JAKKS is more than happy to reenter into its WWE licensing deal with THQ, but the gaming company isn't so sure it's ready to make a commitment. After JAKKS signed on the dotted line to extend its gaming agreement with the wrestling group for five years, THQ sued the toymaker, saying it wasn't ready to make a decision and that JAKKS had no right to sign the agreement without THQ's consent.

There were some reportedly shady dealings when JAKKS originally got the contract -- perhaps THQ wants to get the whole pie for itself. Who knows? Either way, the two companies have entered into arbitration, so hopefully the tiff won't have an impact on releases.

Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games:

Terra Nova recently posted a note about a Craigslist case that could have some impact on the gaming space. It relates to theories about how players could sue other players, which is something that briefly came up in a World of Warcraft suit two years ago (which settled before going to court). The result of the case was, in no uncertain terms, that a lawsuit under a third-party beneficiary theory could be entirely blocked by a well written Terms of Use. That's not to say that all cases involving third parties are barred, as another World of Warcraft legal battle, the Glider case, was successful; though primarily based on tortious interference. So, while some potential sources of player-versus-player lawsuits may be now foreclosed, I still think there's a range of potential suits that could become prevalent.

Of course, this theorizing requires a basic understanding of third party-beneficiaries, and that goes all the way back to the basics of contracts. In a simple contract, there are generally two parties. A basic sales transaction is probably the simplest contract. Say you go to GameStop to purchase inFAMOUS: You give the clerk your $59.99 plus tax, and he gives you the game and a receipt. That was a basic contract for the sale of goods, and the receipt is evidence of some additional terms of the contract for sale, such as the return policy.

According to the Courthouse News Service, a federal class action lawsuit has been brought against Square Enix for allegedly lying or "concealing its monthly fees, penalties for late payments, interest, restrictions and other things that should have been filly disclosed at points of purchase" for the MMO Final Fantasy XI.

Plaintiff Esther Leong of San Francisco is seeking more than $5 million for what she alleges to be "unfair business practices, false advertising and unjust enrichment."

It's unclear how Square Enix has hidden the subscription nature of Final Fantasy XI from potential (or ongoing) players. The game's official website (above) clearly states a monthly fee is required to play the online-only title, when clicking a tab labeled "Monthly Fees" -- as well as listing the subscription-based nature of the game on all retail packaging. Fair warning from the far-flung future to any and all involved in this hilariously moronic suit, Final Fantasy XIV is an MMO too. Anticipate a subscription ... or at least prep for another lawsuit.

Update: LGJ columnist Mark Methenitis takes a closer look at the class action on his Law of the Game blog.

[Via 1UP]

With Midway reportedly looking to sell off its Mortal Kombat assets, one concerned party hopes to peer underneath the tent the beleaguered publisher has pitched inside the U.S. Bankruptcy Court and settle the sticky issue of intellectual property ownership. Film producer Lawrence Kasanoff and his company, Threshold Entertainment, have filed a suit in the hopes of eliciting judgment "declaring the existence and scope of its licenses, interests and intellectual property rights in Mortal Kombat-related intellectual property." In other words: "Hey, isn't that some of my stuff in this garage sale?"

It is the suit's assertion that the Mortal Kombat franchise is "far more a creation of Threshold and Kasanoff than of Midway," with Threshold's film adaptations and TV shows allegedly signifying more creative input than that of Midway, which was "almost entirely limited to the videogames." That's right! Bet you didn't know that Mortal Kombat was a "videogame" before it became an award-winning film franchise!

Threshold backs up its claims by pointing out the "minimal back-story and mythology" provided by the games, as well as the "flat, cookie-cutter characters" it had to use as a basis for its derivative works. Indeed, anybody who's seen "Mortal Kombat: Annihilation" is sure to agree that the 78 characters in that rich, compelling film -- including the cyborg and the lizard guy -- were so much more fleshed out right until they all died or something.

[Via GamePolitics]

Source -- Complaint (warning: PDF)

Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games:

Maybe you heard about the verdict that just came out in one of the music file-sharing cases: $1.9 million for 24 songs. So, what does this have to do with gaming? More than you would probably imagine, since this gets to the root of copyright and statutory damages. In fact, EFF legal scholar Fred von Lohmann posted an interesting piece on whether the penalty is even Constitutional. Whether this is the suit that breaks the back of statutory damages has yet to be seen, but it's something that any media producer or consumer should be keeping an eye on.

