Settlement Reached in Unfair Trade Practices Lawsuit
25 June 2000
Settlement Reached in Unfair Trade Practices Lawsuit Brought By Motor Information Systems
TROY, Mich. - MOTOR Information Systems announces a settlement of the unfair
trade practices lawsuit the company brought against W.G. Nichols, Inc. over
the sales and marketing tactics Nichols employed to market its 20-Year Labor
Guide to the owners of vehicle repair and service businesses. The settlement
severely limits the claims Nichols can make in regard to its relationship with
the defunct Chilton Company or its Professional Automotive Division.
MOTOR Information Systems, a unit of Hearst Business Publishing, publishes
parts and labor guides, crash estimating guides and mechanical repair manuals.
MOTOR owns the copyrights to the labor times, which were developed and
published by the professional Automotive Division of the Chilton Company.
Motor purchased the assets of the Chilton Professional Automotive Division in
1997; Nichols only bought the assets of the Chilton Company's Consumer
Automotive Book Division in 1997.
Hearst filed the lawsuit after MOTOR received, investigated and verified
complaints from independent sales distributors and their customers that
Nichols was misrepresenting its new 20-Year Labor Guide in its sales and
marketing programs. MOTOR's lawsuit charged Nichols was claiming to be the
same company or a direct successor to the former Chilton Company and to have
been in the automotive publishing business for 75 continuous years. The
lawsuit also charged that Nichols claimed its guide contained original Chilton
labor times and updates of original Chilton labor times. Additionally, the
suit charged that Nichols was making false statements about MOTOR including
allegations that MOTOR was not authorized to publish labor manuals under the
Chilton name from 1997 through June 1999, that MOTOR did not own copyrights to
the original Chilton labor times, that MOTOR's 2000 Labor Guide did not
contain original Chilton labor times created by Chilton prior to June 1997,
that Nichols had sued MOTOR over MOTOR's use of the Chilton name and that
MOTOR had paid a monetary settlement to Nichols as a result.
Judge Denny Chin of the United States District Court, Southern District of
New York issued a Preliminary Injunction Order on December 9, 1999. The
settlement, reached on June 22, extends the terms of that injunction through
December 31, 2002. Although Nichols has a license to use the Chilton
trademark, Judge Chin stated:
"Nichols is not Chilton. Nichols merely purchased the assets of one
Chilton division before Chilton went out of business. Nichols's Labor
Guide will not contain Chilton time. Nichols's labor times created by
former Chilton editors who now work for Nichols are not 'Chilton time.'
Hearst owns the copyrights to Chilton time and therefore it has the
exclusive right to publish that information in its MOTOR Labor Guide."
MOTOR Vice President and General Manager Kevin Carr announced the
settlement, praising it as a victory for repair and service business owners
who were confused by Nichols's claims.
"This settlement ensures that W.G. Nichols cannot appear to potential
buyers of the Nichols Labor Guide that they are the Chilton Company," Carr
said. "They cannot represent that the Nichols Labor Guide is the same or an
updated version of the labor guides published by the Chilton Company simply
because they have a license to use the Chilton name."
In the ruling, Nichols is prohibited from disseminating in advertising or
promotion any claims, directly or by implication that:
* Nichols is the same company or is the direct successor to the former
Chilton Company that was founded in 1922.
* Nichols has been in the automotive publishing business for 75 continuous
years.
* The Nichols Labor Guide contains the original Chilton labor times
created by Chilton prior to 1997.
* The Nichols Labor Guide contains updates of the original Chilton labor
times created by Chilton prior to 1997.
* From 1997 to 1999 MOTOR was not authorized to publish professional labor
manuals under the Chilton name and specifically that MOTOR was not
authorized to publish Chilton labor times.
* MOTOR does not own the copyrights to the original Chilton labor times
created by Chilton prior to June 1997.
* MOTOR's labor guide does not contain original Chilton labor times.
* Nichols successfully sued MOTOR over MOTOR's use of the Chilton name,
resulting in MOTOR settling the case or paying a sum to Nichols.
The court also ordered that the appearance of Nichols labor guides should
not give the impression of being the latest updated version of the original
Chilton Labor Guide containing Chilton labor times. Until the 2003 edition,
the colors traditionally associated with the Chilton labor guides cannot be
used and the guides must also contain the following words on the cover: "All
Labor Times by Nichols Editors." Nichols is further required to state in its
Web site and all advertising and promotion materials: "All Labor Times
Developed by Nichols' Editors"
Carr said, "Requiring that Nichols clearly identify their labor guide as a
Nichols Labor Guide developed by Nichols editors will ensure that prospective
buyers know the true source of the labor times the guide contains. We will be
vigilant to assure that Nichols complies with this order."