[Federal Register Volume 60, Number 174 (Friday, September 8, 1995)]
[Notices]
[Pages 46861-46870]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22266]



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DEPARTMENT OF JUSTICE
Antitrust Division


United States v. Computer Associates International, Inc. and 
Legent Corporation; Proposed Final Judgment and Competitive Impact 
Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment and 
Competitive Impact Statement have been filed with the United States 
District Court for the District of Columbia in a civil antitrust case, 
United States v. Computer Associates International, Inc. and Legent 
Corporation, Civil No. 95 CV 1398.
    On July 28, 1995, the United States filed a Complaint seeking to 
enjoin a transaction by which Computer Associates agreed to acquire 
Legent. Computer Associates is the world's largest independent vendor 
of computer software for mainframe computers and a leading producer of 
mainframe computer systems management software. Legent is CA's major 
competitor in the mainframe computer systems management software 
business. The Complaint alleged that the proposed acquisition would 
substantially lessen competition in the sale of VSE tape management 
software, VSE disk management software, VSE security software, VSE job 
scheduling software, VSE automated operations software, and cross-
platform systems management software in violation of Section 7 of the 
Clayton Act, 15 U.S.C. 18.
    With respect to the five VSE markets, the proposed Final Judgment 
requires Computer Associates to license Legent's VSE products to a 
person determined by the United States to have the capabilities and 
resources needed to use the licenses as a viable and effective 
competitor. If CA is unable to identify a viable licensee that is 
satisfactory to the Department of Justice, the Court may appoint a 
trustee to carry out the licensing. With respect to the cross-platform 
systems management software market, the proposed Final Judgment forbids 
CA for five years from taking any action to restrict any other person's 
access to Peer Logic's key cross-platform systems management 
technology, called ``PIPES.'' A Competitive Impact Statement filed by 
the United States describes the Complaint, the proposed Final Judgment, 
and remedies available to private litigants.
    The public is invited to comment to the Justice Department and to 
the Court. Comments should be addressed to John F. Greaney, Chief, 
Computers and Finance Section, U.S. Department of Justice, Antitrust 
Division, 555 4th Street, NW., Room 9901, Washington, DC 20001 
(telephone: 202/307-6200). Comments must be received within sixty days.
    Copies of the Complaint, proposed Final Judgment, and Competitive 
Impact Statement are available for inspection in Room 207 of the U.S. 
Department of Justice, Antitrust Division, 325 7th Street NW., 
Washington, DC 20530 (telephone: 202/514-2481), and at the Office of 
the Clerk of the United States District Court for the District of 
Columbia, 333 Constitution Avenue NW., Washington, DC 20001. Copies of 
these materials may be obtained upon request and payment of a copying 
fee.
Constance K. Robinson,
Director of Operations.
    In the matter of: United States of America, Plaintiff, v. 
Computer Associates, International, Inc., and Legent Corporation, 
Defendants. Civil Action No. 1:95CV01398. Filed: July 28, 1995.

Stipulation

    It is stipulated by and between the undersigned parties, by their 
respective attorneys, that:
    1. The Court has jurisdiction over the subject matter of this 
action and over each of the parties hereto, and venue of this action is 
proper in the District of Columbia.
    2. The parties consent that a Final Judgment in the form hereto 
attached may be filed and entered by the Court, upon the motion of any 
party or upon the Court's own motion, at any time after compliance with 
the requirements of the Antitrust Procedures and Penalties Act (15 
U.S.C. 16), and without further notice to any party or other 
proceedings, provided that plaintiff has not withdrawn its consent, 
which it may do at any time before the entry of the proposed Final 
Judgment by serving notice thereof on the defendants and by filing that 
notice with the Court.
    3. The defendants shall abide by and comply with the provisions of 
the proposed Final Judgment pending entry of the Final Judgment, and 
shall, from the date of the filing of this Stipulation, comply with all 
the terms and provisions thereof as though the same were in full force 
and effect as an order of the Court.
    4. In the vent plaintiff withdraws its consent or if the proposed 
Final Judgment is not entered pursuant to this Stipulation, this 
Stipulation shall be of no effect whatever, and the making of this 
Stipulation shall be without prejudice to any party in this or any 
other proceeding.

    Dated: July 27, 1995.

    For Plaintiff United States of America.
Joel I. Klein,
Acting Assistant Attorney General.
Lawrence R. Fullerton,
Acting Deputy Assistant Attorney General.
Charles Biggio,
Senior Counsel for Merger Enforcement.
Constance K. Robinson,
Director of Operations.
John F. Greaney,
Chief, Computers and Finance Section.
N. Scott Sacks,
Assistant Chief, Computers and Finance Section.

Kenneth W. Gaul, Weeun Wang, Gilad Y. Ohana, Steven R. Beck, Minaksi 
Bhatt,
Attorneys, U.S. Department of Justice.

    For Defendant Computer Associates International, Inc.
Richard L. Rosen.

    For Defendant Legent Corporation.
Randolph H. Elkins.

    So Ordered.

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United States District Judge
Disclosure Pursuant to Rule 108(k)

    Pursuant to Rule 108(k) of the Local Rules of this Court, the 
following is a list of all individuals entitled to be notified of the 
entry of the foregoing Stipulation and of the entry of the proposed 
Final Judgment:

Richard L. Rosen, Esq., Arnold & Porter, 555 Twelfth St., N.W., 
Washington, D.C. 20004-1202
Counsel for Defendant Computer Associates International, Inc.

Michael H. Byowitz, Esq., Wachtell, Lipton, Rosen & Katz, 51 West 52nd 
St., New York, NY 10019-6150
Counsel for Defendant Legent Corporation


[[Page 46862]]

Kenneth W. Gaul, Esquire, Attorney, Computers & Finance Section, 
Antitrust Division, U.S. Department of Justice, 555 4th St., N.W., 
Washington, D.C. 20001
Counsel for Plaintiff the United States

Final Judgment

    In the matter of: United States of America, Plaintiff, v. 
Computer Associates International, Inc., and Legent Corporation, 
Defendants. Civil Action No. 1:95CV01398. Filed: July 28, 1995.