Of course, much of that may be getting ahead of the issue of explaining this decision in greater depth so that everyone can understand what the actual problem is. We've talked about copyright infringement and piracy at length on LGJ, and the issue here is what comes after someone is found to have infringed on a copyrighted work: damages. Specifically, we're talking about statutory damages, which something a lot of people may not be very familiar with at all.

A new lawsuit by former employees of Factor 5 claims the company fraudulently shifted assets to avoid ponying up $900,000 in unpaid wages to employees and millions to creditors. The Marin Independent Journal reports the suit outright states that the company stopped paying workers on November 1, 2008 and let them go on December 19. That explains why there were rumors of the company shutting down six months before the official closure announcement was made in May.

As for the alleged fraud, the suit claims that Factor 5 moved assets (source code and other IP) into a company, now called White Harvest, to shield it from creditors. The plaintiffs claim that the company is being run by the same people, same lawyers, "with all the same management and ownership and control," and is performing the same work that Factor 5 was up to -- just with a new name and address. Expect to see more about this kerfuffle in the future.

[Via Gamasutra]

Say what you will about the American legal system, at least the thing is speedy. After all, in late April EA was denying it knew anything about a lawsuit between the NFL Players Association and retired players, and now said players have been awarded $26 million dollars a judge decided they were owed from the sale of games like Madden.

Oh, and sorry if you thought we were talking about that other Madden suit, that one is still in the courts. Man, how do the players keep getting suits on over all their pads?

We feel like we're in some kind of topsy-turvy bizarro dimension this morning. Not only did a couple of guys sue EA for having a monopoly on football games, but a U.S. District Court Judge in San Francisco has said the case can move forward, denying the company's request to dismiss it. In the process, the judge recognized that "interactive video football software" is a distinct enough market for antitrust consideration.

Next up on Joystiq: Valve reads anti-Left 4 Dead 2 petition, totally cancels it. At least the Madden guys have a fair argument, which GP lays out for you right here.

We'll be straight with you -- the whole Midway legal debacle is far from over. We are, however, one step closer to the dissolution of Midway as it stands now, with the company's creditors and 87% shareholder Mark Thomas reaching an agreement and ending at least one lawsuit. After purchasing the stocks from former majority shareholder Sumner Redstone for the low, low price of $100k, Thomas is cashing out -- he'll be receiving "as much as $5 million ahead of other creditors, whose claims aren't backed by collateral," according to Bloomberg.

The lawyer representing Midway's creditors, Linda Dakin-Grimm, told Bloomberg, "The committee is satisfied with the settlement," noting that it would allow for efforts to collect on other debts to proceed. Warner Bros. Interactive has already put in its $33 million bid for the company, whose auction will end on June 29.

Though many questions remain unanswered regarding the relationship between Sumner Redstone, Midway's Board of Directors and Mark Thomas, one thing is absolutely certain: the folks still employed by Midway are not profiting from the executive shenanigans. We wish them the best and encourage any employee who would like to speak up about their time at the troubled publisher to contact us, anonymity ensured.

[Via GamePolitics]

Yahoo reports that Activision filed a lawsuit against Double Fine, developer of the Jack Black-fueled Brütal Legend, on Wednesday to "stop the release" of the game. The mega-publisher claims to have invested "roughly $15 million" into the game's development and that "it still has a valid contract to release the game," despite Double Fine transferring rights to Electronic Arts late last year.

Last February, Electronic Arts responded to Activision's saber rattling saying, "We doubt that Activision would try to sue. That would be like a husband abandoning his family and then suing after his wife meets a better looking guy." Yeah ...

So, to recap:

1. Sierra is subsumed into Activision, following the Activision Blizzard merger
   
2. Activision drops much of Sierra's lineup, including Brütal Legend
   
3. Brütal Legend looks for another publisher, but Activision is "blocking the process"
   
4. EA Partners swoops in as the game's new publisher
5. Activision sues Double Fine (that's this post)
   

Apparently, struggling publisher Midway has more than just Warner Bros. bidding on its remaining assets. After last week's announcement of WB's $33 million dollar offer to acquire the lion's share of Midway's properties, Midway released a statement today detailing the process and, in so many words, is allowing for larger bids. "Midway recently announced a stalking horse asset purchase agreement, which is expected to receive court approval, subject to higher or better bids, in a hearing on June 2, 2009," reads the statement. Additionally, all remaining assets owned by Midway are available for bidding as well -- including the TNA Wrestling franchise not included in the WB bid -- until the court-supervised auction takes place on June 29th.

