<![CDATA[Kotaku: lawsuits]]> http://tags.kotaku.com/assets/base/img/thumbs140x140/kotaku.com.png <![CDATA[Kotaku: lawsuits]]> http://kotaku.com/tag/lawsuits http://kotaku.com/tag/lawsuits <![CDATA[No Doubt Sues Activision Over Band Hero Likeness [Update]]]> Activision is catching legal heat from band No Doubt over the group's appearance in the recently released Band Hero. No Doubt is suing Activision, seeking damages for turning the act into "virtual karaoke players." Sound familiar?

No Doubt says in a statement that the band "agreed to place avatars containing their name and likeness performing three No Doubt songs" but that Band Hero allows their use in more than 60 other songs, all without the group's knowledge or approval. (No Doubt's "Don't Speak" and "I'm Just A Girl" appear in the console versions of Band Hero, with "Excuse Me Mr." featured in the Nintendo DS version.)

Furthermore, individual band members can be "isolated into solo performances of these cover songs and placed randomly in countless variations."

According to No Doubt's claim, that goes against the contract it signed with Activision granting its likeness in Band Hero. It also contends that Activision refused to change the band's appearance beyond the agreed songs, saying that catering to No Doubt's request would be "too expensive."

The publisher of Band Hero raised the ire of Kurt Cobain's widow Courtney Love—as well as former Nirvana members Dave Grohl and Krist Novoselic—for the singer's inclusion in Guitar Hero 5. In that game, the late Cobain could be used in non-Nirvana songs, performing any instrument, resulting in hastily Twittered fury from Love and requests from her attorneys to limit the musician's appearance in the game.

No Doubt is seeking an injunction and damages in the suit. We've contacted Activision to get its side of the story and will update with comment, should it provide any.

Update: Activision has responded with the following statement: "Some of the world's most popular and iconic artists have been featured in Guitar Hero as playable characters, and we are proud to count No Doubt among them. Activision has a written agreement to use No Doubt in Band Hero – an agreement signed by No Doubt after extensive negotiations with its representatives, who collectively have decades of experience in the entertainment industry. Pursuant to that agreement, Activision worked with No Doubt and the band's management in developing Band Hero. As a result, Activision believes it is within its legal rights with respect to the use and portrayal of the band members in the game and that this lawsuit is without merit. Activision is exploring its own legal options with respect to No Doubt's obligations under the agreement."

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<![CDATA[Bethesda Sues Interplay Over Fallout Trademark Infringement]]> Bethesda Softworks has filed suit against Interplay, the company it purchased rights to the Fallout franchise from in 2007, citing trademark infringement and attempting to terminate its right to make a Fallout-themed MMO.

The details of that case come from a complaint filed in the District Court of Maryland earlier this week. That complaint alleges that Interplay did not seek approval for the sale of the Fallout Trilogy bundle, which features the original Fallout, Fallout 2 and Fallout Tactics. Bethesda claims that the title Fallout Trilogy is "confusingly similar" to that of Fallout 3 and takes issue with Interplay's marketing, sale and distribution of other Fallout packages named Fallout Collection and Saga Fallout.

Bethesda also takes issue with Interplay's licensing of Fallout games to digital distribution services Good Old Games (GOG), GameTap and Steam, which Interplay was said never to have sought approval or permission for. Basically, Bethesda takes issue with pretty much everything Interplay seems to be doing with the pre-Fallout 3 releases, believing they cannibalize sales of Fallout 3.

The Fallout 3 developer furthermore wants to officially terminate Interplay's rights to create a massively multiplayer online game with the Fallout license. Bethesda believes that Interplay has breached its trademark licensing agreement by failing to enter into full-scale development of a Fallout MMO.

Bethesda threatened legal action over the Fallout MMO earlier this year, claiming that Interplay was slow to develop such a game and had failed to secure the proper funding for the game code-named "Project V13."

In short, it appears that Bethesda wants Interplay to stop selling the Fallout Trilogy and pay up any profits it made selling the trademark infringing games.

Bethesda purchased the rights to the Fallout property for $5.75 million.

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<![CDATA[Microsoft Settles Its $90 Million Halo Suit]]> Someone at sue-happy company PalTalk just got paid. Microsoft has settled with the company that filed suit against the Xbox 360 maker over patent infringement claims related to Halo multiplayer. Make it rain, PalTalk!