    Whereas, Plaintiff, United States of America, having filed its 
Complaint herein on July 28, 1995, and Plaintiff and Defendants, by 
their respective attorneys, having consented to the entry of this Final 
Judgment without trial or adjudication of any issue of fact or law, and 
without this Final Judgment constituting any evidence against or an 
admission by any party with respect to any issue of fact or law;
    And Whereas, Defendants having agreed to be bound by the provisions 
of this Final Judgment pending its approval by the Court;
    And Whereas, the essence of this Final Judgment being prompt and 
certain remedial action to ensure that, after the acquisition referred 
to herein, competition is not substantially lessened in certain product 
markets for enumerated types of mainframe systems management software;
    And Whereas, Defendants having represented to Plaintiff that the 
licensing and customer election procedures required below can and will 
be accomplished and that Defendants will later raise no claims of 
hardship or difficulty as grounds for asking the Court to modify any of 
the licensing and customer election provisions contained below;
    Now, Therefore, before the taking of any testimony, and without 
trial or adjudication of any issue of fact or law herein, and upon 
consent of the parties hereto, it is hereby ordered, adjudged, and 
decreed as follows:

I. Jurisdiction

    This Court has jurisdiction over each of the parties hereto and the 
subject matter of this action. Venue is proper in this Court. The 
Complaint states a claim upon which relief may be granted against the 
Defendants under Section 7 of the Clayton Act, as amended (15 U.S.C. 
18).

II. Definitions

    A. ``Computer Associates'' means Defendant Computer Associates 
International, Inc., its successors and assigns, each subsidiary and 
division thereof, and each officer, director, employee, agent and other 
person acting for or on behalf of any of them.
    B. ``Customer'' means a holder of any current license or 
maintenance agreement for any subject software product with defendants, 
regardless where the customer is located.
    C. ``Customer Information'' means all information, files, and 
records maintained by Defendants concerning Customers, including (i) 
all customer call reports (or portions thereof covering the Subject 
Software Products); (ii) all pricing information; (iii) all support and 
maintenance logs; and (iv) all other information maintained by 
defendants about specific Customers as concerns the Subject Software 
Products.
    D. ``Defendants'' means, collectively or individually as the 
context requires, Computer Associates and/or Legent.
    E. ``Effective Date(s)'' means the later of (i) the date of entry 
by the Court of this Final Judgment; or (ii) the execution of 
definitive license agreement(s) as contemplated in Part IV, below.
    F. ``Legent'' means Defendant Legent Corporation, its successors 
and assigns, each subsidiary and division thereof, and each officer, 
director, employee, agent and other person acting for or on behalf of 
any of them.
    G. ``PIPES'' means the technology developed by Peer Logic, Inc. 
known as PIPES, PIPES Platform, PIPES Platform Software Developers Kit, 
and derivative works of any of these products, both in object code and 
source code forms.
    H. ``Subject Software Product'' means each of the following 
computer programs presently sold by Legent: (i) EPIC/VSE (VSE tape 
management and disk management); (ii) FAQS/PCS (VSE automated job 
scheduling); (iii) Alert/VSE and Alert/CICS (VSE security); and (iv) 
FAQS/ASO for VSE (VSE automated operations). Each Subject Software 
Product shall include:
    1. all source code and object code for the version or versions of 
the Subject Software Product currently being sold or distributed 
anywhere in the world, all existing source code and object code for all 
prior versions of the Subject Software Product previously sold or 
distributed anywhere in the world, and the most current iterations of 
source code and object code for all versions of the Subject Software 
Product under development or developed but not yet being sold or 
distributed, as of the date of the license(s) entered into pursuant to 
Part IV, below;
    2. all optional modules, add-ons, enhancements and software 
customization sold or distributed to customers for use with the Subject 
Software Product;
    3. all development tools, development environments, unique 
programming languages, software patches and other software or 
intellectual property that are or were used to develop, upgrade, and 
maintain that Subject Software Product that (i) defendants have the 
right to license, sub-license or assign, and (ii) that are not 
generally commercially available;
    4. all existing documentation developed for use with any past, 
present or future version of the Subject Software Product, including 
all technical or development documentation, all user documentation, and 
all support documentation and support records, delivered to each 
licensee in an electronic form acceptable to that licensee.

III. Applicability

    A. The provisions of this Final Judgment apply to the Defendants, 
their successors and assigns, their subsidiaries, affiliates, 
directors, officers, managers, agents, employees, attorneys and all 
other persons in active concert or participation with any of them who 
shall have received actual notice of this Final Judgment by personal 
service or otherwise. Defendants and each person bound by this Final 
Judgment shall cooperate in ensuring that the provisions of this Final 
Judgment are carried out.
    B. Defendants shall require, as a condition of the licensing 
required herein, that the licensee(s) agree to be bound by the 
provisions of this Final Judgment that apply to such licensee(s).

IV. Licensing

A. Bidding Procedures

    Defendants are hereby ordered and directed to grant a nonexclusive, 
worldwide, irrevocable license for each Subject Software Product, on 
the terms and in the manner hereinafter stated:
    1. Defendants shall, within seven (7) days after execution of the 
stipulation in this action, retain an independent investment banker to 
identify and solicit bidders, and to evaluate bids, for each Subject 
Software Product. The identity of and terms of retention of said 
investment banker shall be subject to the approval of the Plaintiff, 
and said investment banker shall be charged with faithfully carrying 
out the terms of this Final Judgment. In the event that Plaintiff does 
not approve the investment banker proposed by Defendants, Defendants 
shall within three (3) days, submit to Plaintiff six (6) alternate 
investment bankers, with the terms of the proposed retention stated for 
each. Plaintiff shall have the right to 

