary for digital preservation across the country," William LeFurgy, the digital initiatives project manager for NDIIPP, told LJ. "We are looking to NDSA to expand this effort in a cost-effective manner."
To that end, NDSA partners are asked to commit staff time to one or more working groups dedicated to areas such as contributing content, developing standards, creating a preservation infrastructure, supporting digital-preservation technology research, and outreach.
Partners will team up with experts from LC, universities, businesses, and federal agencies to determine what digital content is worthy of preservation. To exchange ideas, the partners will use collaborative digital technology, including electronic mailing lists, websites, and teleconferencing, which would be supported by NDIIPP.
NDSA partners will begin working on a roadmap for immediate action starting this month. One key urgent goal, LeFurgy said, is to add new members, and NDSA hopes to begin doing so by the end of the year.
Yale University Library 28th to Join HathiTrust
Yale University Library has become the 28th research library partner with HathiTrust, a collaborative repository for digital materials (hathitrust.org.)
By October, Yale is aiming to deposit initially some 29,000 books that have been digitized with support from Microsoft and the Yale University Provost's Office.
Yale has approximately 13 million volumes in its collection. It is a member of the Association of Research Libraries.
UM Search Matches Users with Specialists
When patrons do a search on the University of Michigan (UM) Library website, they get a list of results from the library catalog, the online journal collection, and other databases. But they also get the names, photos, and contact information of UM librarians who specialize in the subject at issue, as well as links to relevant on-campus locations or library services.
The UM Library uses a database that matches Library of Congress call numbers to various academic disciplines. The call numbers of the first 100 results in a search are matched to these disciplines, and if more than 25 items fall into a specific area of expertise, a specialist is included in the results.
Keywords also have been added that produce results including buildings on campus or other library services. For example, a search on the word biology will yield pictures and contact information for two UM science librarians, as well as information on UM's Shapiro Science Library. Search for interlibrary loan, and a specialist in library science will pop up, as well as links to ILL service within UM and for other libraries.
How often do patrons use the service and contact the specialist librarians? Ken Varnum, the web systems manager at the UM Library, told LJ that he has noticed that patrons have been clicking on links to specialists' online profiles from search results, which he said is "a good start."
