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Category — Royalty Disputes

Gibson Sues MTV, EA & Harmonix over Guitar Patent

Categories: Controller CasesPatent CasesRoyalty Disputes

Text of MTV/EA/Harmonix Complaint (March 20, 2008)
Text Patent No. 5,990,405 (November 23, 1999)

After “good faith efforts to enter into a patent license agreement”, and subsequent yesterday’s filing of law suits against Activision’s Guitar Hero retailers, Gibson has filed another patent infringement suit against MTV, EA & Harmonix in the Federal District Court in Tennessee. Gibson owns patent no. 5,990,405.

Gibson claims Harmonix infringed its patent as the developer of Guitar Hero 1 and 2 (now published by Activision – previously published by RedOctane). After Harmonix parted ways with RedOctane, it was purchased by MTV. Harmonix subsequently developed the successful video game – Rock Band. EA distributes the game. Gibson claims that Rock Band infringes its patents and as such Harmonix, the game developer, MTV, the game publisher and EA, the game distributor, are all infringing its patents.

Harmonix has responded in an email to Wired Blog’s as follows:

“Gibson’s patent, filed nearly 10 years ago, required a 3D display, a real musical instrument and a recording of a concert. Rock Band and Guitar Hero are completely different: among other things they are games, require no headset and use a controller only shaped like a real instrument. It is unfortunate that Gibson unfairly desires to share in the tremendous success enjoyed by the developers of Rock Band and Guitar Hero,”

While Gibson previously threatened action against the current Guitar Hero publisher Activision, as far as I know, no law suit has been filed against Activision.

The 405 patent’s abstract reads:

A musician can simulate participation in a concert by playing a musical instrument and wearing a head-mounted 3D display that includes stereo speakers. Audio and video portions of a musical concert are pre-recorded, along with a separate sound track corresponding to the musical instrument played by the musician. Playback of the instrument sound track is controlled by signals generated in the musical instrument and transmitted to a system interface box connected to the audio-video play back device, an audio mixer, and the head-mounted display. An external bypass switch allows the musician to suppress the instrument sound track so that the sounds created by actual playing of the musical instrument are heard along with the pre-recorded audio and video portions.

Dale’s Comment: I have not yet found the text of the claim online. If/when I do, I will attach it to this post.

Sources: Wired Blogs 1 | Wired Blogs 2 | CNNMOney.com (DJN) | Reuters | Joystiq | New York Times 1 | New York Times 2 | Wall St. Journal | MTV Blog | PC World | AP

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Activision Asks Court to Invalidate Gibson’s Guitar Hero Patent Claims

Categories: Controller CasesPatent CasesRoyalty Disputes

Text of Activision Complaint Seeking Declaratory Relief (March 11, 2008)
Text of Patent No. 5,990,405 (November 23, 1999)

Activision has a long-standing license to use guitar-maker Gibson’s trademarks in its Guitar Hero video game franchise.

Gibson owns a hitherto unknown and unenforced patent ’405 (A System and method for generating and controlling a simulated musical concert experience) and claimed in a letter sent to Activision in January, that the Guitar Hero franchise, expansion packs and controllers infringe this patent. In the letter Gibson sought royalty payments from Activision:

Gibson requests that Activision obtain a license under Gibson’s … patent or halt sales of any version of the Guitar Hero game software.

In response, Activision has filed a preemptive lawsuit in the District Court for Central California asking the court, among other things, to invalidate Gibson’s patent claims and to bar it from seeking damages.

The abstract of Gibson’s patent no. 5,990,405 reads as follows:

A musician can simulate participation in a concert by playing a musical instrument and wearing a head-mounted 3D display that includes stereo speakers. Audio and video portions of a musical concert are pre-recorded, along with a separate sound track corresponding to the musical instrument played by the musician. Playback of the instrument sound track is controlled by signals generated in the musical instrument and transmitted to a system interface box connected to the audio-video play back device, an audio mixer, and the head-mounted display. An external bypass switch allows the musician to suppress the instrument sound track so that the sounds created by actual playing of the musical instrument are heard along with the pre-recorded audio and video portions.