PalTalk hit Microsoft with a suit over a pair of patents in 2006, claiming that the multiplayer tech that powered some Xbox Live multiplayer games violated technology patents for "ways to control interactive applications over multiple computers," according to Bloomberg. Those patents were purchased from MPath Interactive Inc. by PalTalk for a sum of $200,000.

Exactly what denomination bill PalTalk patent holders will be making it rain with is unknown. Microsoft and PalTalk have not disclosed the terms of the settlement, putting the figure likely somewhere between $200,000 and $90,000,000. Microsoft spokesfolk would only say the agreement was "amicable."

The trial, which kicked off this Monday, has been cut short, thanks to the settlement.

Everybody back to your games of Halo 3. Everything's right with the world.

Microsoft settles lawsuit over Xbox [Bloomberg/Seattle PI]

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<![CDATA[Worlds.com Targets World of Warcraft, Second Life For Patent Suit]]> Virtual world patent holder Worlds.com filed suit against NCSoft in December, claiming its games, including City of Heroes and Guild Wars, were violating its patent for multiplayer virtual environments. And it won't stop there.

Worlds.com CEO Thom Kidrin says that the company "absolutely" has intentions of going after other big virtual world creators, including Blizzard for World of Warcraft and Linden Labs for Second Life, reports Business Insider. That depends, of course, if Worlds.com is successful with its suit against NCSoft.

Kidrin says that Worlds.com's patent for "System and Method for Enabling Users to Interact in a Virtual Space" dates back to 1997. It's based on the work done on the Steven Spielberg-backed Starbright World, a virtual world service design to "educate, entertain and inspire seriously ill children."

That patent were inherited by Worlds.com.

Don't worry, addicted MMOers. Looks like Kidrin and company are looking for a little cash in the form of licensing fees from Blizzard, et al. Your virtual world of choice won't likely be shuttered. But we'll see.

Worlds.com CEO: We're 'Absolutely' Going To Sue Second Life And World Of Warcraft (ATVI) [BusinessInsider via IncGamers]

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<![CDATA[Microsoft Sued For $90 Million Over Halo Patent Infringement Claim]]> New York based PalTalk Holdings filed suit against Microsoft over two years ago, claiming that the company violated two patents with its Xbox Live service, singling out the multiplayer infrastructure of its Halo games.

PalTalk wants $90 million from Microsoft, a case which went to trial in Texas this week, according to a report from Bloomberg. Lawyers have begun making their respective "Nuh-uh" and "Yuh-huh" cases.

According to PalTalk, which purchased the two patents under contention from company MPath Interactive Inc., Microsoft had met with the patent holders to evaluate their technology. Microsoft doesn't refute that claim, but said it decided to pursue other multiplayer technology solutions for Live, working with another party.

Microsoft asserts that PalTalk is overvaluing the patent's worth—which were purchased for $200,000—and that the the publisher's decision to seek alternative tech was "upsetting to PalTalk and its employees."

We're sure they'll work it out and your Halo 3 multiplayer sessions will never know the difference.

$90 million sought from Microsoft [Bloomberg/Seattle PI]

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<![CDATA[Court Denies Gibson's Guitar Hero Lawsuit]]> Guitar manufacturer Gibson's grand plans to sue Activision over its Guitar Hero series have been dashed, as the District Court for the Central District of California has ruled against Gibson, denying its patent infringement claims.

Gibson filed the suit against Activision last march, albeit "reluctantly," claiming that Guitar Hero infringed on a nine year old patent for technology to simulate a musical performance.

"Nope!" says the court.

"Guitar Hero controllers are toys that represent other items," reads the court ruling. "Those represented items-the controller's referents-are what any reasonable person in our society would recognize as "an actual musical instrument."

Gibson also has an outstanding lawsuit with Electronic Arts, MTV Games and Harmonix over Rock Band's use of guitar controllers. Expect that one to be ruled against too.

Gibson loses Guitar Hero patent lawsuit, gets booed off stage [Engadget]

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<![CDATA[Harmonix Sues Konami Over Rock Revolution]]> Rock Band developer Harmonix is turning the legal tables on Konami, slapping the publisher-developer with a lawsuit of its own. No, not for pain and suffering caused by Rock Revolution, but for patent infringement.

