3Dfx Cries Foul, Sues Sega

3Dfx complaint alleges Sega breached contract, misappropriated trade secrets.

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3Dfx Interactive has filed a multimillion-dollar lawsuit against Sega Enterprises Ltd., Sega of America, and NEC Corporation, the company said Tuesday in a statement.

The complaint alleges that Sega breached its contract with 3Dfx Interactive to develop the graphics chipset that would have been used in Sega's new home game console.

This action follows a squabble the two companies waged earlier this summer when 3Dfx issued a statement confirming reports that its chipset had been passed over for the NEC unit.

Since March 1997, 3Dfx had been developing a chipset based on its Voodoo Graphics technology for use in Sega's new game console (Sega had invested nearly US$2 million for the chipset's development). In July, after 3Dfx confirmed that its chipset was not going to be used, the company issued a July 23 statement saying it planned to explore all options, including taking legal action against Sega.

Greg Ballard, president and CEO of 3Dfx Interactive, said in the statement that "Sega terminated our contract without justification. We lived up to all of our commitments, yet they terminated the agreement. It's a clear breach of contract."

The suit is seeking damages for breach of contract, interference with contract, threatened misappropriation of trade secrets and unfair competition. It was filed last Friday, Aug. 29, in California Superior Court in Santa Clara County.

Tuesday morning, Sega of America told GameSpot News it had yet to see any legal documents and therefore had no comment on the 3Dfx complaint.

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