[[Page 46863]]
select from among these six (6) alternatives.
    2. The investment banker shall serve at the cost and expense of 
Defendants, and shall receive compensation based on a fee arrangement 
providing an additional incentive based solely on the price and terms 
of the license and the speed with which it is accomplished.
    3. The investment banker shall have discretion to solicit bids for 
license of the Subject Software Products and to otherwise make known, 
by usual and customary means, the availability for license of the 
Subject Software Products. Plaintiff and Defendants may provide names 
of prospective licensees to the investment banker for solicitation, but 
in no event shall the investment banker be limited to soliciting bids 
only from persons identified by Plaintiff or Defendants.
    4. The investment banker shall provide any person making an inquiry 
regarding a possible bid for the Subject Software Products with a copy 
of this Final Judgment, and shall coordinate the furnishing to all bona 
fide prospective licensees the information and access specified in sub-
section IV.A.5, below. The investment banker shall have discretion to 
establish such pre-bidding and bidding procedures, subject to the 
approval of Plaintiff, as are reasonably designed to elicit acceptable 
bids not later than twenty (20) days after the investment banker is 
retained. The investment banker shall file weekly reports with the 
parties setting forth the investment banker's efforts to accomplish 
licensing of the Subject Software Products as contemplated under this 
Final Judgment, including the name, address, and telephone number of 
each person who, during the preceding week, made an offer to acquire, 
expressed an interest in acquiring, entered into negotiations to 
acquire, or was contacted or made an inquiry about acquiring, any 
interest in the subject software products, and shall describe in detail 
each contact with any such person during that period.
    5. Defendants shall promptly furnish to all bona fide prospective 
licensees, subject to customary confidentiality assurances, all 
information reasonably necessary for pre-bidding due diligence 
regarding the subject software products, except such information as may 
be subject to the attorney-client privilege or the attorney work 
product doctrine. Defendants shall provide such information to the 
Plaintiff at the same time that such information is made available to 
any other person. Defendants shall permit prospective licensees of each 
Subject Software Product to have reasonable access to personnel and to 
make such reasonable inspection of any Subject Software Product, 
together with such financial, operational, or other documents and 
information as may be relevant to the license required by this Final 
Judgment.
    6. Within seven (7) days after the close of bidding, provided for 
in sub-section IV.A.3 above, the investment banker shall, in 
consultation with the parties, determine the successful bidder or 
bidders for each Subject Software Product. No bid may be accepted that 
contains any provision requiring or permitting continuing royalty 
payments to Defendants or the reporting to defendants of sales units or 
revenues of the Subject Software Product by the bidder. Preference may 
first be given to bids to license all subject software products, then 
to license multiple Subject Software Products, then to license an 
individual Subject Software Product.
    7. Defendants shall make all reasonable efforts to enter into a 
definitive agreement for the licensing of each Subject Software Product 
to the successful bidder or bidders within fourteen (14) days after 
selection by the investment banker of the successful bidder or bidders. 
Plaintiff may, in its sole discretion, extend the time period for 
completion of a definitive licensing agreement for an additional period 
of time not to exceed thirty (30) days.
    8. Unless Plaintiff otherwise consents, licensing of the Subject 
Software Products shall include such assets and be accomplished in such 
a way as to satisfy Plaintiff, in its sole discretion, that each 
Subject Software Product can and will be used by the licensee(s) as 
part of a viable, ongoing business involving the sale or license of the 
Subject Software Product to customers, including a demonstration to 
Plaintiff's satisfaction that (i) the license is for the purpose of 
competing effectively in the selling of the Subject Software Products 
to customers; (ii) the licensee has the managerial, operational, 
technical and financial capability to compete effectively in the 
selling of the Subject Software Products to customers; and (iii) none 
of the terms of the any agreement between the licensee and Defendants 
gives Defendants the ability artificially to raise the licensee's 
costs, impairs the licensee's ability to innovate the Subject Software 
Products, impairs the licensee's ability to support customers, or 
otherwise interferes with the ability of the licensee to compete 
effectively. Plaintiff may decline to approve a license of a Subject 
Software Product to any person currently selling any product in the 
same product market (as alleged in Plaintiff's Complaint).
    9. Within one (1) business day following execution of a definitive 
agreement for the licensing of any or all of the Subject Software 
Products, Defendants or the trustee, whichever is then responsible for 
effectuating the license, shall notify Plaintiff of the proposed 
license. If the trustee is responsible, it shall similarly notify 
Defendants. The notice shall set forth the details of the proposed 
transaction and list the name, address, and telephone number of each 
person not previously identified who offered to, or expressed an 
interest in or desire to, acquire any ownership interest in any Subject 
Software Product, together with full details of same. Plaintiff may, at 
its sole discretion, request additional information concerning the 
proposed license and the proposed licensee, which Defendants and the 
proposed licensee shall promptly provide. Plaintiff shall provide 
prompt written notice to Defendants and the trustee, if there is one, 
stating whether or not it objects to the proposed licensee. Upon 
written notice that the Plaintiff does not object to the proposed 
licensee, a license proposed under this Part IV may be consummated.
B. License Rights

    Any license for one or more of the Subject Software Products shall, 
at minimum, convey the following:
    1. the Subject Software Product, as defined herein;
    2. the right of the licensee(s) to obtain comprehensive training 
for its developers and support personnel from Defendants, such that the 
licensee(s) will be able to maintain, develop and support the Subject 
Software Product in substantially the same manner as Defendants;
    3. the right of the licensee(s) to assign or sub-license 
substantially all of its rights under the license(s) to another person, 
or to sub-license for the purpose of creating distributorships or 
agents of the licensee, provided however, that the license may, if 
Defendants and the licensee(s) so agree, preclude the sub-license of 
rights to any Subject Software Product on a non-exclusive basis for the 
purpose of creating additional independent, competing software vendors 
of a Subject Software Product;
    4. for a period of 180 days after the Effective Date, the right of 
the licensee(s), without interference from Defendants, to solicit, bid 
for and hire any of Defendants' employees, agents or contractors whose 
job duties as of the date of the filing by the parties of this Final 
Judgment relate, in whole or in part, directly to the development of 
technical support of the subject software 

[[Page 46864]]
products (hereinafter, the ``Subject Software Product Employees''). To 
effectuate this right, Defendants shall provide to the licensee(s): (i) 
the name, address, telephone number, job description, and current 
compensation of each Subject Software Product Employee; (ii) the right 
to contact and recruit any or all such persons regarding possible 
employment; (iii) releases by defendants from any non-compete covenants 
applicable to any Subject Software Product Employee; and (iv) releases 
by Defendants from any right under federal, state or other applicable 
law to claim misappropriation of intellectual property or trade 
secrets, insofar as such intellectual property or trade secrets relate 
to the development or support of the Subject Software Products;
    5. the right of the licensee to obtain the employment files and 
records of the Subject Software Product Employees, pursuant to the 
following procedure: (i) All such employment files and records (or 
copies thereof), as well as the names, addresses, and telephone numbers 
of such persons, shall be provided by the Defendants to the investment 
banker, within five (5) days after the retention of the investment 
banker; (ii) the investment banker shall contact each Subject Software 
Product Employee and notify such person, in a form approved in advance 
by Plaintiff (a) of that person's right to authorize the investment 
banker or trustee to release that person's employment file or record to 
any licensee; (b) of the manner in which that person shall provide 
notice to the investment banker or trustee of its authorization (such 
as a telephone number that Employee should call); (c) that Defendants 
will not learn from the investment banker or trustee of the person's 
authorization to release his or her employment file or record to the 
licensee; and (d) of the time period in which the person must 
communicate his or her authorization to the investment banker or 
trustee; (iii) if a person chooses to authorize the release of his or 
her employment file or record, the investment banker or trustee shall 
promptly provide to the licensee(s) that person's employment file or 
record; and (iv) the investment banker or trustee shall not disclose to 
Defendants the identity of any person that has chosen to authorize the 
release of his or her employment file to a licensee(s);
    6. for all Customers who elect to transfer their customer 
relationship for any Subject Software Product to the licensee pursuant 
to section V, blow: (a) full and complete assignment of all licenses 
and maintenance contracts for the Subject Software Products so 
transferred, and (b) full and complete transfer of all Customer 
Information covering the Subject Software Products so transferred, 
provided however that Defendants may retain Customer Information, but 
no Customer Information retained by Defendants shall be used for 
purposes of selling or marketing any Subject Software Product to any 
Customer who elects, pursuant to Part V herein, to transfer its 
business relationship to the licensee(s) for any Subject Software 
Product.
    7. for a period of not less than one year after the Effective Date, 
full and prompt disclosure of all technical updates and problem 
resolution protocols for the Subject Software Products;
    8. for a period of not less than one year after the Effective Date, 
reasonable (post-license) access during normal business hours to senior 
members of Defendants' development and support teams for the Subject 
Software Products to answer questions and provide problem resolution 
and advice relating to customer support;
    9. for a period of not less than one year after the Effective Date, 
the right of the licensee to refer to the trademarks or trade names of 
the Subject Software Product for the purpose of representing to 
Customers and prospective customers that the Subject Software Product 
was developed by and licensed from Defendants. This subparagraph, 
however, shall not be construed to grant the licensee any right to 
market the Subject Software Product under the Defendants' trademarks or 
trade names.