Why does this sound eerily familiar? You may recall that Konami, who also developed the rhythm game Guitar Freaks for Japan, hit Harmonix with a suit last summer. That suit claimed that Rock Band violates a pair of patents Konami obtained in 2002 and 2003, which relate to "simulated musical instruments, a music-game system and a musical-rhythm matching game."

Now it's Harmonix's turn to sue.

The Boston based developer, which is owned by MTV Games, claims Konami is violating its own patent for game controllers that simulate musical instruments, one that Harmonix claims is an improvement of earlier video game controllers that simulate musical instruments. The Harmonix patent actually cites Konami's other rhythm game Beatmania as an example of a control system that has been improved upon.

Harmonix's suit, much like Konami's, is seeking cash and a motion to stop the Rock Revolution publisher from selling its plastic instruments. We'd think the game buying public has done a pretty respectable job of doing the latter due to lack of interest.

Viacom's Harmonix Sues Konami Over ‘Rock Revolution' [Bloomberg]

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<![CDATA[Who's Konami Suing Now?]]> Pentavision! Who's that? Why, the Korean developer of the DJ Max and DJ Max Portable series of rhythm games, of course! At issue was that Pentavision made a music game without Konami's permission.

To be fair, Konami's actually claiming patent infringement and intellectual property rights infringement, or as close to it as we can gather. Konami of Korea issued a statement about the lawsuit earlier today, so we're trusting Google Translate to guide us through Korean legalese.

Konami looks to have filed the lawsuit in the Seoul Central District Court yesterday, seeking damages and to prohibit Pentavision from selling offending products.

Konami filed suit against Harmonix, MTV and Viacom earlier this year over patents it alleges were violated by Rock Band.

We've contacted Konami for comment and will update when we hear more.

음악 시뮬레이션 게임 "DJ MAX 시리즈"에 대한 특허침해소송 제기의 건 [Konami Korea - thanks, Riyu!]

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<![CDATA[Midway Cleared Of Psi-Ops Copyright Infringement]]> A federal judge has ruled in favor of Midway in a copyright infringement case over its 2004 game Psi-Ops. A California screenwriter sued the publisher last year, claiming Midway swiped elements from his movie script, also titled Psi-Ops.

William L. Crawford II filed suit against Midway in March of 2007, pointing out similarities between the the 1998 screenplay for Psi-Ops and the video game Psi-Ops: The Mindgate Conspiracy, both of which feature similar plot devices, characters and naming. Both projects featured similarly named Psi-Agents with telekinetic or pyrokinetic powers and a terrorist organization comprised of psionic soldiers.

Judge Florence-Marie Cooper didn't find the similarities "protectable" under the Copyright Act.

Cooper granted summary judgment on all claims for Midway Games, represented in the case by Drinker Biddle & Reath LLP, agreeing with the Chicago-based publisher that “few, if any, similarities between the works at issue that are protectable."

Crawford claimed in his original suit against Midway that the publisher may have had access to details of his Psi-Ops screenplay he'd written via several web sites built to support the project. He also then claimed he'd showcased his works at E3 2001 and been given media attention in various sci-fi publications.

Judge Cooper rule there was “minimal evidence supporting a reasonable possibility” that Midway had access to Crawford's works. She noted “No reasonable juror can find that Plaintiffs’ [screenplay and web sites] and Defendants’ video game are substantially similar in the expression of their ideas.”

Crawford was seeking $1.5 million in compensation for his copyright infringement claim.

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<![CDATA[Strip Club Loses Its Suit ... Against Rockstar]]> Ah, the Pig Pen, East Los Santos. I've blown many wads of cash there in my time, and left it about as fulfilled as I have any other strip club in real life. Speaking of unfulfillment and real life strip clubs, the PlayPen of East Los Angeles — notice any similiarities? — lost a federal appeal in a lawsuit against Rockstar Games, alleging the game infringed on its trademarks.

Even though Rockstar conceded that its Pig Pen was somewhat modeled on the real life PlayPen — I assume both are located in strip malls in really bad parts of town — the U.S. 9th Circuit Court of Appeals said there's not enough for an infringement claim. And it did so in an opinion that took every opportunity at snark. How dare they! Are they jurists or bloggers? Writes Judge Diarmuid F. O'Scannlain (note to self: New Warcraft name):

"Both 'San Andreas' and the PlayPen offer a form of lowbrow entertainment; besides the general similarity, they have nothing in common. The 'San Andreas' game is not complementary to the PlayPen; video games and strip clubs do not go together like a horse and carriage or, perish the thought, love and marriage."