Sources: Gamasutra | Next Generation 1 | Next Generation 2 | GameSpot | InformationWeek | engadget | Joystiq | MacWorld | Wall Street Journal | CNet | Yahoo! News (Reuters)

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Harmonix Brings $14.5M Royalty Suit Against Activision – Sort-of

Categories: Controller CasesRoyalty Disputes

Harmonix is the developer of the first two wildly successful Guitar Hero video games – originally published by RedOctane. In June 2006 Activision purchased the publishing rights to the franchise from RedOctane and Harmonix, which was subsequently purchased by MTV, went its own way and developed Guitar Hero. Activision-owned Neversoft has since taken-up the development of Guitar Hero sequels.

Harmonix claims that under its original agreement with RedOctane (subsequently assigned to Activision), it is entitled to a higher rate of royalties, amounting to $14.5 million, for the use of its intellectual property in Guitar Hero sequels. Harmonix claims that Activision has paid royalties based only on a prior lower rate.

Viacom (the parent of MTV and Harmonix) has reportedly withdrawn the suit for now. The companies have agreed to continue discussions outside of court.

Dale’s Comment: I could not find the text of the claim online. If I do, I will attach it to this post.

Sources: Variety | Gamasutra | GameSpot | Wired Blogs | CutScene | ars technica | GameSpot | Spong | Kotaku | Game Informer | gameindustry.biz

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Mid-Way Sued over Psi-Ops

Categories: Copyright CasesRoyalty DisputesTrademark Cases

Midway Games is being sued by William L. Crawford III, a Los Angeles County screenwriter, over its Psi-Ops: The Mindgate Conspiracy sci-fi stealth-action game. Crawford claims the premise, plot and characters were stolen from a screenplay he wrote in 1998 – also called Psi-Ops.

Crawford claims that Midway should have known about his screenplay and its premise because:

  • he had set up websites with concept art;
  • he attended the 2001 E3 to promote it.
  • his company, Mindshadow Entertainment, had received media coverage for a possible  Psi-Ops movie project.
  • he had registered “Psi-Ops” with the U.S. Copyright Office six years prior to Midway’s registration.

Crawford seeks an accounting and share of revenue made from “Psi-Ops” sales in an amount no less than $1.5 million.

Dale’s Comment: On a personal note, immediately following its release I purchased this game for the original Xbox. It was unplayable. Like several games of its era, it made me nausious within five minutes of firing it up. Too bad. It looked like a fun game.

Sources: GameSpot | gameindustry.biz | SoftPedia | Yahoo! Games | Kotaku | IGN | 1Up.com

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RollerCoaster Tycoon Case to Proceed to U.K. High Court

Categories: Misc. CasesPublisher/Developer CasesRoyalty DisputesTortious Interference

Atari was sued by RollerCoaster Tycoon developer Chris Sawyer in November 2005 alleging unpaid royalties.

Atari counterclaimed Sawyer alleging he induced game developer Frontier to breach its contract with Atari in creating a demo based on the RollerCoaster Tycoon franchise.

Apparently the UK’s law on inducement to breach is in flux and the outcome of Atari’s counterclaim is contingent on two cases pending before the House of Lords. Nonetheless Judge Lord Justice Chadwick is permitting the RollerCoaster Tycoon case to proceed to trial, but subject to the outcome of the other two cases.

Sources: GameIndustry.biz

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Sniffing Out the Royalties

Categories: Featured ArticlesRoyalty DisputesStartup Game Developer Issues

Media Forensics offers to examine independent developers’ distribution contracts and sniff out unpaid or underpaid royalties.

Sources: Next Generation

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WWE Sues THQ – Claims Unauthorized Sublicensing

Categories: Distribution Agmt CasesLicensed Game CasesRoyalty Disputes

The WWE filed a lawsuit against THQ on October 12th claiming games using the WWE trademark were improperly sold in Japan and Asia. The WWE is seeking a declaration that it has the right to terminate its license agreement with THQ.