C. Appointment of Trustee

    1. If Defendants have not executed a definitive license or licenses 
to transfer all Subject Software Products as required by section IV.A, 
above, within the time specified therein (including any extension 
granted by Plaintiff pursuant to subsection IV.A.7, above), Defendants 
shall immediately notify Plaintiff of that fact in writing. Within five 
(5) calendar days of that date, Plaintiff shall provide Defendants with 
written notice of the names and qualifications of not more than two (2) 
nominees for the position of trustee for the required licensing. 
Defendants shall notify Plaintiff within five (5) calendar days 
thereafter whether either or both of such nominees are acceptable. If 
either or both of such nominees are acceptable to Defendants, Plaintiff 
shall notify the Court of the person upon whom the parties have agreed 
and the Court shall appoint that person as the trustee. If neither 
nominee is acceptable to Defendants, they shall furnish to Plaintiff, 
at the time of Defendant's notification to Plaintiff, written notice of 
the names and qualifications of not more than two (2) nominees for the 
position of trustee for the required license. If either or both of such 
nominees are acceptable to Plaintiff, Plaintiff shall notify the Court 
of the person upon whom the parties have agreed and the Court shall 
appoint that person as the trustee. If neither nominee is acceptable to 
Plaintiff, Plaintiff shall furnish the Court the names and 
qualifications of its and Defendants' proposed nominees. The Court may 
hear the parties as to the nominees' qualifications and shall appoint 
one of the nominees as the trustee.
    2. After the trustee's appointment has become effective, only the 
trustee shall have the right to license the Subject Software Products. 
The purpose of the trust shall be to create a viable, ongoing business 
which can compete effectively in the selling of the Subject Software 
Products. The trustee shall have the power and authority to execute a 
license or licenses to a person(s) acceptable to Plaintiff at such 
price and on such terms as are then obtainable upon the best reasonable 
effort by the trustee, subject to the provisions of sections IV.A and 
IV.B of this Final Judgment, and shall have such other powers as this 
Court shall deem appropriate to perform those functions. Defendants 
shall not object to the licensing of the Subject Software Products by 
the trustee on any grounds other than the trustee's malfeasance. Any 
such objection by Defendants must be conveyed in writing to Plaintiff 
and the trustee within five (5) calendar days after the trustee has 
notified Defendants of the proposed licensing.
    3. The trustee shall serve at the cost and expense of Defendants, 
shall receive compensation based on a fee arrangement providing an 
incentive based on the price and terms of the license(s) and the speed 
with which it is accomplished, and shall serve on such other terms and 
conditions as the court may prescribe; provided however, that the 
trustee shall receive no compensation, nor incur any costs or expenses, 
prior to the effective date of its appointment. The trustee shall 
account for all monies derived. After approval by the Court of the 
trustee's accounting, including fees for its services, all remaining 
monies shall be paid to Defendants and the trust shall then be 
terminated.
    4. Defendants shall take no action to interfere with or impede the 
trustee's accomplishment of the licensing of the Subject Software 
Products and shall use their best efforts to assist the trustee in 
accomplishing the required license(s). The trustee shall have such full 
and 

[[Page 46865]]
complete access to the personnel, books, records, and facilities of 
Defendants' overall businesses as is reasonably necessary to carry out 
its responsibilities, and Defendants shall develop such financial or 
other information the trustee deems reasonably necessary to the 
licensing of the Subject Software Products. The trustee shall have full 
and complete access to the books and records of the investment banker 
retained pursuant to Section IV.A, above, relating to the investment 
banker's (i) attempts to obtain licensing of the Subject Software 
Products; and (ii) collection of employee files and records and 
authorizations to release such files and records to licensee(s).
    5. After its appointment becomes effective, the trustee shall file 
weekly reports with the parties and the Court setting forth the 
trustee's efforts to accomplish licensing of the Subject Software 
Products as contemplated under this Final Judgment; provided however, 
that to the extent such reports contain information that the trustee 
deems confidential, such reports shall not be filed in the public 
docket of the Court. Such reports shall include the name, address, and 
telephone number of each person who, during the preceding week, made an 
offer to acquire, expressed an interest in acquiring, entered into 
negotiations to acquire, or was contacted or made an inquiry about 
acquiring, any interest in the Subject Software Products, and shall 
describe in detail each contact with any such person during that 
period. The trustee shall maintain full records of all efforts made to 
license the Subject Software Products.
    6. Within ninety (90) days after its appointment has become 
effective, if the trustee has not accomplished the license(s) required 
to effectuate this Final Judgment, the trustee shall promptly file with 
the parties and the Court a report setting forth (i) the trustee's 
efforts to accomplish the required licensing, (ii) the reasons, in the 
trustee's judgment, why the required license(s) have not been 
accomplished, and (iii) the trustee's recommendations; provided 
however, that to the extent such reports contain information that the 
trustee deems confidential, such reports shall not be filed in the 
public docket of the Court. The parties shall each have the right to be 
heard and to make additional recommendations consistent with the 
purpose of the trust. The Court shall thereafter enter such orders as 
it shall deem appropriate in order to carry out the purpose of the 
trust, which shall, if necessary, include disposing of any or all 
assets of the Subject Software Product businesses, including Customer 
contracts and/or software assets, to such buyers as the Court deems 
appropriate, or extending the trust and the term of the trustee's 
appointment.
V. Customer Election