I hope he was popping his suspenders with a spinning bowtie when he wrote that.

PlayPen lawyer-mans Ken RosenbergRobert F. Helfing wasn't happy with the outcome.

"This ruling now permits people who create artistic works that purport to convey the look and feel of a particular geographic location to use any trademark that appears on any building in that location in the name of art. When you use a trademark or logo of an existing business, as was done in our case, you create the impression that our client is somehow associated with the game, which is not the case."

Helfing hasn't discussed the possibility of an appeal, but that would naturally be to the U.S. Supreme Court. I'd love it if they granted cert for this. Jack Thompson would shit an exact replica of himself.

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<![CDATA[THQ Sues Activision Over Baja Box Art Rip]]> Seems that someone at THQ — most likely someone in the legal department — thinks the box art for Activision's upcoming off-road racer SCORE International Baja 1000: The Official Game looks a teensy bit too much like the box art for Baja: Edge of Control. This may be due to that someone at THQ having properly functioning eyeballs. The two multi-platform racers are planned for release just a month apart — THQ's Baja effort shipped end of September — leading THQ to file suit.

It claims the offending box art for Activision's SCORE International Baja 1000: The Official Game is "likely to confuse, cause mistake or deceive the public as to the existence of an affiliation, connection, or association between THQ and Activision, when in fact there is none."

THQ also notes in the lawsuit that it has spent "in excess of $1 million on advertising, marketing, and promotion for the THQ game" and that it publicly released the cover art for Baja: Edge of Control "more than four months ago."

The publisher says that it didn't blindside Activision with its lawsuit, having contacted Activision on October 8th — two days after it discovered the similarities — about its "concerns" about the packaging. The lawsuit specifies that THQ has attempted multiple times to "convince Activision to stop production of its packaging art voluntarily" something it says that Activision has refused to do.

THQ doesn't put a price tag on the suit, instead seeking injunctive relief to prevent Activision from releasing the packaging as-is. Failing that, damages, profits from the sale of Activision's game and legal fees will do them just fine.

A copy of the suit can be read at Patent Arcade.

New Case: THQ v. Activision Blizzard [Patent Arcade]

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<![CDATA[EA Sued Over Copyright Infringement In Ten NCAA Games]]> Gerald Willis, who composed the University of Nevada Las Vegas fight song "Win With the Rebels," has filed suit against Electronics Arts over the company's commercial use of his song in ten video games. The NCAA licensed titles under contention include NCAA Football, NCAA Basketball, NCAA March Madness and NCAA Baseball series, spanning from 2005 to 2008.

Willis is seeking "up to $150,000" for each copyright infringement. That could mean up to $1.5 million if it applies to each release, a couple trillion if applied to each infringing copy sold. The composer's lawyer tells the Las Vegas Review-Journal that the university has "a limited license" to the song. Wonder if someone at UNLV forgot to tell EA that...

Composer sues game maker Electronic Arts over use of UNLV fight song [Las Vegas Review-Journal]

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<![CDATA[Lawsuit: Retired NFLers Cheated by EA, Union]]> A suit brought by retired NFL players not only alleges they're due money for Electronic Arts' use of their likenesses and career stats, but also that their own union brokered a below-market deal as a favor to EA, helping it secure exclusive NFL rights for its Madden franchise.

Via Ars Technica and GamePolitics, former Buffalo Bills defensive back Jeff Nixon has written an open letter to John Madden (also a Hall of Famer and former Oakland Raiders coach) which details some documents discovered in this suit. Nixon alleges the plaintiffs have communication between the a union official and an EA developer cc'd to another union official, in which everyone agreed to scramble retired players' likenesses to keep from paying them, beginning with Madden NFL 2002. The players may not be identifiable visually, or by number, but they still have the same height, weight, years of service and performance characteristics, making them wink-and-nod identifiable.

The reason for the scrambling? Take-Two apparently was going after retired players' image permissions for a game that never got off the ground. Nixon alleges EA and the NFLPA's marketing unit, NFL Players Inc., rushed to lock down a contract that secured the most valuable retired players' rights for below-market payments, and says he has an email (jump) admitting this.

