KEYSTONE GOES TO THE MARKET FOR £11 MILLION - AND CLOSES ON MAGIC CIRCLE
Legal PMS software developer Keystone Solutions Group today (Friday 16) announced it had raised approximately £11.9 million (approximately £11.05 million net of expenses) via a placing of 70 million new ordinary shares at 17p per share, of which 33 million of the new ordinary shares are the subject of an open offer. In addition, Keystone also announced an immediate cash placing to raise £357,000 for the company.

The funds raised through the placing and open offer will be used to strengthen the balance sheet and provide working capital to support the group's commercial operations. A cost reduction programme is being undertaken, in particular focusing on the overhead cost structure inherited with the BISPoint acquisition in the United States and implementing measures to standardise operations globally. The directors believe the financial benefit of this exercise will begin to be realised in the financial year ending 31 March 2002. On the strength of last year's trading figures, Legal News Media estimates that Keystone currently has a £400,000 a month burn rate (the amount a company spends each month exceeding its revenues).

The new funds will also be used to develop the new business pipeline. On completion of the fundraising, Claes Hultman, currently chairman of Wembley plc, will be appointed non-executive chairman. The placing and open offer have been fully underwritten by Investec Bank (UK) Limited.

Meanwhile reports suggest that Keystone is in the closing stages of a race to get its software selected as the new PMS platform for two of the UK's "magic circle" law firms. At Linklaters, Keystone's competition includes the incumbent supplier ResSoft while at Clifford Chance, Keystone is down to a two horse race with CMS Open. At both firms Keystone is involved in a joint bid with Oracle Financials.

HORWATH & CMS PUT PRESSURE ON KEYSTONE
Meanwhile Australia-based Horwath Computer Systems (HCS), which was recently acquired by Solution 6 Holdings group, has just announced that it has signed up four new clients for the Solution 6 CMS Open practice management system.

Sydney law firms of Moray & Agnew and Dibbs Crowther & Osborne have both signed contracts to purchase and implement the CMS Open PMS product and to convert from their existing Locus systems. Dibbs Crowther & Osborne selected CMS Open to facilitate their merger with Barker Gosling who are already a CMS Open client. The Melbourne law firm of Macpherson + Kelley have also signed contracts to implement CMS Open to replace their BHL e-practice management system. And the fourth contract signed by HCS was with GAB Robins who selected CMS Open to track the time of their teams of loss adjusters.

A CMS spokesman told Legal News Media that these latest contracts now confirm CMS Open as the number one PMS supplier in the Asia Pacific region "ahead of Keystone in its home territory".

Solution 6 Holdings has also announced that Mayer Brown & Platt, the 7th highest revenue grossing law firm in the United States, has selected CMS Open for its new PMS platform. The firm has been a client with Solution 6 since 1991 and previously ran the CLO*2 product, a predecessor to CMS Open.

HUMMINGBIRD IN WESTLAW DEAL
In the United States, Hummingbird has just announced an alliance with the legal publisher West Group that will see the two companies providing customised research and knowledge management portals for law firms and inhouse legal departments. The deal will involve the integration between West's Westlaw Intranet Solutions range and Hummingbird's EIP (enterprise information portal) system.

THE NAPSTER CASE
The decision in the Napster MP3 copyright case was published earlier this week and exhaustively discussed in the popular press. We agree with the view that this is largely a hollow victory in that even if Napster is ultimately closed down, some Son-of-Napster service (we already have Gnutella, Frrenet and Mojonation lurking in the wings) will soon spring up to provide a similar facility.

The position now is that a federal appeals court in San Francisco (the 9th US Circuit Court of Appeals) has said Napster must stop trading copyrighted material and may be held liable for copyright-law violations - under the principle of secondary or vicarious liability - if it doesn't monitor its users but will be allowed to stay in business until a lower court clarifies an earlier injunction against the company. The court's decision can be found on the web at www.ce9.uscourts.gov in the "opinions" section. Napster has said it plans to appeal against the decision.

