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Reporters Appeal Apple Ruling

Wednesday, March 23, 2005; Page E02

Online journalists who published trade secrets about Apple Computer filed an appeal in a case that could have broad implications for the media. A California judge ruled March 11 that three independent online reporters may have to provide Apple with the identities of their confidential sources and that they weren't protected by "shield laws" that usually protect journalists. In their appeal, attorneys representing the reporters argued that the judge's ruling violated the First Amendment and that Apple should first subpoena its own employees or use computer forensics to determine the sources of the leak. Apple sued 25 unnamed individuals, believed to be Apple employees, who leaked the information.

Conrad Black Under Criminal Probe

Federal prosecutors asked a court to withhold a document sought by former Hollinger International chief executive Conrad M. Black in a civil suit, saying the disclosure would hurt a criminal investigation. The filing by the U.S. attorney's office in Chicago is the first acknowledgment that federal authorities are conducting a criminal probe of Black, who has already been sued by the U.S. Securities and Exchange Commission and is being investigated by Canadian regulators. The SEC lawsuit and the criminal probe stem from allegations that Black wrongfully diverted proceeds from Hollinger, the publisher of the Chicago Sun Times. Black was removed as chief executive after an internal review found that he used company money for personal travel and purchases.

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J.P. Morgan Chase and its Bank One unit, which it acquired last year, agreed to pay $120 million to settle a shareholder lawsuit stemming from the 1998 purchase of a Chicago bank. The dispute centered on Banc One's purchase of First Chicago NBD, a union that resulted in the creation of Bank One. The suit claimed Banc One issued misleading financial statements about its credit card unit, First USA, in an effort to ensure that First Chicago would agree to the acquisition.

The Treasury Department announced that it has launched a program to convert existing paper bonds into electronic securities. The program, dubbed SmartExchange, isn't mandatory, but Treasury officials are hoping that holders of the existing 760 million paper bonds will take them up on their conversion offer.

American Airlines said its cost for jet fuel may rise as much as $1.4 billion this year, to more than $5 billion. American, a unit of AMR, spent $3.97 billion on fuel in 2004, an increase of $1.1 billion from the previous year. Continental Airlines and America West Airlines last week both said they will have "significant" losses this year because of the higher fuel prices and lower U.S. fares.

Former Hollywood Entertainment chief executive Mark Wattles expressed interest in buying up to half of the video chain's stores, according to a filing with the Securities and Exchange Commission. Wattles indicated in a letter that he thinks the Federal Trade Commission would be more inclined to let Blockbuster buy Hollywood Entertainment if he were allowed to buy some of the stores.

International Business Machines agreed to pay as much as $400 million to Compuware, ending a three-year battle over software and patents. Compuware sought more than $500 million in damages, claiming it had to cut prices because of unfair tactics by IBM. IBM will license $140 million of Compuware software and offered to purchase up to $260 million of Compuware services during the next four years. The companies also agreed to cross-license some patents, they said.

Federal regulators are seeking more information as they review Procter & Gamble's pending acquisition of Gillette, and the Massachusetts secretary of state is questioning whether Gillette shareholders are getting shortchanged in the deal. A finance professor hired by the Massachusetts official to review internal company documents concluded the acquisition could yield as much as $12 billion more in cost-cutting savings from improved efficiency than the companies have forecast publicly.

Tribune, which owns the Hartford Courant, was ordered by a U.S. district judge in Connecticut to sell television station WTXX in Waterbury to comply with media ownership rules. The Federal Communication Commission ordered Tribune to sell WTXX in 2001 but granted extensions that expired in August 2002. The company has asked for a permanent waiver of cross-ownership rules but said it has not received a reply.

The Los Angeles Times has a new publisher. Tribune, the nation's third-largest newspaper company, named Jeffrey M. Johnson, general manager of the Times, as successor to publisher John P. Puerner, who said in a statement he is taking a break. Johnson becomes president, publisher and chief executive of the Los Angeles Times on June 1.

Several major airlines reinstated a $10 fare increase on domestic round trips, one day after dropping it. Delta, Continental, American, United and Northwest are among the carriers that made the move, which analysts said was in response to rising fuel costs. A Merrill Lynch report issued Friday estimated that the U.S. airline industry will lose $5 billion this year.

Agence France-Presse is suing Google for pulling together photos and story excerpts from thousands of news Web sites. The French news agency said the Google News service infringes on its copyrights by reproducing information from the Web sites of subscribers of the Paris-based news wholesaler. The suit was filed in U.S. District Court in Washington and seeks $17.5 million in damages.

Level 3 Communications withdrew a request to federal regulators asking for exemption from paying higher fees to local phone companies for transmitting certain calls over the traditional phone network. The Internet phone service company told the Federal Communications Commission that the cost of making Internet calls could rise if the FCC ruled that the company had to pay higher access charges to local phone companies.

American International Group, the world's largest insurer, may have a "serious problem" if executives refuse to answer questions in an accounting investigation, New York Attorney General Eliot L. Spitzer said. AIG on Monday fired Howard I. Smith as chief financial officer and another executive for failing to cooperate with government probes. Spitzer said his comments did not refer to specific individuals.


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