McGraw-Hill Files Answer in Federal Case

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McGraw-Hill makes admissions in 2009 lawsuit charging that it unlawfully accessed RCD’s data for attempted competitive advantage

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Reed Construction Data (RCD), a leading construction information provider and a wholly-owned subsidiary of Reed Elsevier (NYSE:RUK, NYSE:ENL), today announced that McGraw-Hill Construction Dodge (MHC), a unit of The McGraw-Hill Companies, Inc. has admitted to some of the most serious allegations made in RCD’s 2009 federal lawsuit in which RCD alleges that Dodge unlawfully misappropriated RCD’s confidential and trade secret information and used that information in an attempt to gain a competitive advantage.

The lawsuit, filed Oct. 8, 2009, in the U.S. District Court for the Southern District of New York (case number 09 Civ. 8578 (RWS)), charged that Dodge since 2002 used a series of fake companies to pose as RCD customers and gain unlawful access to RCD’s confidential construction project information database.

In documents filed in federal court on Oct. 22, 2010, McGraw-Hill admitted that it paid third parties to access RCD confidential and trade secret information, data reserved for RCD’s paying clients. McGraw-Hill also admitted that it used this access to share RCD’s confidential information with its sales force. RCD’s lawsuit alleges that MHC’s ultimate goal in conducting these activities was to gain an unfair advantage in the marketplace. Among the admissions in McGraw-Hill’s filing:

  • Third parties acting on behalf of McGraw-Hill purchased subscriptions to RCD’s Reed Connect product from 2002 to 2009.
  • McGraw-Hill reimbursed the third parties for the cost of the subscriptions and paid a fee for their work. Some payments were made to one of the parties through the McGraw-Hill Federal Credit Union.
  • Using login information obtained by its paid third parties, McGraw-Hill analyzed and performed comparisons of the confidential project information available on Reed Connect, which comparisons it used to compete with RCD in the marketplace.
  • Images and demonstrations of Reed Connect were shown to members of MHC’s sales force.
  • MHC employees viewed RCD’s project reports for specific construction projects listed on Reed Connect and documents obtained from Reed Connect relating to specific projects.

Because of this and other conduct, RCD alleges that McGraw-Hill was able to make misleading claims that its products were superior to RCD’s, thus preventing companies from making fair and objective comparisons of RCD’s and McGraw-Hill’s products.

Iain Melville, CEO of Reed Construction Data, said: “McGraw-Hill has admitted accessing our proprietary system, admitted reviewing our data, and admitted downloading that data, yet they deny that they did anything wrong with the data. RCD firmly believes that McGraw-Hill acted inappropriately in obtaining and using RCD's confidential and proprietary data in an attempt to gain unfair advantage in the marketplace. We intend to vigorously pursue our claims against MHC in court.”

The RCD suit seeks an unspecified amount in lost profits and punitive damages, trial by jury, and injunctive relief as a result of McGraw-Hill’s misuse of RCD’s proprietary construction project information.

For more information, please visit http://www.reedconstructiondata.com/mhcdodgesuit.

About Reed Construction Data
Reed Construction Data, a wholly-owned subsidiary of Reed Elsevier, is a leading North American provider of construction information through a diverse portfolio of innovative products and services. Reed Construction Data offers its customers building information modeling (BIM) solutions, construction project leads, building product information, construction cost tools, market analytics and B2B marketing resources. For more information, visit reedconstructiondata.com.

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