More on the Infinity Ward lawsuit: EA to join the party?

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UPDATE: apparently, West and Zampella have filed a response to Activision’s application to enlarge its lawsuit against them, basically complaining that Activision is trying to bankrupt them in the litigation.  Ouch.  Ofc, hopefully they have more substantive grounds for opposing Activision, but since irritatingly no one has published the court documents, I can’t check :/

So, there have been further developments in the most (in)famous recent lawsuit in the games industry: Activision v Jason West and Vince Zampella, which I’ve written about previously here and here


The key development is that Activision is seeking both to join EA to the litigation and to claim damages of some $400m from it as well.  Ouch.  More generally, further evidence is building up that this case is the first big film lawsuit type case (big studio v creatives and other big studio) in the games industry so far…

The story so far
  • Activision bought up 100% of Infinity Ward in the early Noughties for $5m. Infinity Ward generated a lot of revenue and critical acclaim for Activision through the Call of Duty series of first person shooter (FPS) games.
  • Activision approached studio heads West and Zampella after the release of Call of Duty 4: Modern Warfare to develop what became Modern Warfare 2, and offered to extend their employment contracts.  West and Zampella reluctantly agreed.
  • However, Activision now argues that – essentially – West and Zampella then engaged in a pattern of improper behaviour on a range of fronts, including demanding more money, withholding bonuses from their Infinity Ward colleagues, and then misappropriating Activision confidential information.
  • Earlier this year there was a confrontation between Activision, West and Zampella – which led shortly to West and Zampella leaving on acrimonious terms and Activision commencing this lawsuit.  It has just got nastier since then.
  • West and Zampella then formed Respawn Entertainment, backed by EA.
The new developments

Activision starts off the latest court document stating that, following disclosure of documentation in the lawsuit, new information has come to light which they claim shows that EA was actively involved in poaching West and Zampella.  You can find some of the colour at Joystiq, but essentially Activision says that EA worked at the very highest levels in order to persuade West and Zampella to join EA in order to boost its (allegedly) flagging efforts in the FPS genre.  In fact, Activision goes so far as to label this as a “destabilize, disrupt and attempt to destroy Infinity Ward” and as “corporate espionage”.
Activision also takes the time to go into some detail on EA’s recent history.  None of it is complementary, to say the least.  Activision even goes so far as to refer to “the fall of EA and the rise of Activision” and to discuss EA’s “precipitous decline in stature with investors, and most importantly, in the eys of games players who demand innovation and excitement”.
Activision also makes further allegations against West and Zampella, calling them “small minded-executives almost obsessed by jealousy of other developers” and claiming that they deliberately worked to damage other studios’ work (apparently this refers to Treyarch, another CoD developer).  Further, Activision claims that West and Zampella appropriated up to a third of the Infinity Ward bonus pool for themselves and refused to allow Activision to pay out bonuses to other IW staff.  Lastly, Activision claims that West and Zampella have been engaged in poaching IW staff and that they have retained confidential Activision information.
Activision now seeks to claim (among other things):
  • Damages against West and Zampella as well as recovery of all previous sums paid to them 
  • An injunction stop West, Zampella and EA from soliciting further Activision employees and from using Activision confidential information
  • From EA, damages/compensation for: 
    • The profits Activision would have made but for EA’s interference (I think this is the $400m bit)
    • Activision’s costs in rebuilding IW following the departure of West and Zampella
    • The loss caused by delay to Activision’s new games being developed by IW (presumably this is Modern Warfare 3)
IMPORTANT CAVEAT: Activision is not actually claiming all of this in the litigation yet – effectively it needs the court’s permission to do so.  As a result, there is a court hearing scheduled for January to hear these matters further.  Therefore, at the moment at least, EA is not technically a defendant to this lawsuit.
THOUGHTS
Activision and EA aren’t friends any more
Wow.  Activision is not pulling any punches with this lawsuit.  Not only are they suing EA for $400m, but they make some really quite aggressive comments about EA as well.  Until now, while Activision and EA haven’t exactly always been friendly to each other, my impression was that they had been relatively civil to each other recently.  Well that’s disappeared and I think the genie is out of the bottle for well and good on that front, too.
So, no settlement then?
Widespread industry speculation when the original lawsuit started was ‘ah, it’ll just settle’.  My experience as a litigator is never to make bets about whether a legal fight will settle or not – you just don’t know all the variables.  It might still settle.  But the fact that Activision has just massively expanded this case by seeking to add in the no. 2 games giant in the world suggests that settlement is not on their mind…not yet anyway. 
$400m is a lot of money

Well, it IS a lot of money – and that’s just the quantified bit of Activision’s claim, they’re actually after more than that.  IF successful in due course, that would put a decent dent in EA’s finances.  Who knows what impact that could have?
This is just like Hollywood
Two creative types help to build a huge blockbuster hit for their studio and then allegedly conspire with a talent agency to jump ship to a rival studio, only to find out their original studio partner is not a happy bunny and sues everyone.  Sounds like Hollywood?  Well, now it has come to the games industry…and I suspect we will see more of in the future.
This will just get nastier
There is a court hearing in January 2011.  Trial is set for May 2011.  We have a volatile mix of companies and individuals involved.   They are already throwing about incendiary allegations about each other, which Activision says it can prove with documents.
From what I can see (though court documents alone are only part of the story), it seems to me that Activision do seem to have some legitimate grievances, IF it is correct that EA sought actively to poach West and Zampella while all of them were aware of their contractual obligations to Activision.  On the other hand, we have yet to see West and Zampella’s response, who will no doubt continue to argue that Activision made their life impossible.
Ultimately of course, all of the hyperbole will have to draw to a close and the court will have to decide the relatively simple issues of law in this litigation: what do the employment agreements and related documents say, did West and Zampella breach their obligations therein and did EA encourage or assist those breaches?
Here’s looking forward to 2011… 

UPDATE: Eurogamer asked my views on whether Activision could attempt to block Respawn’s next game.  Short answer: I said yes.  More here: http://www.eurogamer.net/articles/2010-12-23-will-activision-block-respawns-ea-game ! 


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[Image credit: Gamerant/Activision]

2 Responses to “More on the Infinity Ward lawsuit: EA to join the party?”

  1. Martin

    I dont care who makes the Call of Duty games as long as there as good as usual. Personally I think Infinity Ward is fail because all though their games are awsome there are way to many hacks and glitches that they never bother to fix. (Challenge Lobbies, Elevator Glitches, One man army) GET IT DONE!

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