19 June 2011

EA and Activision Multi-Million Dollar Legal Scrap Set To Begin

I could attempt to explain this (and believe me I did) but Tom Ingham of CVG put it in better words than I ever could.

by Tom Ingham of CVG

"A Los Angeles Superior Court judge this week ruled that there were enough facts to support allegations from former Infinity Ward chiefs Jason West and Vincent Zampella that Activision Blizzard defrauded the duo to the tune of $125 million - meaning the path is now set for a full hearing later this year.

The pair are suing the US publisher, headed up by Bobby Kotick, for being fired before receiving what they claim were deserved royalty payments.

The duo claim that Activision promised them control of the Modern Warfare series - as well as increased royalties for Infinity ward on income over $50 million on future games. However, they say that they were removed in 2010 (forcibly, if you remember) before the due payment of over $125 million in royalties was to be made.

West and Zampella's attorneys will be able to question Activision Blizzard CEO Kotick directly as part of the case.

The news follows a ruling from back in March, when another L.A superior court judge ruled that Activision also had sufficient claims against Electronic Arts, for interfering with West and Zampella's contract.

Click to view larger image
Judge Berle sided with Activision to pursue its countersuit litigation against EA, West and Zampella.

Activision is seeking $400 million in damages for "tortious interference, unfair competition, and breaches of fiduciary duty".

It claims that EA executives made secret attempts to lure the Call of Duty creators as early as July 2009 - pointing the finger at EA CEO John Riccitiello in particular.

West and Zampella set up new studio Respawn Entertainment in April 2010. The US company is being funded by EA as part of the publisher's Partners programme.

No product has yet been revealed by Respawn. It is thought to have been creating a game since May 2010, whilst staff wearing the company's logo on their T-shirts were out en masse at E3.

Following West and Zampellla's removal from Infinity Ward, 46 staff left the Modern Warfare creator - 38 of whom have now declared that they have signed with Respawn.

In amongst a host of catty comments that have emerged on both sides of of the case, Activision has labelled the pair "self-serving schemers".

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Activision in the dock: West and Zampella's claim for $125m unpaid royalties:
First filed: March, 2010

- Activision defrauded the founders of Infinity Ward by not releasing "substantial royalty payments"

- Activision is also liable for for breach of contract, breach of the implied covenant of good faith and fair dealing, wrong termination in violation of public policy, and declaratory relief

- West and Zampella's right to "control Modern Warfare-branded games" has been violated - and the duo want partial future control of the MW Brand

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EA, West and Zampella in the dock. Activision's claim for $400m in damages:
(First filed: April 2010. EA added to suit, December 2010)

- EA execs began a conspiracy with West and Zampella whilst the duo were still Activision employees

- Electronic Arts "intentionally interfered with contracts, engaged in unfair competition, and aiding and abetting breaches of fiduciary duty by West and Zampella"

- West and Zampella refused to sign standard exit documents that testified they had returned all Activision property, including game development code

- West and Zampella were "motivated by envy and personal greed" and intentionally released game trailers for Modern Warfare 2 on the same day that Treyarch posted promotion videos for Call of Duty: World at War DLC"

So yeah.... There you go.

Who do you think is in the right?

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