Writes Nixon:

When a substantial competitor to EA [Take-Two] began to emerge for use of retired players, EA and Defendants rushed to enter into a contract locking up the most valuable retired players’ rights in exchange for payments that were admittedly below market. [NFL Players Inc]’s Senior Vice-President, Clay Walker, admitted as much in the following email:

“Take Two [the EA competitor] went after retired players to create an “NFL” style video game after we gave the exclusive to EA. I was able to forge this deal with [the Pro Football Hall of Fame] that provides them with $400K per year (which is significantly below market rate) in exchange for the HOF player rights. EA owes me a huge favor because that threat was enough to persuade Take Two to back off its plans, leaving EA as the only professional football videogame manufacturer out there.”

Ars Technica also pointed out another email dug up by the suit:

An e-mail sent November 1, 2007, is equally plain in its language. Andrew Feffer, executive vice president and chief operating officer of the NFLPA wrote to EA Sports' representative Paul Cairns that "Clay and Joe's negotiation of these discounted terms was a significant contribution to EA as you more than likely would have paid in excess of $1 million for these rights without their involvement and assistance." In other words, you saved a cool million because you had people negotiating who weren't hoping to strike the best deal for the players.

As for the agreement to scramble players' likenesses, Nixon's letter also says this is from LaShun Lawson, the VP of multimedia for NFL Players, Inc., to EA producer Jeremy Strauser, cc'd to Doug Allen, then president of NFL Players Inc.

“For all retired players that are not listed... their identity must be altered so that it cannot be recognized. Regarding paragraph 2 of the License Agreement between Electronic Arts and Players Inc, a player’s identity is defined as his name, likeness (including without limitation, number), picture, photograph, voice, facsimile signature and/or biographical information. Hence, any and all players not listed... cannot be represented in Madden 2002 with the number that player actually wore, and must be scrambled."

The lawsuit goes to trial next month in San Francisco.

Lawsuit: NFL Conspired with EA to Cheat Players [Ars Technica]
EA Hid Identities of Retired Players in Madden, Lawsuit Document Says [GamePolitics]
An Open Letter to John Madden [NFL Retired Players United, Jeff Nixon]

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<![CDATA[The Business of 'Avatar Rights']]> The rights of 'avatars' — more to the point, the people who control them and their virtual assets — is an interesting and murky part of legal issues, EULAs, and player-company relations. Court cases have been tried over 'illegal' seizing of assets, and with the amount of time (and money) that people pour into their online characters and assets, we can expect to see more and more real-world legal problems related to virtual issues. But are companies on the ball?:

The essential issue recognized by the "Avatar Rights" movement is that players ascribe substantial value to their game characters and virtual assets. The willful denial of this fact, in some sense, has helped enable the growth of gold farming and criminals who target online games.

Because developers don't consider the value that players put in their virtual "stuff", customer service is often not responsive to player complaints about lost items. Also, the game systems are not built to easily log, track, remove, and restore these items in case of loss or theft.

In some sense this is ironic, the same game companies that argue vigorously that the virtual items have no value, at the same time are extraordinarily reluctant to restore players characters or virtual items after alleged theft. The argument is typically made that the players are abusing the system by allowing their items to be stolen (or, actually, selling them) and then making a complaint to the game operator.

If the items have no value, then restore them.

Short, but interesting, musing — with references — on the 'avatar problem.'

The Quixotic Quest for Avatar Rights [PlayNoEvil]

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<![CDATA[UK Game-Sharers Being Sued; Peter Moore Says Bad Idea]]> In the United Kingdom, Atari, Codemasters and three other game companies are going to court to demand GBP300 from 25,000 file-sharers, reports The Times of London. Apparently, file-sharing got really obnoxious recently — 691,000 downloads of Operation Flashpoint by Codemasters in one week alone. So the five have asked the court to demand internet service providers turn over information on all 25,000 accused of breaking the law. Those users will get notices inviting them to pay up or face prosecution, and the first 500 to ignore it get sued.

Asked about it in an interview with Eurogamer, EA Sports boss Peter Moore called that practice a bad idea. "I'm not a huge fan of trying to punish your consumer," he said. "Albeit these people have clearly stolen intellectual property, I think there are better ways of resolving this within our power as developers and publishers."

Moore went on:

"Yes, we've got to find solutions," Moore continued. "We absolutely should crack down on piracy. People put a lot of blood, sweat and tears into their content and deserve to get paid for it. It's absolutely wrong, it is stealing.