Midway's Geoff Mogilner told Joystiq this afternoon that today's release "doesn't change that agreement [with WB]" and either side will suffer financial penalties for backing out. He also noted that the acquisition has no effect on the development teams employed by Midway as "people aren't assets." Yet, Geoff. Yet. Seriously though, he told us that any bidder wishing to acquire development teams would have to engage in a "separate acquisition" and any winning bidder on Midway's assets won't take on any of the massive debt the company is currently weighed down by. He also noted that the recipient(s) of the money from this auction have yet to be decided. Standing in line for a payout are a laundry list of creditors along with mystery man Mark Thomas.

Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games:

No, it's not a symptom of the dreaded Swine Flu, but there has been a seeming rise in disputes concerning "tortious interference" in the games industry as of late. The most notable example being the Scratch: The Ultimate DJ dispute. Of course, from the first appearance of that curious word "tortious," there's been much confusion; be it over the term's actual meaning or it being incorrectly interchanged with the non-legal word "tortuous" (meaning winding or twisting).

The word "tortious" comes from "tort," which is a civil wrong that results in damages. So, "tortious interference," from a definitional standpoint, is when someone intentionally interferes in someone else's business or contractual relationship and causes civil damage. These two varieties of tortious interference are not the same on a more detailed level, however.

It's been more than two years since Immersion and Sony settled their kerfluffle over the latter party's infringement on the former's "haptic feedback" (rumble) technology. However, Sony's not quite out of the woods yet -- it's currently the subject of yet another civil suit, filed this time by Craig Thorner, an engineer who also held a number of patents relating to haptic feedback.

Brace yourselves -- this gets confusing. After its settlement with Sony, Immersion was set to take on Performance Designed Products (PDP) for similar rumble-yoinking reasons. PDP contacted Thorner for some pre-litigious preparation. They negotiated terms for the licensing of his patents -- though Thorner used the same lawyers who represented Sony to help with said negotiation. His complaint is that these lawyers got him unfavorable results in the negotiation, including low royalty payments, and the inclusion of a provision that would grant a patent license to Sony.

So, technically, Sony's getting sued for patent infringement and legal malpractice. Hopefully, no suspected shady dealings will go down in this case. We'd hate to see Sony get stuck in some sort of inescapable infinite lawsuit loop.

Update: Turns out we've already turned your attention to this intense legal showdown. Consider this a helpful accidental reminder!

It's become clear as of late that Duke Nukem Forever has become a topic that we can't ignore. Today is no exception, with 3D Realms releasing its first public statement since the dissolving of the game's development team and saying that it's "not closed and is not closing." Though the developer admits Take-Two "retains publishing rights to the game [DNF]," it's positing an ability to "sell the game directly to the public."

Furthermore, the company is charging Take-Two with bully tactics for the way it has treated 3D Realms over the past year or so of negotiation. 3DR says Take-Two tried to force a "fire sale" out of the situation and due to this, 3DR left the table as of May 4. As the release pointedly notes, this was only two days before the news broke of the original events, and a flood of screenshots and video of the game was loosed on the public. Seems like we've got more litigation on our hands! Yeehaw!

If the development of Duke Nukem Forever was a troubled marriage, welcome to the nasty, drawn-out divorce.

Shacknews reports that court documents it obtained from the case of Take-Two Interactive vs. Apogee Software have the former demanding, well, custody of the unfinished game's source code. It also seeks to prevent Apogee from "disclosing, distributing, transferring or selling to any party other than Take-Two any proprietary information related to DNF." In short, Take-Two wants what it claims it paid for, and wants it now.

3D Realms co-founder, Scott Miller, wrote in a comment on Shacknews that the DNF developer "never saw a penny of that money," referring to the $12 million Take-Two says it paid Apogee for publishing rights to the game in 2000.

If there's anything positive to be taken away from this litigation situation, it's that Take-Two evidently plans on ensuring a return on its investment in DNF -- possibly to the extent of taking all the game's assets and continuing its development elsewhere.

[Via BigDownload]