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Software companies' legal battle affects MSU

August 9, 2010

When MSU switched its library cataloging services from one company to another last November, it expected to save money.

But an antitrust lawsuit filed July 27 in U.S. District Court in San Francisco by the company that now provides MSU’s cataloging services against the company whose software formerly was used might change that.

The scenario comes less than a year after MSU switched its cataloging service from nonprofit organization OCLC’s Online Computer Library Center to California-based firm SkyRiver Technology Solutions, LLC. SkyRiver is suing OCLC, arguing the company is attempting to monopolize the library software and technological services industry through fines for uploading items to its database. MSU is mentioned in the suit as an example of OCLC’s alleged illegal practices.

Although MSU still is paying OCLC about $100,000 a year to search its interlibrary loan system — a program that allows libraries to check for documents at other facilities — MSU keeps records of its library’s contents with SkyRiver. MSU formerly kept its catalog through OCLC, but paid $200,000 for the service, not including the $100,000 for using the interlibrary loan system.

Although the change of companies saved MSU’s libraries about $80,000 per year, OCLC allegedly is imposing an increased fee of $31,000 for MSU to upload its records on SkyRiver’s database to OCLC’s could void the savings.

Although OCLC has a larger database of libraries, SkyRiver is less of a cost to MSU, said Nancy Fleck, assistant director for technical services and systems for MSU Libraries.

Fleck said OCLC’s website used to show a 23 cent fee for every item from an outside cataloging service uploaded to OCLC’s software. When the university used OCLC’s cataloging and interlibrary loan system, it was not charged a fee. But after making the switch to SkyRiver, Fleck was informed by OCLC representatives that MSU would have to pay $2.85 for each document uploaded, an equivalent of $31,000 every few months.

She was told the 23 cent rate was for members who paid for OCLC’s cataloging service as well as the interlibrary loan component, and wanted to upload “special projects.”

Fleck said she suspects OCLC purposefully imposed the fine to discourage libraries from using other cataloging services.

“(OCLC) never said who could have (the 23 cent) price, and now they have removed it,” Fleck said.

OCLC spokesman Bob Murphy would not comment on SkyRiver’s lawsuit or on the matter specifically, deferring instead to an official statement. He said the organization’s interloan database contains records from 72,000 libraries in 171 countries.

“We will vigorously defend the policies and practices of the (OCLC) cooperative,” said OCLC’s statement, which was released Friday. The statement also said SkyRiver’s charges are “without merit.”

SkyRiver President Leslie Straus said the group did not expect problems when they began offering services to MSU less than a year ago.

“We started out knowing we were head-to-head competitors, but have no inclination to compete with the interlibrary loan services,” Straus said. “We thought it would work just fine for libraries; we had no idea this was going to happen.”

Currently, MSU faculty and students can use OCLC interlibrary loan system to find materials at other libraries. Still, MSU has not been able to upload any new materials to the database since November 2009.

Fleck said about 30,000-40,000 materials have yet to be uploaded, but the complications are not likely to affect students.

“If you wanted something, we would get it for you,” Fleck said.

MSU pays OCLC annually, and made their latest payment in July. At the time, MSU only paid to be able to search the OCLC catalog, not upload its records onto it. Fleck said the new plan with SkyRiver is working well with MSU’s library system.

“We are quite happy with (SkyRiver),” Fleck said. “We are still a member of OCLC.”

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