The lead story in the March/April 2009 Industry News section of ONLINE details the M&A activities during 2008 of Morningstar. It goes like this:

 Morningstar, a leading provider of independent investment research and famous for its five-star ranking system, has been busily acquiring other companies. It began 2008 by buying Hemscott from Ipreo Holdings. Hemscott covers U.K. investment instruments. September saw the acquisition of Financial Computer Support, Inc. (FCSI), a company that provides practice management software for independent advisors. In November, Morningstar reached out to South Africa, acquiring InvestData (Proprietary) Limited, a provider of fund information for the southern African region. Its December acquisition of U.K.-based Tenfore adds real-time market data and financial data workstations to Morningstar’s repertoire. It ended the year with the acquisition of privately-held 10K Wizard, which provides sophisticated, full text searching and data mining of SEC documents.

Given that I’ve always thought of Morningstar in the most favorable of terms, I was surprised to pick up today’s Wall Street Journal and read that NewRiver, a company Morningstar was thinking of buying last spring, was suing Morningstar for espionage. Morningstar, a spy? NewRiver, based in Andover, Mass., accuses Morningstar of going to a secret web address, presumably password protected, then accessing it more than 134,000 times to download mutural fund prospectuses. It offered these documents for sale to NewRiver customers in an attempt to sign them up with Morningstar. NewRiver uses a patented process to search the SEC website , grabbing the prospectuses as they go online, and storing them in its own Prospectus Express data warehouse. NewRiver’s value proposition is the speed with which it can identify and supply these documents. According to NewRiver, it found out about Morningstar’s activities from its own clients, to whom it granted "significant pricing concessions" to ward off their defection to Morningstar. 
What the news story doesn’t say is whether access to Prospectus Express is continuing. If not, it’s hard to see how Morningstar could build a competitive business to NewRiver using old data from its warehouse. Prospectuses age quickly. The SEC information is freely available. If Morningstar develops a data mining technique not reliant upon NewRiver’s patent, it could be a real threat to NewRiver’s business. Without any need for espionage. And, remember, after the deal with NewRiver didn’t materialize, Morningstar bought 10-K Wizard. If memory serves, its technology is pretty darn good at data mining real times SEC filings, including prospectuses.