Lawyers in Canada: Davis LLP - Legal Advisors Since 1892

Midway's Rollercoaster Continues - Creditors Sue Board Members

Submitted by Sylvie Lang
On May 12, 2009, Midway creditors filed suit against former and current members of Midway's board, former major stakeholder Sumner Redstone, his daughter and former chairperson, Shari Redstone and current owner Mark Thomas, among others.
The suit alleges that the defendants were engaged in wrongdoing, including unjust enrichment, breach of fiduciary duty and corporate waste, while Midway's board members (many of whom have direct ties to Sumner Redstone) watched from the sidelines.
Creditors claim that Sumner Redstone secretly sold Midway to Thomas for a nominal amount which created over $700 million in tax losses for Redstone and his holding company, enabling them to obtain a huge tax refund. Creditors have asked the court to annul the sale of Midway as fraudulent. Creditors have also asked that the $90 million Redstone invested in the failing gaming company and characterised as "debt" be re-characterised as equity because it was issued as such.
Coverage atGameDaily.com, Gamasutra, LA Times Blogs

Duke Nukem Forever or Never?

It has been reported that Take-Two Interactive Software Inc. ("Take-Two") has filed a lawsuit against Apogee Software Ltd. because of the developer's "continually delayed" delivery of the game Duke Nukem Forever, a project that has been ongoing since 1997 . Publisher Take-Two had purchased the publishing rights to the game in 2000 for over $12 million dollars.

It is to be noted that Apogee Software Ltd. is a 3D Realms-related entity and is a different entity than Apogee Software LLC who is the developer behind the Duke Nukem Trilogy.

It has been reported that the complaint states that "Apogee repeatedly assured Take-Two and the video-gaming community that it was diligently working toward competing development of the PC Version of the Duke Nukem Forever." However, despite these assurances, it has been reported that 3D Realms has shut down its doors. It has also been reported that Take-Two had offered cash incentives to 3D Realms for the completion of the game. Nevertheless, it seems that the developer is now out of money and may owe more than expected.

Coverage at Kotaku.com, Gamasutra.com and Gamedaily.com.

RCMP and York Police Arrest DVD Pirates

Much criticism has been leveled at Canada regarding its copyright laws; however, the news isn't all bad. Following a six-month investigation, the RCMP and York Police, in a collaborative effort, have arrested five men (Huici Chen, 36, Chung Ping Pang, 37, Tongjin Chen, 62, all from Markham, Ya Ouyang, 29, of Scarborough and Huixin Chen, 27, of Brampton) for multiple breaches of the Canadian Copyright Act for pirating movies including "Slumdog Millionaire", the "Curious case of Benjamin Button" and "James Bond: Quantum of Solace".

You might remember that in Louis Vuitton Malletier S. A. v. 486353 BC Ltd. et al (2008 BCSC 799), the Supreme Court of Canada sent a strong message to infringers of among other things, copyright, by awarding statutory damages of $20,000 per work, and $300,000 (total) in punitive and exemplary damages which were awarded (jointly and severally) against the defendant corporation and two employees.

If convicted, the five men in this most recent case could face fines of up to one million dollars and/or imprisonment of up to five years.

http://www.thestar.com/gta/crime/article/630068

BIG FISH GAMES ACQUIRES GRUBBY GAMES

Seattle based Big Fish Games who works with more than 500 game developers has acquired Vancouver based Grubby Games, the creator of Incredibots and Professor Fizzwizzle.

The acquisition of Grubby Games was attractive to Big Fish Games because of its talented group of developers and its strong cultural fit.

Big Fish's president and CEO, Mr. Jeremy Lewis told Gamasutra that the company plans to expand and acquire more studios that are aligned with its strategic vision.

Coverage at:Gamasutra

Controller Patent Problems Still Rumbling for Sony

An interesting and complex case was reported on GamePolitics last week, alleging patent infringement as well as fraud, conspiracy and attorney malpractice against Sony, PDP/Electro Source and their attorneys.

According to the plaintiffs, Craig Thorner and his company Virtual Reality Feedback, the defendants attempted to use Mr. Thorner's patent for force feedback technology to gain a tactical advantage in Sony's battle with Immersion and appeal from the resulting $82M judgment.

Thorner claims that the lawyers for Sony and PDP "contrived to take advantage of Thorner's inexperience and lack of resources in order to (i) obtain a patent license from Thorner on extremely favorable terms, and (ii) induce Thorner to testify against Immersion." A number of serious allegations are made in the claim, including that Sony deliberately hid its partnership with PDP from Thorner in order to keep the licensing fees low. Thorner was also eventually sued by Immersion, and was found to have been an unreliable witness by the judge in original Sony case.

Coverage at GamePolitics and Law.com. A copy of the claim is available here.

Our coverage of the Sony v. Immersion suit is available here.