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Activision Counter-Sues Call of Duty Creators

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The Modern Warfare 2 drama-train is on the move again. After ousted Infinity Ward studio heads Jason West and Vince Zampella sued Activision over a month ago, it has been relatively quiet until two lead developers resigned from the studio earlier this week.

Now, it's Activision's turn, filing a counter-suit against West and Zampella accusing them of creating "an unlawful pattern and practice of conduct that was designed to steal the [Infinity Ward] studio, which is one of Activision's most valuable assets -- at the expense of Activision and its shareholders and for their own personal financial gain," according the LA Times.

The suit reveals that Activision is hoping to release Modern Warfare 3 in late 2011, but the company alleges that West and Zampella actively delayed pre-production on the sequel.

The suit also accuses West and Zampella of going "on a secret trip by private jet to Northern California, arranged by their Hollywood agent, to meet with the most senior executives of Activision's closest competitor." This is line with rumors that the duo were meeting with competitors to shop a new intellectual property to publishers outside of Activision with Electronic Arts chiefly among them.

EA spokesman Jeff Brown said, "We don't have the time to comment on the many lawsuits Activision files against its employees and creative partners," perhaps referring to the fact that Activision had previously dropped Tim Schafer's Brutal Legend, only to sue Shafer's Double Fine after the title was picked up by EA.

As for this lawsuit, West and Zampella's lawyer Robert Schwartz has called the counter-suit's allegations "false and outrageous." The full statement answers each point raised by Activision, as predicted.

Activision also claims that West and Zampella attempted to block Activision's payout of royalties to IW employees "in order to make these employees easier to poach when West and Zampella executed their plans to leave the company and set up their own company."

The original lawsuit by West and Zampella seeks owed royalties and control of the Modern Warfare 2 IP. Activision's counter-suit calls for the recovery of payments handed to the pair "during the period of their disloyalty" as well as getting out of any future payments.

While these issues usually play out behind closed doors, something tells me that each side of the argument will continue to make very public statements about the other.

From The Chatty

  • reply
    April 9, 2010 7:37 PM

    Please link to the full statement you mentioned here...

    "As for this lawsuit, West and Zampella's lawyer Robert Schwartz has called the counter-suit's allegations "false and outrageous." The full statement answers each point raised by Activision, as predicted"

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      April 9, 2010 7:39 PM

      It's in the LA Times article text.

      The allegations Activision made today are false and outrageous. Just one example is Activision’s allegation that Jason and Vince conspired to spin off Infinity Ward. Activision itself proposed spinning off Infinity Ward when, last year, it sought to renegotiate Jason and Vince's contract and induce them to forego developing a new game in favor of doing another Modern Warfare sequel. Jason and Vince had hired the Creative Artists Agency to advise them in their negotiations with Activision, and not to breach their contract. The conversations with IW employees, talent agents, and others during these negotiations with Activision were conducted to see if Activision's proposal could work, and not in disrespect of their obligations to Activision.
      Activision's inaccurate and misguided allegations lose sight of the reality here: None of the false claims of insubordination or breach of duties had any negative affect on Activision -- none. Modern Warfare 2 has been the world's most successful video game. And none of this changes the fact that Jason and Vince would still be at Infinity Ward developing new games except that Activision kicked them out. This is just an Activision tactic to avoid paying Jason and Vince and everyone else at Infinity Ward the millions of dollars they all earned and that Activision owes them. Since being fired by Activision, Jason and Vince have taken steps to regain control over their creative future and plan to have an announcement very soon.

      • reply
        April 9, 2010 7:42 PM

        And this line is interesting, suggesting that the MW2 royalties still haven't been paid out:

        This is just an Activision tactic to avoid paying Jason and Vince and everyone else at Infinity Ward the millions of dollars they all earned and that Activision owes them.

        Payout day was apparently supposed to be April 1. I believe that the brief filed by West and Zampella's counsel in early March also said that royalties weren't paid, but it's alarming to see that apparently they STILL haven't been paid.

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          April 9, 2010 7:50 PM

          Of course they wont pay them, they wont pay them until those guys hand over the rights to MW or "games made after The Nam and Near Future" It is MOST IMPORTANT that Activision gets CONTROL of MW because then they could make as many games a year as they want, they could make a MW game every year for consoles, one for gameboy DS, one for PSP, three for iphone, DLC up the ass. So much free money. But right now they don't have control and they can't do it without West's and Zampellas permission.

          The money they stand to make by raping the MW franchise as much as possible pales in comparison to the money they would lose by paying these guys... so I imagine that's whats going on here. Sue them, create legal annoyance, and hold their money hostage and hope they will trade the rights to control the MW franchise for their money and the lawsuits to go away.

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            April 9, 2010 7:52 PM

            I wrote that backwards, the money Activision stands to make by controlling MW franchise makes the money they would lose by paying these guys their bonus look like nothing. A great deal for Activision for sure.

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              April 9, 2010 8:05 PM

              Yeah. So maybe this will go to trial.