WWE claims that THQ sublicensed out rights to the game that they were not granted the right to sublicense. Indeed, WWE claims that the license explicitly precludes sublicensing without written consent from the WWE which such consent was not sought nor received.

WWE claims that THQ sublicensed rights to Yukes (partly owned by THQ) and that Yukes paid royalties directly to THQ that should have been paid to WWE.

THQ, for its part, says that WWE has been aware aware of and consented to the manner of distribution it uses in Japan.

Sources: Gamasutra | Pro-G | GameSpot 1 | *GameSpot 2 | Gamers.com | XBoxic | THQ Press Release

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Square Enix Sued for Return of $3.78M Royalty Payment

Categories: Distribution Agmt CasesRoyalty Disputes

Soft-World International has filed a lawsuit against Japan-based Square Enix, alleging that the Japanese company has failed to comply with a distribution agreement and demanded Square Enix pay back a royalty payment of US$3.78 million. Soft-World claims Square Enix failed to provide source codes as contracted.
 
Sources: DigiTimes  |  GameIndustry.biz  |  MMORPG blog

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GMX Refutes Tesseraction’s Court Victory Claim

Categories: DecisionsDistribution Agmt CasesRoyalty Disputes

The two-year legal battle between GMX Media and Tesseraction Games appears not to be settled contrary to Tesseration’s claim.

Source: GameIndustry.biz

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Tesseraction Games Claims Summary Judgement Victory Against GMX Media

Categories: DecisionsDistribution Agmt CasesRoyalty Disputes

Text of September 23, 2003 Complaint
The lawsuit alleged that GMX Media failed to produce timely and accurate sales and royalty accounts, failed to pay royalties from sales and interest on delayed royalties, distributed the title in countries outside of those defined in the agreement, and distributed the title in packaging that was not approved by Tesseraction, contained altered text and omitted vital game support information.

Source: GameIndustry.biz

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Atari Sued over RollerCoaster Tycoon Royalty Dispute

Categories: Misc. Contract CasesPublisher/Developer CasesRoyalty Disputes

Atari is being sued by RollerCoaster Tycoon developer Chris Sawyer for between $4.8 & $5.2 M U.S. (depending on the report) plus interest in alleged unpaid royalties. Sawyer alleges Atari breached its contract by failing to to give his auditors access to Atari’s accounts between 1999-2001.

Sources: CNet | GameIndustry.biz | The Inquirer

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Developer Chris Sawyer Sues Atari in Royalties Dispute

Categories: Publisher/Developer CasesRoyalty Disputes

Game developer Chris Sawyer is suing Atari for $5 million U.S.D. after forensic accountant audited reveals royalty payment shortfalls. Atari had petitioned the British High Court to choose New York as the appropriate forum. The court disagreed and the case will proceed in Britain.

Sources: Gamasutra  |  gamingindustry.biz  |  Gamespot  |  GameDaily

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Developers Threaten Digital Jesters with Legal Action

Categories: Publisher/Developer CasesRoyalty DisputesStruggling Firms

The UK Game publisher Digital Jesters has been accused by game developers of breaking contracts, failing to account for royalties, failing to pay game studios and otherwise breaching their contracts.

Source: GamesIndustry.biz

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Audit Rights – Use Em or Lose Em!

Categories: Featured ArticlesIndustry ContractsRoyalty DisputesStartup Game Developer Issues

Attorney Tom Buscaglia takes a look at royalty audits, a provision in most publisher contracts that few developers choose to exercise, but, Buscaglia suggests, many should.

Source: GamaSutra Feature

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Peter Jackson Sues New Line over Video Game Licensing

Categories: Licensed Game CasesPolice ActionsRoyalty Disputes

Jackson makes 19 allegations, among them that New Line improperly deducted costs relating to home video, used the wrong royalty rate to compute DVD sales, charged too much for subdistribution, did not pay for use of the film’s script and a song lyric written by Ms Walsh in an accompanying video game and incorrectly valued their cut from merchandise sales.

Sources: Gamasutra | Times Online | New York Times | EuroGamer | UGO | Joystiq | BBC | Video Business

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