Meanwhile we think one of the most sensible comments to arise from the decision were those made by the new media commentator Don Tapscott in Thursday's (15 February) Wall Street Journal. According to Tapscott, if the music introduced some form of micropayments system for online transactions - so that web users could pay just a few dollars, or even a few cents, to buy and download one or two tracks from a CD - the music industry would be in a position to turn the internet into a legitimate distribution channel.

Meanwhile, in a related development, the European Parliament has agreed a compromise deal on a new copyright directive that will allow a limited amount of private copying while closing a loophole that could have opened the way to Napster-type services operating in the UK.

According to Frances Lowe, director general of British Music Rights - a group acting for UK music creators, publishers and collecting societies: "Although the Parliament only voted through a minimum number of amendments, we are satisfied with the improvement this has made to the scope of the private copying exception. It is now restricted to copies made by an individual for private use and non-commercial ends. It is also subject to the limitation that copying is only permitted in certain special cases which do not conflict with normal exploitation or prejudice the interests of the rightsowners.Ê

"A line has been drawn so that the European copyright legal framework mirrors that of the US which has just confirmed the illegality of copying enabled by file-sharing service Napster. We are now looking ahead to the implementation of the Directive into UK law to ensure that British creators' rights are protected to the highest level."

KOURNIKOVA CASE ARREST
A 20-year-old Dutch citizen has been arrested by police in The Netherlands on suspicion of being the author of this week's Anna Kournikova virus. Dutch privacy rules means his identity has not been disclosed however he is under investigation for offences involving damaging computer programs and property. If convicted, the maximum penalty is four years in jail.

BARNES & NOBLE WINS ROUND AGAINST AMAZON
A US federal appeals court has lifted a preliminary injunction imposed in 1999 that barred online booksellers Barnes & Noble.com from using a "one click" ordering system on its web site. The injunction arose from a patent infringement lawsuit filed by Amazon, which claimed that the Barnes & Noble Express Lane utility infringed Amazon's 1-Click online shopping system, which removes the need for online shoppers to complete long registration and shipping forms each time they buy something off the same web site.

Barnes & Noble has always disputed the allegations and the case has given rise to widespread interest in the scope for patenting business methods. By coincidence Centaur is running a conference on this topic in London on 21st March. For details call 020 7970 4818. The full registration fee is £447 + VAT.

MICROSOFT NOW IN HOT WATER OVER WORDPERFECT DEAL
Falling into the "you just can't win" category comes news that US antitrust officials have opened a new investigation into the activities of Microsoft. This time the subject is last October's decision by Microsoft to make a $135 million strategic investment in the troubled Corel Corporation. The US Justice Department is looking into allegations that the investment could reduce competition in the bundled office software package world, where Microsoft Office already enjoys a 90 percent share.

Industry watchers suggest that, ironically, far from reducing choice, the Microsoft investment is likely to guarantee that Corel WordPerfect Office suite remains a viable competitor to Microsoft Office. The DoJ has also announced plans to investigate Microsoft's recent purchase of Great Plains Software. Meanwhile the main DoJ antitrust case is scheduled to return to court, with both sides arguing the case before a seven judge appellate panel, on 26th and 27th February.

JOBS BOARD GOES LIVE NEXT WEEK
Legal News Media next week launches its Legal Technology Jobs Board. This will be a free facility on the Legal Technology Online web site for both legal IT suppliers and law firms looking for staff, as well as for individuals looking for employment or switch jobs.

Development staff, sales staff, web site designers, trainers and inhouse support staff - if you are looking for legal IT related staff, from programmers through to board level directors, just email the vacancy through to info@legaltechnology.org and we will post it onto the site.

There will be no charge for posting details - nor will we be looking for any introducer fees or agency commission. Employees submitting CV details can opt to remain anonymous and jobs will be listed in date order, with posting being automatically removed after 60 days unless otherwise notified.

LEGAL TECHNOLOGY NEWS.COM - FROM THE PUBLISHERS OF LEGAL TECHNOLOGY INSIDER. NEXT ISSUE 22.02.2001