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Valve sues Activision over 2002 royalty dispute

by Richard Mitchell on May 1st 2009 6:00AM

GamePolitics reports that a 2002 lawsuit between Valve and Sierra regarding royalties is getting ugly. Activision -- which inherited the suit when it absorbed Sierra in 2008 -- was to pay Valve $2,391,932, as determined by an arbitration agreed to by both parties. Activison later challenged the award, saying that Valve was overpaid by $424,136.

Valve claims that the complaint was not officially submitted to the "contractually agreed audit and dispute process" and states that the auditor thus refused to consider it. So, what did Activision do? It paid $1,967,796. Yup, that's exactly $424,136 less than the awarded amount. Furthermore, Activision stated it would sue Valve if the company attempted to have the court confirm the total payment due.

Undaunted, Valve is now asking that the court award it the deficient payment and officially close the arbitration process, thus barring Activision from attempting to re-open it. More legal fireworks, it would seem, are about to ensue.

Source

Tags: activision, lawsuit, sierra, valve

Reader Comments (34)

Activision is babies.

Here we go, no one know exactly what's going on here and I bet all the Valve fanboys are going to be bashing Activision.

I think this is hilarious. two huge companies living by double dog dares. Just beware of the Bumpus' dogs running in and eating the turkey!

Ubisoft is Babyz

@roger

It has nothing to do with being a Valve fanboy. Activision "determined" that they didn't have to pay the full amount and failed to provide sufficient proof that Valve was overpaid, as noted by the auditor who refused to include it.

What puts Activision further into the tank is when they made the statement that they would sue if Valve attempted to have a court determine the total amount due. Had Activision provided legal proof of dues owed to Valve then why would they be so catty about getting a court to figure out the final dues?

Activision is clearly throwing some bullshit around and it really pisses me off that Activision (who has a CEO that knows next to nothing about gaming) feels like they can push everybody else around because they are the biggest games publisher.

Well we all know what happened to EA when their britches got to big for em...

Valve fanboys bashing Activision?

When it's Rock Band VS Guitar Hero, it's RB fanboys...
When it's Gibsion VS Activision it's Gibson fanboys...
When it's whatever VS Activision, it's always whatever fanboys...
Now that it's Valve VS Activision, it's Valve fanboys...

What's with the victim complex, guys? Is it possible that Activision isn't this holy grail game company that you're painting it to be?

@Geoff

" and failed to provide sufficient proof that Valve was overpaid, as noted by the auditor who refused to include it."

That's not what it says at all. It says that they didn't submit their proof properly during the audit process. That's completely different than not having "sufficient" proof. They may well have had proof over overpayment but due to some technicality it got left out of the process.

@ vidikron

Fair enough, but then why would Activision effectively say "don't tell on us, or else."
If they really do have "sufficient" proof, why do they need to threaten Valve against taking action?

It just seems like such a jerk move. "Hey we're gonna sue you if you try to make things right. Don't you dare try to make us pay you the money we're legally obligated to."

Geez, in the time it took me to read that Activision have probably had to pay lawyers more than that to deal with this.... is 400k really worth the time and effort its gonna take them?

Good for Valve! Im glad someone is willing to try to put activision in their place.

I would love to see Gabe Newell with a pimp suit on in court! Smack activision in their seats and declare them guilty!

I know nothing about the law, I know nothing about who's in the right or who's in the wrong. What I do know is, I really like the idea of Activision losing money, and Valve getting money.

more money for valve means morer 10 dollar TF2 weekends!

Activision losing money means more guitar heroes and less money spent on making them good.

Though on balance maybe Valve could use the money to hurry up on episode 3, so go them!

really? I could just as well do with both companies being destroyed by a JDAM strike... I HATE Valve and I haven't cared about Actavision since Tenchu 1 dot dot dot

Then again, I HATE Hideo Kojima, final fantasy, and Will Ferral too. So I accept that my opinion doesn't matter.

As long as you can admit you're wrong Gavin, then that's fine with me ;)

Who do I want to win? One company that produced most of the games in my personal top ten list, or Activision? Hummmm, that's a toughy.

Yet another fine example of Activision being childish. What team was it that said when they switched from Activision to EA they said they're "working with adults now?"

Think that might have been Ghostbusters, but not sure.

It was the estate that owns the rights to the Bourne Identity. After Sierra botched the game they jumped ship to EA.

This law suit is not worth the bad press for either party.

wow Activision really has gone down hill. we all know valve is right and that Acti just has gone down hill ino old EA land

they should make a videogame about this

Yeah I don't get Activision's argument at all. They paid Valve less than the specified amount yet somehow they overpaid them by that same amount.

Does not compute.

It seems that Activision has been at the center of a lot of legal disputes lately. Stockholders can't like that, especially if the trend continues.

And isn't the point of arbitration that you can't argue with the outcome? Seems like a losing battle from the beginning.

It probably depends on how this "overpayment" was calculated. Everyone here is naturally taking Valve's side because they are popular, but no one here as any facts. What if somehow Valve was dishonest or otherwise withheld or misrepresented information about the rotalties they were due? With Activision absorbing Sierra, and thus the lawsuit, it's completely plausible that they wouldn't be completely familair with the situation and Valve pulled a fast one on them. Then suppose Activision discovered this after the judgement? If the judgement itself was based on incomplete facts then it seems it would be invalid.

I have no idea if any of that was what has happened here, but it's a completely plausible scenario. Valve makes good games, but they're still just a company and gamers are so busy kissing their ass these days they seem to forget that.

I actually don't really care about Valve (gasp!), I was just commenting on how I understand arbitration to work. Both games agree to use a neutral arbitrator for a binding resolution, regardless of the outcome. I agree that newly-discovered information could spur Activision to renegotiate the deal, but just paying the amount they decide and then sticking their tongue out at Valve is not a professional way to handle the debate.

Regardless of the outcome of this particular suit, I doubt that Activision's stockholders are happy with the amount of litigation that has surrounded the company lately. That is never a good sign, and can mean any number of bad things.

Just give Valve 7,069 copies of Modern Warfare 2 when it comes out.

Undoubtly, they would need to check those $424,136. What are those about? Without knowing that, it's irresponsible to point fingers at anybody. Not hard at all, considering Activision's history, but just irresponsible.

By the way, I love it when, in these articles, nobody says Activision Blizzard instead of simply Activision... Nobody wants to dirty Blizzard's holy name, and with good reason.

Fvck Activision and those Fvcking douchebags

So, Activision said that they'd sue Valve if they even considered checking the numbers? That's all kinds of shady...

I don't think even EA was ever this douchy.

Valve, you've once again proven your bad-assery.

Breaking News

Valve sues Activision over 2002 royalty dispute

Reader Comments (34)

Posted: May 1st 2009 6:04AM michaspi said

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