"But at the same time I think there are better solutions than chasing people for money. I'm not sure what they are, other than to build game experiences that make it more difficult for there to be any value in pirating games.

"If we learned anything from the music business, they just don't win any friends by suing their consumers. Speaking personally, I think our industry does not want to fall foul of what happened with music."

I'm sure it's a lot easier for Moore to say that when his bottom line is waaaaaaay better than Atari's, or these other five. Still, it stands to reason EA titles are swapped around too, although to what extent — and what EA's threshold of pain is — I don't know. Yet Moore says he's not aware of any EA plans to join these five and "chase down consumers."

Moore Warns Against Suing File-Sharers [Eurogamer]
Computer Games Industry Threat to Downloaders: "Pay Up or We'll Sue" [The Times of London via Eurogamer]

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<![CDATA[Nintendo Loses in Bid to Reduce Patent Infringe Penalty]]> You may recall that earlier in May, Nintendo was pinched to the tune of $21 million in a patent infringement suit brought by Texas-based Anascape. Upon further review, the play stands — a U.S. District Court judge denied Ninty's pretty-please to cut that $21 mil to a less lottoriffic number. So unless they want to take this up the ladder to a U.S. federal appeals court, they'll be cutting a check for that number.

Anascape sued back in 2006 and went for the kitchen sink, claiming Nintendo and Microsoft both infringed on controller designs they had patented. Microsoft settled with Anascape. The original suit against Nintendo covered everything from the Gamecube forward — the Wavebird and the Classic, plus the Wiimote and Nunchuk. The case decided in May found infringements only on the former two not the motion-sensing controls in the Wii. Still, $21 million is not pocket change.

Nintendo's Appeal on Reduced $21M Verdict Denied [QJ.net]

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<![CDATA[Take-Two's Zelnick Goes All-Out In Annual Meeting]]> GTA IV is complete and in production; the trucks are set to begin shipments to retail. This is just one item of positive news that Take-Two's executives touted at their annual shareholder meeting.

On the table? In addition to a reinstatement of the board, that controversial compensation package to executives, through which Strauss Zelnick's ZelnickMedia stood to see their monthly pay go up from $62,500 to $208,333. The compensation package also includes a bumped up annual bonus, from $750,000 to $2,500,000 per year, and 600,000 shares of common stock that the management also gets as part of the same compensation boost. Only investors who bought shares before February 19th were able to submit ballots on these issues.

Even chairman Strauss Zelnick acknowledged, though, that what most of the stockholders really wanted to hear about was EA. And he held little back in a spirited attempt to convince shareholders that, at least for the moment, they were better off not selling.

Hit the jump for Kotaku's full coverage of what went down in the meeting.

Take -Two opened with a video presentation that chairman Strauss Zelnick said would demonstrate the breadth and quality of Take Two's products, the depth of its portfolio and the strength of its staff. Given that Take-Two aims to convince its shareholders it can maintain a share price over the $26 they've been offered by EA, it's not surprising that he'd open with a focus on the positives. We couldn't see exactly what the presentation contained, listening in on an audio-only feed — all we could hear was some amped-up guitar music, the kind you'd expect to hear overlaying a montage.

Following the video, CEO Ben Feder continued on the upbeat note. "We've made significant progress over the past year on all fronts," he began, praising the progress of the company's turnaround initiatives announced this time last year. Federer said the reorganization in place, including a $25 million cost reduction initiative, is going well, and reminded attendees that the company's now backed with a credit facility to ensure stability.

"We're very pleased that we've broadened our product lineup across all genres, platforms and demographics," Feder said, and expressed confidence at the company's "robust" lineup for the coming years. On GTA's upcoming launch, Feder confirmed the game is complete and in production. "GTA... is our most profitable and biggest-selling franchise. Retail preorders for GTA IV are ahead of our initial expectations, which suggests that the launch of GTA could be defining for our company and for the entertainment industry."

Federer also promised releases beyond GTA held strong potential. He mentioned the upcoming Midnight Club, which as a franchise has sold 12 million units to date, Sid Meier's Civilizations Revolution, the 8 million-selling franchise's console debut, and the follow-up to BioShock slated to release in 2009.