    Defendants are hereby ordered and directed to take all measures 
necessary to effectuate the orderly and fair election and, where 
applicable, orderly transfer of all customer relationships concerning 
each Subject Software Product to the licensee of such Subject Software 
Product in the manner hereinafter stated.
    A. Immediately upon execution of a definitive agreement to license 
any Subject Software Product, all provisions of any customer license or 
maintenance contract concerning such Subject Software Product that 
directly or indirectly restrict the Customer's ability to transfer its 
license or maintenance agreements of any Subject Software Product to 
the licensee of such Subject Software Product shall be suspended until 
the completion of the election and transfer process.
    B. Within one (1) business day after execution of a definitive 
agreement or agreements to license the Subject Software Product, 
Defendants shall provide the investment banker or, if applicable, the 
trustee, with a complete list of the names, addresses, telephone 
numbers, and primary contact person of each Customer of each Subject 
Software Product, together with all licenses or other contracts 
relating to the Subject Software Products.
    C. Within five (5) calendar days after execution of a definitive 
agreement to license each Subject Software Product, the investment 
banker or, if applicable, the trustee, shall at Defendants' expense 
provide all customers with a notification of the right to elect whether 
to transfer their software license and maintenance contracts for the 
Subject Software Product to the licensee(s) of the Subject Software 
Product, such notification to be in a form approved by Plaintiff. Such 
notification shall include a copy of this Final Judgment, specify the 
identity of the licensee(s) of the Subject Software Products, specify 
the procedures to be followed in electing to transfer software licenses 
and maintenance contracts, and state an address of Plaintiff at which 
to direct questions or complaints about possible violations of the 
terms of this Final Judgment. Defendants and the licensee of the 
Subject Software Product shall have an equal right to enclose marketing 
or promotional materials with such notification, subject to Plaintiff's 
advance approval of such materials.
    D. Except for the marketing or promotional materials included in 
the notification pursuant to the preceding subsection, Defendants and 
the licensee of the Subject Software Product shall not otherwise 
contact or communicate with any customer so notified regarding the 
Subject Software Products or the customer's election until after the 
conclusion of the election period and transfer of all customer 
relationships to the licensee of each Subject Software Product, except 
(i) insofar as the customer initiates such contacts; and (ii) as may be 
necessary for routine technical support. In the event a customer's 
license or maintenance agreement covering any Subject Software Product 
shall expire or otherwise be renewable during the election period, the 
terms of the previous license or contract shall be extended until the 
conclusion of the election period and transfer of the customer 
relationship, unless the customer affirmatively terminates the license 
or contract. Defendants shall not solicit or induce customers to 
terminate licensees or contracts for the purpose of negotiating 
successor contracts during the election period.
    E. Each Customer shall be permitted thirty (30) days after 
notification in which to notify the investment banker, or, if 
applicable, the trustee, of its election as to whether Defendants or 
the licensee shall have the rights to their software licenses and 
maintenance contracts for the Subject Software Products. Each Customer 
shall be given instructions how to notify the investment banker or 
trustee of its election. At the close of the thirty (30) day period, 
each Customer that has not communicated its election to the investment 
banker or, if applicable, the trustee shall be notified by the 
investment banker or trustee that it has fifteen (15) additional days 
in which to make an election and that failure to elect within that 
period shall result in such Customer being allocated either to the 
Defendants or to the licensee(s). Customers failing to elect by the end 
of the fifteen (15) day period shall be randomly assigned to defendants 
or the licensee(s) of the Subject Software Products on a pro rata 
percentage equal to that of Customers who timely elected.
    F. Promptly upon the close of the notification period or the 
Effective Date, whichever is later, the investment banker or trustee 
shall notify the parties and the licensee of the Subject Software 
product of the election of each Customer, whether the Customer 
affirmatively made an election or was 

[[Page 46866]]
assigned at random, and provide the licensee with the information 
specified in subsection V.B, above, relating to each Customer that 
elected or was assigned to the licensee.
    G. Within five (5) business days after receiving notification from 
the investment banker or trustee identified in the previous Section, 
Defendants shall transfer to the licensee of the subject software 
product all Customer Information for each Customer that (i) elected to 
transfer its license or maintenance agreement; or (ii) was allocated to 
the licensee(s) pursuant to Section V.E, above.
    H. For each Customer that elects to transfer its license or 
maintenance agreement, or that is allocated to licensee(s) pursuant to 
Section V.E, above, Defendants shall pay to licensee a pro rata amount 
of all maintenance fees already paid by such Customer to Defendants to 
the extent such fees relate to service periods after the date of such 
assignment. If the maintenance fees were negotiated or calculated as 
part of a multi-product bundle or package, the payment to licensee(s) 
shall be calculated by apportioning the maintenance fees among the 
products subject to the bundle or package in a ratio derived from the 
prices of each product as stated in Defendants' standard price list or 
schedule as of the date upon which the maintenance agreement became 
effective.
    I. Upon transfer of all Customer Information, the licensee of the 
Subject Software Product, or Defendants, as the case may be, shall be 
deemed to be in full privity of contract with the Customer, and any 
provisions of the license or maintenance agreements that were suspended 
pursuant to section V.A. above shall be reinstated for the full 
remaining term of the contract.
    J. Defendants shall not solicit any Customer electing to transfer 
its customer relationship for any Subject Software Product to the 
licensee, or that is allocated to the licensee pursuant to section V.E. 
above, to breach, repudiate, or abrogate the transferred maintenance 
agreement during the full remaining term of such agreement.
    K. In any case where a Customer elects to transfer its customer 
relationship to the licensee, or is allocated to the licensee pursuant 
to section V.E. above, for a Subject Software Product covered by a 
license or maintenance agreement that also covers other products, such 
election shall apply only in respect of the Subject Software Product, 
and the license or maintenance agreement shall otherwise remain fully 
in effect; provided however that any continuing license or maintenance 
obligation shall be reduced by an amount calculated by apportioning the 
licensing or maintenance fees in a ratio derived from the prices of 
each product as stated in Defendants' standard price list or schedule 
as of the ate upon which the license or maintenance agreement became 
effective.

VI. Preservation of Assets

    Until the transfer of the Subject Software Products and customers 
relationships required by the Final Judgment have been accomplished, 
Defendants shall take all steps necessary to comply with this Final 
Judgment and with the Stipulation previously executed by Defendants. 
Defendants shall take no action that would jeopardize the licensing of 
any Subject Software Product, shall continue to commit resources, 
development and support to each Subject Software Product at a level not 
materially less than that committed prior to the announcement of the 
subject acquisition, and shall not otherwise jeopardize the commercial 
viability of any Subject Software Product insofar as rights thereto may 
be transferable to a licensee of the Subject Software Product.

