WWE's latest THQ suit detailed
Wrestling company claims publisher has been illegally sublicensing out rights it doesn't have for the last five years, wants option to terminate long-term contract.
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Last week, publisher THQ announced that it was being sued again by World Wrestling Entertainment (WWE). This is the second time the WWE has sued the publisher, with the first case still working its way through the courts.
THQ said the latest dispute was over alleged improper sales of WWE games in Japan and other Asian countries, quickly adding its contention that the suit is without merit and the publisher will fight it. However, other details were sparse. GameSpot obtained a copy of the suit today to find out exactly what the wrestling federation's beef with its game-publishing tag-team partner entails.
WWE is claiming that THQ sublicensed out the rights to games based on the wrestling organization for at least the last five years when it didn't have the rights to do so. For one thing, WWE says that THQ never had any kind of a license agreement with the wrestling company in the first place; its deals were made with THQ-Jakks Pacific, a separate joint venture half owned by the publisher and half owned by WWE's toy license-holder Jakks Pacific.
Furthermore, WWE says that the licensing agreement it does have with THQ-Jakks Pacific specifically forbids sublicensing to any company that is not wholly owned by the joint venture without prior written consent from WWE. WWE said that it never received a request for nor granted any such written consent.
As for whom THQ was licensing the rights to, WWE claims it was SmackDown! franchise developer Yuke's (of which THQ is only a part owner), which handles the distribution of WWE games in Japan and other Asian countries. The wrestling organization also claims that THQ was collecting royalties from Yuke's that should have gone straight to the WWE instead.
As for why the WWE hasn't brought the issue to court before now, the company claims that THQ concealed the sublicensing agreements from it. It says that when THQ submitted package approval request forms in 2004 for a game to be sold in Japan, the publisher listed Yuke's as "THQ's regional distributor," and not a sublicensee.
THQ-Jakks Pacific has held the WWE game license since June of 1998, according to the suit, and the agreement currently extends throughout 2009. THQ-Jakks also holds the option to extend that by another five years "provided that certain conditions are met." Those conditions are not specified in the lawsuit.
The WWE is asking for a declaration that it is entitled to terminate its licensing agreement with THQ-Jakks Pacific, for THQ to give up whatever money it made from the sublicensing agreement, and for monetary damages with interest.
When WWE first brought the charges to THQ's attention earlier this year, the publisher denied them. "The WWE had been aware and had consented to the manner of distribution in Japan and the payment of royalties with respect to such sales and, in addition, had separately released the joint venture from any claims with respect to such matter as a result of a settlement of a royalty audit of the THQ/JAKKS joint venture," THQ said, later adding, "We believe we have several bases for defending any claim of breach of the video game license agreement resulting from the manner of distribution of WWE-licensed products in Japan and other Asian territories."