In addition to praising the performance of Carnival Games, Feder called Take-Two's stable of sports titles one of its highest achievements, and expects, based on all these strengths, for Take-Two to turn a profit this year, rounding out the positive tone by expressing confidence in the Asian expansion initiative announced earlier this week.

Zelnick reclaimed the floor, reiterating what he's been saying all along regarding EA's offer: "The Board and management of Take-Two strongly believe.. that EA's offer is still at the wrong place, and still at the wrong time."

He cited "one of the strongest porfolios of intellectual properties in the business," Take-Two's suite of 17 development houses including Rockstar, 2k, 2k Sports and 2k Play, and a staff of 1400 developers altogether, and said Take-Two has 30 titles with sales of 1 million units or better — and, claimed the highest-rated titles of all third-party publishers including EA.

He called EA's bid "highly opportunistic," stating, "We believe EA's decision to pursue a hostile process instead of a cooperative one is strong evidence they're trying to lock in value at the expense of [stockholders]."

Added Zelnick, "The offer also fails to take note of... positive results we're seeing from turnaround initiatives that are well underway. EA's timing was specifically designed to capture the benefit of those initiatives before they became apparent and reflected in our stock price. We've become a much more efficient company. We believe we're a much better-managed company. We're a rational company; we make rational decisions. We have a lot of hard-working, dedicated, talented people."

Specifically, he focused on 2K Sports, saying that head-to-head, 2k beats EA on every metric for sports titles. "EA's offer doesn't remotely compensate stockholders for the value of the sports business to EA," Zelnick stressed.

Zelnick's voice took on a tone of urgency, and the audio picked up what sounded like him striking the table to punctuate his speech. "Take-Two is worth more than $26 per share — and I'm being moderate because I have lawyers in here. The board believes it's worth more than $26 a share. I urge stockholders not to tender shares at this price."

However, he made it clear the door is open to negotiations in the future: "That said, I want to emphasize — this is crucial. The board of Take-Two, the management of Take-Two is one hundred percent, absolutely committed to doing the right thing by stockholders and to create value at this company. The results... are only going to get better."

He said the board would consider all its options — including remaining independent — but that the company is prepared to begin formal discussions with interested parties on April 30th. He again said that Take-Two has received "numerous indications of interest from third parties," and that they continue to receive inquiries — though when asked, Zelnick would not disclose whether he'd entered into any kind of confidentiality agreement that would protect such discussions.

Finally, Zelnick noted that both Take-Two and EA are cooperating with the FTC on its investigation of possible antitrust violations surrounding the proposed transactions, and he refused to speculate on what areas in specific the FTC might be scrutinizing the most closely.

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<![CDATA[Shareholder Sues Take-Two Over EA Bid]]> t2.jpgTake-Two is apparently the object of a class-action suit by one of its alleged shareholders who claims, basically, that the circumstances surrounding Take-Two's refusal to sell to Electronic Arts are so fiscally irresponsible it's criminal.

Yesterday, we discussed the strategies Take-Two undertook to try and stall or thwart EA's bid. They've been refusing to talk with EA or explore offers, and they're doing their best to entrench the current Board of Directors with that compensation boost that features stock that takes three years to fully vest. They also implemented that stockholder's rights plan — the so-called "poison pill." As it turns out, someone who is allegedly one of Take-Two's stockholders is none too happy with these tactics — and he's ticked enough that he's taking the company to court.

Take-Two disclosed this morning in a filing to the SEC that the alleged stockholder, one Michael Maulano, filed a class action complaint on April 11th against Take-Two and it's eight-member directorial board in the Supreme Court of the State of New York, where the company's headquartered. Maulano calls Take-Two's tactics a breach of fiduciary duty, and the suit also alleges that Take-Two's responses to EA's offer contained "misleading and incomplete" information.

Maulano wants "declaratory relief, preliminary and permanent injunctive relief, damages, and reasonable attorneys' fees and litigation expenses," and it is unclear how many other shareholders, if any, are part of Maulano's class action suit. Take-Two was not immediately available for comment on the suit, but said in its disclosure: "The Company and its Board of Directors believe these claims lack merit, and intend vigorously to defend against them."

This is a different lawsuit from one filed last month by Prickett, Jones & Elliott on behalf of Take-Two shareholder Patrick Solomon. Solomon aims to sue Take-Two management over the controversial compensation boost.