VII. Cross-Platform Technology

    For five years following the entry by the Court of this Final 
Judgment, Defendants shall take no action, nor assert any right, to 
restrict Peer Logic, Inc. or any successor or assign of Peer Logic, 
Inc. from licensing PIPES to any other person, notwithstanding any 
provisions of any agreement between such defendant and Peer Logic, Inc. 
to the contrary.

VIII. Compliance Inspection

    For the purposes of determining or securing compliance with the 
Final Judgment and subject to any legally recognized privilege or 
doctrine, from time to time:
    A. Duly authorized representatives of the Department of Justice, 
upon written request of the Attorney General or of the Assistant 
Attorney General in charge of the Antitrust Division, and on reasonable 
notice to Defendants made to its principal office, shall be permitted:
    1. Access during office hours of Defendants to inspect and copy all 
books, ledgers, accounts, correspondence, memoranda, and other records 
and documents in the possession or under the control of Defendants, who 
may have counsel present, relating to any matters contained in this 
Final Judgment; and
    2. Subject to the reasonable convenience of Defendants and without 
restraint or interference from them, to interview or depose officers, 
employees, and agents of defendants, who may have counsel present, 
regarding any such matters.
    B. Upon the written request of the Attorney General or of the 
Assistant Attorney General in charge of the Antitrust Division made to 
Defendants' principal office, Defendants shall submit such written 
reports, under oath if requested, with respect to the matters contained 
in this Final Judgment as may be requested.
    C. No information or documents obtained by the means provided in 
this Section shall be divulged by a representative of the Department of 
Justice to any person other than a duly authorized representative of 
the Executive Branch of the Untied States, except in the course of 
legal proceedings to which the United States is a party (including 
grand jury proceedings), or for the purpose of securing compliance with 
this Final Judgment, or as otherwise required by law.
    D. If at the time information or documents are furnished by 
Defendants to Plaintiff, Defendants represent and identify in writing 
the material in any such information or documents to which a claim of 
protection may be asserted under Rule 26(c)(7) of the Federal Rules of 
Civil Procedure, and Defendants mark each pertinent page of such 
material, ``Subject to claim of protection under Rule 26(c)(7) of the 
Federal Rules of Civil Procedure,'' then ten (10) calendar days notice 
shall be given by Plaintiff to Defendants prior to divulging such 
material in any legal proceeding (other than a grand jury proceeding) 
to which a defendant is not a party.
IX. Retention of Jurisdiction

    Jurisdiction is retained by this Court for the purpose of enabling 
any of the parties to this Final Judgment to apply to this Court at any 
time for such further orders and directions as may be necessary or 
appropriate for the construction or carrying out of this Final 
Judgment, for the modification of any of the provisions hereof, for the 
enforcement of compliance herewith, and for the punishment of any 
violations hereof.

X. Termination

    This Final Judgment will expire on the tenth anniversary of the 
date of its entry.

[[Page 46867]]


XI. Public Interest

    Entry of this Final Judgment is in the public interest.

----------------------------------------------------------------------
United States District Judge

Dated:-----------------------------------------------------------------
    In the matter of: United States of America, Plaintiff, v. 
Computer Associates International, Incorporated, and Legent 
Corporation, Defendants. Case No. 95 CV 1398 (TPJ). Filed: August 
18, 1995. Received: August 18, 1995.

Competitive Impact Statement

    The United States, pursuant to Section 2(b) of the Antitrust 
Procedures and Penalties Act (``APPA''), 15 U.S.C. Sec. 16(b)-(h), 
files this Competitive Impact Statement relating to the proposed Final 
Judgment submitted for entry in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    The United States filed a civil antitrust Complaint on July 28, 
1995, alleging that the acquisition of Legent Corporation (``Legent'') 
by Computer Associates International, Inc. (``CA'') would violate 
Section 7 of the Clayton Act, 15 U.S.C. Sec. 18. CA and Legent are 
among the world's leading suppliers of systems management software for 
mainframe computers.
    The Complaint alleges that the acquisition would eliminate 
significant competition between CA and Legent in five markets for 
systems management software used with mainframe computers that work 
with the VSE operating system: VSE tape management software; VSE disk 
management software; VSE security software; VSE job scheduling 
software; and VSE automated operations software. In addition, the 
Complaint alleges that the transaction would substantially lessen 
competition in the market for ``cross-platform'' systems management 
software, used in computer installations where a mainframe computer is 
linked together with other types of computer ``platforms'' (such as 
midrange computers or networks of workstations or personal computers). 
The Complaint seeks adjudication that CA's acquisition of Legent would 
violate Section 7 of the Clayton Act and preliminary and permanent 
injunctive relief.
    At the same time as the filing of the Complaint, the United States 
filed a Stipulation and a proposed Final Judgment in settlement of the 
suit. With respect to each of the five markets for VSE systems 
management software products, the proposed Final Judgment requires CA 
to license Legent's products to a person who can and will use the 
license to compete effectively in the relevant markets. With respect to 
the market for cross-platform systems management software, the proposed 
Final Judgment prohibits CA from taking any action to restrict 
competitors' access to an important technology, called ``PIPES,'' that 
has been licensed to Legent by a third party, Peer Logic, Inc. (``Peer 
Logic'').
    The United States, CA, and Legent have stipulated that the proposed 
Final Judgment may be entered after compliance with the APPA. Entry of 
the proposed final judgment would terminate this action, except that 
the Court would retain jurisdiction to construe, modify, or enforce the 
provisions of the proposed Final Judgment and to punish violations 
thereof.

