38 former and current employees of Infinity Ward, the US developer behind the Call of Duty: Modern Warfare series, have sued Activision Blizzard claiming that they are owed between $75 million and $125 million in unpaid royalties and potentially more in compensatory damages, reports the LA Times.
This lawsuit follows on from the lawsuit by former Infinity Ward heads Vince Zampella and Jason West against Activision for “substantial royalty payments” relating to Call of Duty: Modern Warfare 2, which they commenced following the termination of their employment by Activision on the grounds of “breach of contract and insubordination”. My early thoughts are on that are here. Activision subsequently filed a defence and counterclaim which set out a very different account of events and raised some real legal issues for West and Zampella. You can read more on that here. Subsequently, a number of Infinity Ward employees left that company and some joined a new startup formed by West and Zampella, called Respawn Entertainment.
According to the LA Times, of the 38 employees involved in the lawsuit 21 are former employees of Infinity Ward and 17 still work there. Another lengthy quote from the LA Times as to what the lawsuit is about:
“The lawsuit says that Activision owes Infinity Ward employees a bonus pool of at least $118 million, of which $82 million is supposed to go to employees other than West and Zampella.
It alleges that the publisher has withheld royalty payments in order to keep them from leaving as their former bosses did, putting at risk the potentially hugely lucrative release of Call of Duty: Modern Warfare 3 planned for late 2011.
‘Activision engaged in this inappropriate course of conduct in an attempt to force employees of Infinity Ward to continue to work at a job that many of them did not want just so Activision could force them to complete the development, production and delivery of Modern Warfare 3,’ the suit says.”
Activision responded to the LA Times that it “believes the action is without merit…Activision retains the discretion to determine the amount and the schedule of bonus payments for [Modern Warfare 2] and has acted consistent with its rights and the law at all times. We look forward to getting judicial confirmation that our position is right.“
Clearly, there is an ongoing power struggle between West/Zampella and Activision for the future of Infinity Ward. In the West/Zampella lawsuit this covers contractual, IP and creative control of the Modern Warfare series, but outside of that there is clearly a battle going on for the Infinity Ward employees themselves.
What is really interesting about this lawsuit is the report that 17 of the current Infinity Ward employees have joined the lawsuit. It is not very often at all that an employee sues his employer while still in its employment and the consequences in terms of the employment relationship are seldom good.
The other interesting point is where this goes in the future. According to the LA Times, the plaintiffs have requested that their lawsuit be consolidated with the West/Zampella lawsuit. If this was approved by the court, it would mean all of those employees lining up with West and Zampella against Activision in one claim, the financially value of which would increase substantially quite apart from the political value of having so much of Infinity Ward involved in the lawsuit. In the meantime, Activision will be considering now what next steps to take in this legal battle – will they try to cut it short, or let it run all the way?