Bonus info: Why take Take-Two to court rather than simply make a proposal for a vote in the annual meeting? As we learned yesterday, only shareholders who bought Take-Two stock before the cut-off deadline can submit proposals or vote at the meeting — and those that bought stock after EA's bid aren't eligible to vote. It's unclear how long Maulano has been a shareholder, but even if he is one of those able to vote, it may be that there wouldn't be enough people on his side of things at tonight's meeting.

Later this evening — 6:00 PM Eastern Time, to be exact — Take-Two will hold its annual meeting for investors. When Kotaku spoke to some analysts yesterday to help lay out exactly what's been going on regarding EA's aggressive bid to buy the company, and we learned that today might turn out be a very big day for progress in that arena.

EA also revealed this morning that the Federal Trade Commission has filed a second request for information on the proposed transaction, so that it can investigate possible anti-competition issues — though the FTC has drawn no conclusions yet, and requires more time to investigate.

We'll follow this story as it develops throughout the day and keep you posted.

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<![CDATA[NCsoft Shuts Down Illegal Servers]]> lineageii.jpg NCsoft is stepping up the battle against IP theft, in this case targeting illegal servers in eastern Europe (concentrating on Greece and Russia). Last year, they successfully brought a suit against a Greek company who was profiting from the use of illegal Lineage II servers; they're continuing the global fight. Full release after the jump.

BRIGHTON, England (10th April 2008) - NCsoft®, the world-leading, publisher of massively multiplayer online games such as Guild Wars®, Lineage® II and City of Heroes®, today announced that it was stepping up its fight against the growing menace of intellectual property theft. This action comes as a direct response to the rise of illegal online game servers throughout Eastern Europe, particularly in Greece and Russia where NCsoft's fantasy-based online role playing game, Lineage II, is extremely popular.

The fraudulent servers in question are being used by players playing at home and in internet cafes, but such unauthorised servers often feature - or require users to download - illegally modified and potentially harmful game data, thereby changing the intended online experience.

NCsoft's European office has identified several prominent illegal servers across Europe and is in the process of taking action against individuals and corporations deemed to be in breach of international copyright laws. In a lawsuit that was commenced last year in Greece, NCsoft successfully obtained a court order against Internet Cafe business, 'e-GLOBAL' following which four of its cafes were raided and illegal software was seized. This led to the shutting down of illegal servers on which pirate copies of Lineage II software was loaded. Georgios Katostaris - Chairman of the Board and Managing Director, Constantinos Zygouras - Vice-Chairman of the Board and Managing Director, Athanassios Dobros - Deputy Managing Director and Dimitrios Koutsoukos - Administrator of the company under the name 'INTERNET DYNAMICS LLC' have all been made personal defendants to the proceedings that are continuing in the Greek Courts in which NCsoft is seeking damages as well as criminal remedies.

"Illegal game servers, such as those operating from e-GLOBAL, have a hugely negative impact on both NCsoft Europe and its customers," commented Max Brown, NCsoft Europe's Sales & Operations Director. "They seriously affect the player's experience of our products and rob the company of potential revenue that is used to further enhance the player experience on official servers. NCsoft's loss in revenue from e-GLOBAL's operation is estimated in excess of six million Euros. We are defiant in our resolve to stamp out theft of NCsoft's intellectual properties and are prepared to take the strongest measures to do so."

NCsoft has a proven track record in combating illegal servers, having worked with the FBI in November 2006 to shut down a substantial unofficial Lineage II server run by US-based website, L2Extreme.com. Following multiple raids across cities throughout the US, L2Extreme's fraudulent servers - which claimed to support 50,000 active users - were taken offline, as was the L2Extreme.com website.

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<![CDATA[Gibson Adds To Activision's Legal Troubles]]> It would appear that Harmonix isn't the only Activision partner who has is in a legal tiff with the publisher.

Guitar manufacturer Gibson, whose guitar body styles are licensed for Guitar Hero controllers, says Activision is infringing on a nine year old patent for technology to simulate a musical performance. Reuters reports that Activision has in turn filed suit in federal court to render that patent claim invalid.

According to the report, Gibson sent Activision a letter in January requesting that the Guitar Hero pub apply for a license or stop selling the game. Activision essentially responded, "We thought since you didn't say anything about it, we were cool." Then it went in for a high-five/extended secret handshake thing. It was awkward.

Activision's "Guitar Hero" violates patent: Gibson [Reuters]

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