http://www.newsday.com/business/loca...,2605413.story
November 13, 2002
Acclaim Entertainment Inc., already pummeled by an unexpectedly large fourth-quarter loss and a drop in its stock price, took a body slam last week from World Wrestling Entertainment Inc., which filed a lawsuit charging the Glen Cove game maker with copyright infringement and breach of contract.
In a suit that contests "tens of millions of dollars" in sales by Acclaim, the wrestling giant said Acclaim violated terms of an agreement reached in 1999 that limited its access to key World Wrestling Federation-related trademarks. (The company changed its name in May.)
The suit, filed last week in U.S. District Court in Central Islip, seeks a permanent injunction blocking Acclaim's alleged unauthorized distribution of the games Attitude, Warzone, In Your House and Wrestlemania, and use of certain WWF trademarks. It also seeks unspecified damages and fees.
Acclaim, which said it hadn't yet been served with the suit, said it plans a vigorous defense.
"This lawsuit is absolutely frivolous," said Edward Slezak, vice president and corporate counsel. "We are vehemently defending ourselves against this suit."
Indeed, it's not clear from the suit upon what sales data the Stamford, Conn.- based wrestling entertainment company is basing its claims. Slezak said the only thing he could imagine is that outdated titles that Acclaim hasn't produced in years continue to show up in sales research because some retailers and distributors still have the outdated inventory.
Either way, he said, such sales provide no revenue to Acclaim and are in minute quantities. "We don't manufacture or sell any more of that product," Slezak said. "However, the products are still sitting out on shelves. ... We have lived within the provisions of the contract."
According to the suit, Acclaim has been selling games based on World Wrestling Entertainment trademarks for more than two years despite termination of an agreement between the two in August 1999. Since then, the suit says, "Acclaim has distributed WWE copyrighted games significantly in excess of the terms" of two limited distribution agreements. The "unlawful conduct has resulted in the sales of tens of millions of dollars of WWE-copyrighted video games, the profits of which Acclaim has unfairly and unlawfully pocketed without a penny of compensation paid to WWE," according to the suit.
In defending its trademark, World Wrestling Entertainment said it "strives to make the viewer care about the character in one way or another," and that it has "developed a reputation for creativity in developing and then promoting distinctive characters."
When it first agreed to license Acclaim in 1988, the wrestling giant provided use of its World Wrestling Federation name and all related copyrights. But the agreement came to a halt when, in 1999, after an audit of Acclaim's books, WWF alleged Acclaim had violated provisions of the contract.
Jesus, not that I ever want to see people lose jobs, but I just don't know how Acclaim is still in business...