II. Description of Events Giving Rise to the Alleged Violation

A. The Defendants and the Proposed Transaction

    CA is a Delaware corporation with its principal place of business 
in Islandia, New York. In its fiscal year 1994, CA reported revenues in 
excess of $2.1 billion. CA produces and markets software for a variety 
of computers and operating systems, including systems management 
software for mainframe computers running IBM's VSE operating system. 
Aside from IBM, which writes the operating system software that run 
almost all mainframe computers, CA is the largest vendor of the 
software for IBM and IBM-compatible mainframe computers.
    Legent is a Delaware corporation with its principal place of 
business in Herndon, Virginia, and sells several different types of 
computer software and related services. In its fiscal year 1994, 
Legent's total revenues were over $500 million. Like CA, Legent is a 
leading vendor of systems management software products for mainframe 
computers.
    On May 25, 1995, CA announced that it had entered into a definitive 
agreement with Legent to purchase all issued and outstanding shares of 
Legent's common stock through a cash tender offer. This $1.75 billion 
transaction forms the basis of the government's suit.
B. VSE Systems Management Software

    Mainframe computers are the large and powerful computers used by 
industrial, commercial, educational, and governmental enterprises for 
large scale data processing applications. Mainframe computers provide 
unique storage, throughput, and security features and functions that 
make them superior data processing devices for large corporate and 
institutional computer users throughout the world.
    An operating system is software that controls the operational 
resources of the computer (including the central processor unit, 
memory, data storage devices, and other hardware components) and allows 
``applications'' software (programs that perform user-directed tasks 
requested of the computer, such as programs that maintain payroll, 
inventory, sales, and other business accounts of a company) to run on 
the computer. The vast majority of the world's mainframe computers run 
with operating systems developed by IBM, of which one of the most 
widely used is the VSE operating system.
    System management software is used to help manage, control, or 
enhance the performance of mainframe computers. Some systems management 
functionality may be incorporated in an operating system. Separate 
systems management software programs such as the products offered by CA 
and Legent, however, provide additional functionality that is demanded 
by mainframe users. These separate systems management programs work in 
conjunction and generally must be compatible with the computer's 
operating system.
    CA and Legent both produce a wide range of mainframe computer 
systems management software products for the VSE operating system. They 
are direct competitors of each other with respect to the following VSE 
systems management software products: (1) Tape management software, 
which controls the computer's cataloguing, loading, formatting, and 
reading of the magnetic tapes used for data storage; (2) disk 
management software, which performs functions similar to that of tape 
management with respect to data storage in hard disk drive 
installations; (3) security management software, used to prevent 
unauthorized access to computer applications and data; (4) job 
scheduling software, used to direct the computer to run particular 
processing operations (called ``jobs'') at particular times or 
sequences; and (5) automated operations software, used to automate 
message and error handling and other operations at the computer system 
console.
    Each of the above described VSE systems management software 
products perform distinct functions for which no reasonable substitute 
products exist. As to each of the VSE products, even a substantial 
price increase would not cause their purchasers to begin substituting 
any other products. Each of the VSE products, therefore, constitutes 

[[Page 46868]]
a relevant product market in which to assess the competitive effects of 
CA's acquisition of Legent.
C. Cross-Platform Systems Management Software

    ``Cross-platform'' refers to different types of computer processor 
designs or architectures. In addition to mainframe computers, other 
``platforms'' are midrange computers, workstations, and PCs, all of 
which can, in varying degrees, be linked together into integrated 
multi-platform networks. These networks are also referred to as 
``distributed'' computer systems. The integration of mainframe 
computers into distributed multi-platform systems is a relatively 
recent development, but is of increasing importance to modern computer 
installations.
    CA and Legent have developed cross-platform systems management 
software products that allow different platforms that make up a multi-
platform network of computers to be efficiently managed from a single 
point in the network. Customers that require cross-platform systems 
management products would not turn to other means of systems management 
in response to a significant increase in prices of such cross-platform 
systems management software. Cross-platform systems management software 
therefore constitutes a relevant product market in which to assess the 
competitive effects of CA's acquisition of Legent.

D. Competition Between CA and Legent

    CA and Legent compete against each other for sales of VSE and 
cross-platform systems management software throughout the United 
States. They compete with respect to both license royalties they charge 
users of systems management products, and the flexibility of the 
license terms they offer. Both firms market their products under 
licenses that require royalty payments for the right to use the product 
and payments for maintenance of and upgrades to the products.
    Moreover, CA and Legent compete in providing product support and 
service to their customers. Due to the ``mission critical'' nature of 
the work done with mainframe computers, users highly value the speed 
and effectiveness of a vendor's installation, maintenance, and 
technical support of systems management products. CA and Legent also 
compete to improve, upgrade, and enhance their systems management 
products, both in terms of developing products of greater performance 
or functionality and in terms of products that are easier to install, 
use, and maintain.

E. Anticompetitive Consequences of the Acquisition

    The Complaint alleges that CA's acquisition of Legent would 
substantially lessen competition and create (or facilitate CA's 
exercise of) market power in each of the relevant systems management 
software markets. Each of the relevant markets already is highly 
concentrated, and the acquisition would substantially increase 
concentration. In the VSE tape management, VSE disk management, and VSE 
security markets, CA's acquisition of Legent would make CA the sole 
supplier. In the VSE job scheduling and VSE automated operations 
markets, the acquisition would allow CA dominate with post-acquisition 
market shares of 71 percent and 88 percent respectively. In the cross-
platform systems management market, the acquisition would eliminate 
substantial competition because CA and Legent currently are two of only 
a few competitors that have to date developed and commercialized the 
technology necessary to integrate mainframe computers into distributed 
computing systems.
    The Complaint alleges that in each of the relevant markets, the 
reduction or elimination of competition from CA's acquisition would 
likely lead to higher prices and lower levels of product quality, 
service and support, and product innovations and development. The 
Complaint further alleges that the competitive harm resulting from the 
proposed acquisition is not likely to be mitigated by possibilities of 
new entry. For any of the relevant markets, entry would entail 
expenditures of substantial costs and time for the development of a 
competitive product that would be acceptable to mainframe customers. 
Such entry would not be timely, likely, or sufficient in scale to 
counteract or deter a price increase or a reduction in service or 
product quality in any of the relevant markets.

III. Explanation of the Proposed Final Judgment

    The proposed Final Judgment would preserve competition in each of 
the relevant systems management software markets in which CA's 
acquisition of Legent would be anticompetitive. As to each of the five 
VSE markets, the proposed Final Judgment requires CA to license 
Legent's products to a person determined by the United States to have 
the capabilities and resources needed to use the licenses as a viable 
and effective competitor.
    Under the proposed Final Judgment, each of the VSE product licenses 
will be worldwide and perpetual in scope, granting the licensee full 
rights and capabilities to produce, market, and support the products, 
as well as to develop and market new product versions. The proposed 
Final Judgment provides that licensee with product development and 
support assistance and expertise--including the right to recruit Legent 
development and support personnel--that may be needed to compete 
effectively.
    The proposed Final Judgment establishes procedures enabling current 
Legent customers to choose whether to purchase future support, 
maintenance and upgrades of the relevant systems management software 
products from CA or the licensee, without regard to the customers' 
current contracts with Legent. Five days after a license is finalized, 
Legent customers will be notified and given up to 45 days to elect to 
be supplied by CA or by the licensee. Customers who do not make an 
election will be assigned to CA or to the licensee on a pro rata basis 
in the same proportion as the customers who did make elections. The 
proposed Final Judgment provides that the new supplier will have all 
customer files, service and support records, and other documentation 
necessary for the new supplier to effectively serve the needs of the 
customers who elect to be supplied by the licensee.
    If CA, with the assistance of an investment banker, is unable to 
identify a viable licensee that is satisfactory to the Department of 
Justice, the Court may appoint a trustee to attempt to carry out the 
licensing. In the event that the licensing provisions of the proposed 
Final Judgment do not result in the selection and establishment of a 
viable and effective competitor in a relevant VSE market, the Judgment 
requires CA to dispose of additional assets, including the complete 
divestiture of the products and transfer of Legent customer contracts, 
to accomplish the goal of establishing a viable and effective 
competitor.
    With respect to the cross-platform systems management software 
market, the proposed Final Judgment forbids CA for five years from 
taking any action to restrict any other person's access to a key cross-
platform systems management technology. This technology, called 
``PIPES'' and developed by Peer Logic, consists of communication 
software technology that, among other things, allows the different 
operating systems in a cross-platform environment to interact with each 
other.
    Peer Logic has licensed PIPES to Legent, for use with or 
incorporation into Legent Products. With its 

