>Like many industries, the video game industry has seen a rise in Chapter 11 bankruptcy filings. Large corporate bankruptcy cases can be complicated and intimidating affairs, but for the savvy investor (or the savvy competitor), they can present tremendous opportunities. Traditionally, companies filed Chapter 11 to restructure their debt and emerge from bankruptcy as a more efficient going concern. It is becoming more common, however, for companies to file bankruptcy and quickly sell some or all of their assets and liquidate the remainder. These transactions are commonly referred to a “363 sales” (named after the applicable Bankruptcy Code section). Such sales can involve any asset of a bankrupt company, including intellectual property rights, and a prospective buyer has an opportunity to acquire a desired asset at a discounted price. However, because of the particularities of the bankruptcy proceeedings, there are some choppy waters that a prospective buyer needs to successfully… Continue Reading
>A soured game publishing deal has ended in litigation between the developer and publisher. Last Friday, Duke Nukem Forever publisher Take-Two Interactive sued developer 3D Realms’ parent company, Apogee Software Ltd. Take-Two is accusing 3D Realms of failing to deliver on a contract to produce Duke Nukem Forever after Take-Two paid $12 million in 2000. The success of Take-Two’s suit may depend on how well-defined the obligations are within its publishing agreement with 3D Realms.Earlier this month, there had been rumors that 3D Realms had shut down, and 3D Realms did confirm that the Duke Nukem Forever development team was let go on May 6. However, today, 3D Realms issued a statement declaring that it is not going out of business. The statement said 3D Realms has not closed down entirely, and 3D Realms still retains ownership of the Duke Nukem-related intellectual property. 3D Realms says it will continue to… Continue Reading
>The PalTalk v. Microsoft case we’ve been following settled out last week in the midst of trial. Back in 2006, Paltalk sued Microsoft, alleging that communications through Xbox LIVE (either on the original Xbox or the 360) infringes two of its patents, 5,822,523 and 6,226,686. The trial began in March, and was ongoing until Microsoft and PalTalk filed a stipulation with the court saying that the claims and counterclaims between the parties should be dismissed, and that each party would cover their own costs and attorneys’ fees. Unfortunately, we won’t get any idea of who came out on top, since the terms of the settlement are confidential. But, at least we know that Xbox LIVE won’t be going offline as a result of this infringement suit.
>The law surrounding an athlete’s right of publicity is fluctuating faster than Brett Favre’s retirement plans, and game companies ought to be paying attention. This week, Sam Keller, a former college quarterback, filed a class action in the U.S. District Court for the Northern District of California against Electronic Arts and the NCAA for using college athletes’ images and attributes in EA’s line of NCAA video game titles. The right of publicity is the right of a person to control commercial use of his or her name, image, likeness, or some other identifying aspect of identity. According to the lawsuit, there are close similarities between real-life college athletes and the virtual athletes in EA’s games. “Electronic Arts matches the player’s skin tone, hair color and often even a player’s hair style…” The complaint also alledges that EA’s virtual athletes are depicted with unique accessories, such as wristbands, glasses, visors and… Continue Reading