Activision Sued Over DJ Hero (UPDATED)

DJ hero lawsuitActivision Blizzard walked out of court victorious in early March after quashing an ill founded patent lawsuit that challenged its flagship Guitar Hero franchise. Now, barely a month later, the Santa Monica based game publisher is walking back in again to face yet another suit regarding its lucrative series.  This time it’s DJ Hero, a hotly anticipated, in-development Guitar Hero spin off, in the line of fire.

The suit, filed April 14th by Scratch DJ LLC (“S.DJ”), a joint venture owned by Genius Products and DJ equipment maker Numark, alleges Activision illegally interfered with the development of S.DJ’s competing game, and did it intentionally, violating several tort laws along the way,  in order to make sure DJ Hero has the advantage of being the first to market. 

S.DJ’s game, Scratch: The Ultimate DJ, has been in development since at least early 2008.  Artists ranging from the Gorillaz to Run DMC to  the Black Eyed Peas have been linked to it and the buzz factor is pretty high.   

The game was tentatively expected to be released for the Xbox 360 and PS3 in September.

That date may now be in doubt, however, and according to S.DJ, that’s because of Activision’s actions. 

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Applevine: Run on Flash and New Patent Suit

Apple appears to have bought up large amounts of flash memory fueling a new round of iPhone 3.0 rumors.  The company was also hit with a new patent infringement lawsuit. In detail…

Memory orders are often monitored as potential indicators of consumer electronics production changes.  It’s not an exact science as companies routinely adjust inventory on parts to hedge against price fluctuations, or to satisfy demand,  still spikes in volume can be significant.

Apple has a contract to buy its flash memory chips from Samsung, Toshiba, Hynix, and Micron through 2010.

Think Equity Partners reported in February that Apple had bought up much of Samsung’s supply of flash memory. Digitimes reported today that Apple’s recently snagged another 100m 8Gb NAND Flash memory, mostly from Samsung as well.

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Legal Briefs: Discovery hits Amazon Kindle with Infringement Suit.

The teeth associated with Discovery Communications (“Discovery”) are usually those flashed on Animal Planet, during the company’s “Shark Week” TV programming on the Discovery Channel, or when host Bear Grylls eats something disgusting, but it turns out the company’s legal department has plenty of bite of its own.

Today, Discovery filed a suit against Amazon in Delaware US District Court claiming Amazon’s popular Kindle e-book platform willfully infringes on a patent granted Discovery on Nov. 20th, 2007.

Discovery is seeking damages, repayment of legal fees, and in lieu of an injunction blocking Kindle sales, an ongoing royalty.  Discovery has also requested “treble damages,” the legal term for punitive damages up to triple the compensatory finding if Amazon is found in the wrong.

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Jumping to Conclusions? Report Leads to Blockbuster Sell Off

spread-sell-danger.jpgTuesday was a bad day for Blockbuster shareholders.   Open to close, the company’s stock crashed 77%, dropping from 96 cents to 22 cents a share.   The massive sell-off was triggered after reports circulated saying the company hired Chicago law firm Kirkland & Ellis to explore a possible bankruptcy filing. 

In rebuttal, Blockbuster told a different tale about its intentions for the retainer.  The company says it hired counsel to help with restructuring and not to prepare for court protection.    

Did the reports get it wrong? Or did traders rush to action too fast, misinterpreting the news along the way?

Karen Raskopf, Blockbuster’s spokeswoman, said the company hired Kirkland & Ellis “for assistance with our ongoing finance and capital-raising initiative."  Regarding Blockbuster’s plans, she said, “We do not intend to file for bankruptcy."

Blockbuster’s “ongoing financing” issues aren’t anything new.  Click to Read More

Activision Beats Gibson in Court: Patent doesn’t Apply to Guitar Hero

court judgmentThe Gibson Les Paul is an icon. Bob Marley was entombed in a mausoleum with his. Duane Allman used one.  Slash, the Edge, Mick Jones, Jimmy Page, Keith Richards, Neil Young, Paul McCartney – some of the biggest names in Rock have played it. It’s no surprise, given that, that Activision licensed the guitar’s likeness (and Gibson’s brand) to give game players an axe to shred for the Guitar Hero game franchise.   What was a surprise was that Gibson turned on its partner of three years with patent infringement claim last year

Showing teeth that seemed to come out of nowhere, Gibson said Activision’s Guitar Hero franchise, and eventually,  all things guitar-gaming (Gibson also sued EA, MTV Networks, Harmonix and major retailers selling Guitar Hero or Rock Band games), infringed on its prior invention.  

From the start, Gibson’s claims looked weak

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Midway Bankruptcy: Incentive Plans and Sales Options Up Close

midwayMonday, several stories seizing on a blog post from Gawker Media’s Kotaku suggested struggling Midway Games might be in the process of selling off its Mortal Kombat game franchise.  Several of the articles (on the basis of part of the story, as well) also went so far as to attack the company for pursuing a key-personnel incentive plan at the same time the bankrupt company appears to be cutting back payouts to laid off staff.   

The stories’ paint a grim picture of the company’s practices and it’s easy to jump in the chorus of castigation.  Unfortunately, headlines sometimes oversell their news story and news stories sometimes under emphasize all of the facts.  Here, however questionable some of what’s happening at Midway may (or may not ) be, review of the company’s bankruptcy filings, which are embedded or linked to below, shows the situation is more complicated and far less definitive than many of the reports suggested.

First and most importantly, contrary to suggestion, the Incentive Plan (which provides for $3,775,000 to be set aside to pay incentives to up to 29 employees on the completion of three milestones) is not active.  While endorsed by the company, it has not been approved and set in place.  Money hasn’t been “set aside.” Midway provided the Bankruptcy Court with a copy of the plan as a proposal on February 23rd (see embedded file below) and requested creditors voice their objections (if any) by March 3rd.  A hearing was tentatively scheduled for March 10th.    At this point, there’s no guarantee creditors will agree to the plan as written (or at all), or that the Bankruptcy Court will approve its implementation.    

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Chernin Leaving News Corp: Details and Departure Memos

chernin news corpAs the President, COO and number two executive at News Corp for the last twelve years, Peter Chernin has long been counted among the most powerful men in the media industry but his position has always had a footnote.  Unlike other executives in similar roles, outsiders have rarely considered Chernin a likely candidate to ascend to the company’s CEO throne.  The honor of one day leading News Corp, though ultimately a board decision, has generally been assumed reserved for one of Rupert Murdoch’s sons.   This lack of upward mobility has fueled consistent rumors about Chernin’s eventual departure. Today, they’re now fact.

Reports are confirmed that when Chernin’s five year old employment contract expires June 30th, it won’t be renewed.  Both Chernin and Murdoch have issued memos to staff making the announcement.  (The letters are reprinted below in their entirety as is the company’s description of his employment agreement).

Chernin joined News Corp in 1989.  After heading up Fox Broadcasting and Twentieth Century Fox, he became President and COO in 1996.

After twenty years at the company, Chernin characterized his decision as a difficult one saying ultimately that he’s “ready for new entrepreneurial challenges.”

Murdoch in a long memo to staff (see below) acknowledged Chernin’s service and hinted a management restructuring will likely follow to streamline reporting between the company’s LA based businesses (Fox) and the rest of its operations.  Calling Chernin a “close colleague and an ally,” and deeming his contributions “immeasurable,”  Murdoch said “now is also an ideal opportunity to streamline and enhance many of the corporate and administrative functions of the business.”

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