              A summary of the apparent demands in the legal battle, from the LA Times blog article, and the scans of the brief last month from the counsel of West and Zampella:

              Demands in the West and Zampella brief against Activision (March 4, 2010):

              - $36 million in royalties and damages
              - control of "Modern Warfare" brand
              - injunction against Activision releasing post-Vietnam "Call of Duty" title


              Demands in the Activision brief against West and Zampella (April 9, 2010):

              - withhold all future payments to West and Zampella
              - recover past payments to West and Zampella "during the period of their disloyalty"
              - compensatory damages

              I'm thinking back to the announcement of Sledgehammer getting handed the opportunity to make an "action-adventure game" in the Modern Warfare franchise (and the Giant Bombcast guys joking about "God of Warfare"). And now, Activision's saying that West and Zampella apparently flew to Redwood Shores, though the LA Times report doesn't say when (perhaps the complaint will; perhaps it won't). This whole thing should be made into a business drama movie sometime.

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              April 9, 2010 8:10 PM

              And I thought that Activision owned the rights to "Modern Warfare". Behold, the copyright string from Modern Warfare 2 (from XBox.com):

              © 2009 Activision Publishing, Inc. Activision, Call of Duty and Modern Warfare are registered trademarks of Activision Publishing, Inc. All rights reserved.

              West and Zampella probably felt that they controlled that, but on the game boxes, that's what it says.

              • reply
                April 9, 2010 8:14 PM

                It's a bit more complicated than that.

                Before MW2 released, Activision, which owns IW completely, resigned West and Zampella to contracts. In that contract, control over MW was seemingly given to West/Zampella along with veto power on any Call of Duty game.

                Additionally, that agreement said that no one could make a CoD game beyond Vietnam except IW.

                • reply
                  April 9, 2010 8:25 PM

                  Thanks; I forgot about that. That's going to be an interesting point of contention if this ends up going to a trial. I'm eager to read the whole complaint from Activision, but the the report from the LA Times makes it sound like Activision thinks they still own the rights to the Modern Warfare and Call of Duty brands. But that's good old blind assertiveness from lawyers.

                  I pity the judge who ends up with this case.

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                    April 10, 2010 11:31 AM

                    "Activision thinks they still own the rights to the Modern Warfare and Call of Duty brands."

                    As I understand this West and Zambella don't dispute that at all, they just claim to have certain veto rights and creative control over the Modern Warfare games or COD games set in modern times.

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                  April 9, 2010 9:17 PM

                  My understanding is they have veto power on any post Vietnam games. So those two guys don't OWN the MW or COD franchise..... but without some agreement neither Activision nor West/Zampella can make more post Vietnam games or Modern War games.

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                    April 9, 2010 9:17 PM

                    Well West and Zampella can probably make post Vietnam games, just not under the COD or MW name.

                    • reply
                      April 9, 2010 9:32 PM

                      Maybe they can license the "Modern Combat Sandstorm" trademark from Gameloft.

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                      April 10, 2010 11:40 AM

                      "Well West and Zampella can probably make post Vietnam games,"

                      It might be more complicated than that, I know this was a different deal but just to illustrate how some of these contract terms look like when Remedy and 3D Realms sold the Max Payne IP that contract contained the following clause(The definition of a competitive product is at the end) :

                      "(i) Each Seller individually covenants to Purchasers that, subject to the provisions of Section 6(f)(ii), from the Closing Date until the tenth (10th) anniversary of the Closing Date, such Seller shall not (without the prior written consent of Purchasers), and no principal stockholders or partners identified on the signature page to this Agreement shall (without the prior written consent of Purchasers), knowingly permit any of its subsidiaries, Affiliates, officers, directors, employees, agents or representatives (collectively, the "Covenantors"), directly or indirectly, to (x) develop, produce, build, design, or otherwise create in any manner, any Competitive Product, (y) enter into a transaction to acquire (whether by merger, asset purchase or otherwise similar type transaction) any Competitive Product or any competitor of the Purchasers then developing or owning a Competitive Product, or
                      (z) as a sole proprietor, member of a partnership, stockholder, investor, officer or director of a corporation, or as an employee, associate, consultant or agent of any person, partnership, corporation or other business organization or entity, render any service (including the making of investments in or otherwise providing capital to) directly or indirectly related to a Competitive Product for or on behalf of any competitor (or any person or entity that is reasonably anticipated to become a competitor within the term hereof) of the Purchasers or their respective subsidiaries or Affiliates. A person, partnership, corporation or other business organization or entity is "a competitor of the Purchasers" if it is then designing, developing and/or marketing any Competitive Product. For purposes hereof, a "Competitive Product" is any original third person perspective 3D simulated game based in a modern (currently timed) urban city (e.g., Los Angeles, Tokyo, London, New York, Chicago, Las Vegas) with a male main character in the role of a police officer or ex-police officer."

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      April 9, 2010 8:41 PM

      Are they.. Truly outrageous? Truly, truly, truly, outrageous?

      • reply
        April 9, 2010 9:49 PM

        Gem is my name, no one else is the same!

        Gem is my name!

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      April 9, 2010 10:11 PM

      and this is why i hope Valve never gets bought.....

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        April 9, 2010 10:45 PM

        ...and why I'm glad that Id Software got bought by a privately held company that doesn't have to answer to shareholders.

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        April 9, 2010 11:51 PM

        That Steam thang makes me thank Valve's the one to do the buyin'

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          April 10, 2010 1:02 AM

          If valve got bought it could have a rather large impact on PC gaming do to the control of the most popular digital game marketplace changing hands.

          As I understand things though the money they make from the Steam platform dwarfs the money they make from games so much so that it doesn't matter if they sell any of their own games at this points.