[[Page 46869]]
acquisition of Legent, and depending on the interpretation of 
contractual relationships between Legent and Peer Logic, CA may succeed 
to Legent's rights to use PIPES. By prohibiting CA from potentially 
interfering with Peer Logic's licensing of PIPES to others, the 
proposed Final Judgment makes PIPES available to others who would use 
the technology in competing in the market for cross-platform systems 
management software.
    The relief sought in the markets of concern in the Complaint has 
been tailored to maintain the level of competition that existed in 
those markets prior to the acquisition. With respect to the VSE systems 
management products, the proposed Final Judgment will establish a firm 
or firms that will offer consumers proven products and competent 
support. With respect to cross-platform systems management products, 
the proposed Final Judgment maintains the availability to third parties 
of technology that is useful in the development of cross-platform 
systems management solutions, thereby facilitating the more rapid 
development of competing products by other firms.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act (15 U.S.C. 15) provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act (15 U.S.C. 
16(a)), the proposed Final Judgment has no prima facie effect in any 
subsequent private lawsuit that may be brought against defendants.
V. Procedures Available for Modification of the Proposed Final Judgment

    The United States and the defendants have stipulated that the 
proposed Final Judgment may be entered by the Court after compliance 
with the provisions of the APPA, provided that the United States has 
not withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least sixty (60) days preceding 
the effective date of the proposed Final Judgment within which any 
person may submit to the United States written comments regarding the 
proposed Final Judgment. Any person who wishes to comment should do so 
within sixty (60) days of the date of publication of this Competitive 
Impact Statement in the Federal Register. The United States will 
evaluate and respond to the comments. All comments will be given due 
consideration by the Department of Justice, which remains free to 
withdraw its consent to the proposed Final Judgment at any time prior 
to entry. The comments and the response of the United States will be 
filed with the Court and published in the Federal Register.
    Written comments should be submitted to: John F. Greaney, Chief, 
Computers & Finance Section, Antitrust Division, United States 
Department of Justice, Suite 9901, 555 4th Street NW., Washington, DC 
20001.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    The United States considered, as an alternative to the proposed 
Final Judgment, a full trial on the merits of its Complaint against 
defendants CA and Legent. The United States is satisfied, however, that 
the licensing and other relief contained in the Final Judgment should 
maintain viable and effective competition in the relevant VSE and 
cross-platform systems management software markets that would otherwise 
be substantially affected by the acquisition. Moreover, in the event 
that Legent's five VSE products cannot be promptly licensed to a viable 
competitor, the Court may order complete divestiture of the products. 
Thus, the Final Judgment will achieve the same benefit to competition 
that the government could have obtained through litigation, but avoids 
the time, expense and uncertainty of a full trial on the merits of the 
government's Complaint.

VII. Determinative Documents

    One determinative document within the meaning of the APPA--a July 
26, 1995 letter from Sanjay Kumar, CA's President and Chief Operating 
Officer--was considered by the United States in deciding to consent to 
the proposed Final Judgment. Mr. Kumar's letter clearly acknowledges 
that section IV.C.6 of the proposed Final Judgment empowers the Court 
to order full divestiture of Legent's five VSE products if viable 
licensee(s) cannot be found. A copy of this document is attached 
hereto, and will be available for public inspection.

    Dated: August 18, 1995.

    Respectfully submitted,
Kenneth W. Gaul,
Attorney, Antitrust Division, U.S. Department of Justice.

July 26, 1995.

By Facsimile

Honorable Anne K. Bingaman,
Assistant Attorney General, Antitrust Division, United States 
Department of Justice, 10th Street & Pennsylvania Avenue NW., 
Washington, DC 20530

RE: Computer Associates International, Inc./Legent Corporation

    Dear Anne: Pursuant to our conversation of this afternoon, this 
letter will act as confirmation of Computer Associates' 
understanding regarding the proposed Consent Decree. We hereby 
acknowledge that the Decree permits the Court sufficient discretion, 
if the Court so desires, to dispose of the five VSE software 
products in question in the event that a suitable licensee or 
licensees are not found. We understand that such disposition ordered 
by the Court could include the divestiture of one or more of these 
five VSE software products.
    We remain confident that, with the Department's cooperation, the 
license mechanism proposed in the Decree will work and satisfy all 
of your requirements.

    Sincerely,
Sanjay Kumar,
President and Chief Operating Officer, Computer Associates 
International, Inc.

Certificate of Service

    The undersigned certifies that he is a paralegal employed by the 
Antitrust Division of the United States Department of Justice, and is a 
person of such age and discretion to be competent to serve papers. The 
undersigned further certifies that on August 13, 1995, he caused true 
copies of the Competitive Impact Statement of plaintiff, United States, 
and this Certificate of Service, to be served upon the persons at the 
place and addresses stated below:

Counsel for Computer Associates

Richard L. Rosen, Esq., Arnold & Porter, 555 12th Street NW., 
Washington, DC 20004 (by facsimile and by hand delivery)

Counsel for Legent

Michael H. Byowitz, Esq., Wachtell, Lipton, Rosen & Katz, 51 W. 52nd 
Street, New York, NY 10019 (by facsimile and by overnight courier)


[[Page 46870]]

    Dated: August 18, 1995.
Joshua Holian,
Paralegal, U.S. Department of Justice, Antitrust Division, Computers & 
Finance Section.
[FR Doc. 95-22266 Filed 9-7-95; 8:45 am]
BILLING CODE 4410-01-M