Activision/EA lawsuit: The key courtroom battles

A trial date has been set for what one games lawyer has described as a “landmark lawsuit in the modern games industry”.

On May 7th, the two biggest games publishing empires in the West – Activision and Electronic Arts – will collide in a Los Angeles court.

CEOs Bobby Kotick and John Riccitiello could both be summoned, sworn to oath, and answer questions on company practices. Developers may be required to bare all on working conditions. Ex directors, such as EA’s John Schappert, could be asked to defend a company he no longer works with.

What’s at stake is even more extraordinary.

“Large amounts of money, the parties’ reputations and – above all – the control and future of the Modern Warfare franchise are all being fought for here,” says Jas Purewal, a games lawyer at Osborne Clarke and writer at Gamer/Law.

“As a result, if this case proceeds all the way it has the potential to become a landmark lawsuit.”

But there’s a real chance the fireworks display could be cancelled at any moment.

“It is always possible that the case will settle before it gets so far,” Purewal adds.

“The great majority of cases do settle prior to trial, after all. If however the case does go all the way to trial, it will be for the jury and judge to hear the evidence from all sides and then to reach a decision regarding each of the complex claims in this lawsuit.”

The legal row erupted in the most dramatic fashion. It was in March 2010 when two Infinity Ward directors, Jason West and Vince Zampella, were marched out of the Modern Warfare studio.

[TIMELINE – The INFINITY WARD ROW]

In a matter of days, the pair had lodged a lawsuit against Activision, and since then the case has grown to a monstrous size – with rival publisher EA, and another thirty-odd developers, thrown in.

Below Develop offers a breakdown of the key battles that will take place in court.

Jason West and Vince Zampella vs Activision (and countersuit)

West and Zampella are suing Activision for some $36 million in damages for alleged unfair dismissal and the unpaid royalties associated, Purewal explains.

But there is an arguably more pivotal prize for the winner in this claim: the most lucrative IP in the western world.

“The crux of this battle is the Call of Duty and Modern Warfare IP, over which West and Zampella have argued they have effective control,” Purewal says.

Activision denies liability and has counterclaimed against West and Zampella over the circumstances in which the pair had left Infinity Ward, claiming they were in contact with EA during their employment with a view to jump ship.

Activision vs EA

Months into the West Zampella vs Activision lawsuit, the Call of Duty publisher threw EA into the mix.

Activision alleges that EA improperly encouraged and assisted West and Zampella to leave Infinity Ward and join their company instead.

Purewal says EA has been accused of illicitly signing an employment contract with both Zampella and West, meaning in turn the pair have bought confidential information and personnel from their old employer to their new one.

Activision is claiming damages of up to $400 million; a “very substantial amount even for Activision and EA”, says Purewal.

Shortly after being dismissed, Zampella and West launched an independently owned studio, called Respawn. The group has hired a number of developers who were employed at Infinity Ward when under the command of West and Zampella. EA does not own the studio, but has signed a long-term publishing agreement with the group.

Infinity Ward Employee Group vs Activision

During the time of Zampella and West’s departure, a separate argument erupted over royalty payments allegedly owed to some Infinity Ward staff.

Known as the Infinity Ward Employee Group, the class-action lawsuit alleges Activision withheld bonuses and royalties for Infinity’s smash hit Modern Warfare 2 "in an attempt to keep the employees hostage so that Activision could reap the benefit of the completion of Modern Warfare 3".

The group want Activision to pay around 40 developers between $75 and $125 million.

Acording to the lawsuit documents, $28 million has been paid to Infinity Ward employees, but it claims that $54 million is still due from 2009 profits. The suit alleges "breach of contract, breach of the implied covenant of good faith and fair dealing, violation of California labor code". It is seeking damages as well as the allegedly unpaid royalties and bonuses.

Many of the staff named in the suit no longer work for Activision, though surprisingly some still do. Some have joined Respawn Entertainment (pictured above), while others have moved on to unrelated studios.

Activision has said the suit has "no merit". Earlier this year a district judge incorporated the case into the Activision vs EA vs Zampella and West lawsuit.