On March 30, 2011, Robin Antonick sued the hugely successful video game publisher Electronic Arts, Inc.(often referred to simply as “EA”) alleging that EA breached a development agreement executed in 1986 that entitled Antonick to royalties from derivative versions of the Madden Football series of video games and that EA was liable for fraud for allegedly making false statements and misleading material omissions solely “for the purpose of defrauding [Antonick] out of valuable trade secrets and other intellectual property and his contractual royalty rights”. Since its creation, the Madden Football series of video games (initially called “John Madden Football” prior to 1993) has reportedly sold 99 million units and generated almost $4 billion in revenue.
According to the Complaint filed in the U.S. District Court for the Northern District of California, “Antonick developed the first version of Electronic Arts’ now-famous Madden NFL Football video game for the Commodore 64, MS DOS and Apple II platforms.” The Complaint describes Antonick’s work as “ground-breaking” because at the time Antonick developed the relevant software in the 1980s, “it was widely thought impossible to successfully simulate an actual football game with eleven players on the field for each team due to the processing limitations of the current hardware.” Antonick alleges that he entered into a series of development agreements with EA over several years in the 1980s culminating with a final development agreement in 1986. The 1986 agreement allegedly “required Electronic Arts to pay Antonick royalties on not only the versions of the Madden game developed by him but also any derivative works and any works ‘derived’ from derivative works.” Antonick alleges that EA intentionally avoided paying royalties owed to him for decades and fraudulently misrepresented “the derivation of the current generation of Madden football games”, i.e., Antonick alleged that EA lead Antonick to believe that EA had “independently” developed subsequent versions of the Madden Football video game. Indeed, according to allegations, Antonick was not aware for several decades that his rights were being violated. Antonick allegedly learned that EA had not independently developed subsequent versions of the Madden Football video game and related software during publicity surrounding the release of the 20th anniversary edition of the Madden Football video game.
Antonick likely predicted that one of EA’s primary defenses to the allegations would be that he took “too long” to bring a lawsuit. Accordingly, in the Complaint, Antonick specifically recited allegations addressing the statute of limitations. Among other things, Antonick argued that the statute of limitations had been tolled because EA had fraudulently concealed and misrepresented certain facts to Antonick and, therefore, he did not know potential claims were possible until very recently.
The Court divided the proceedings into multiple phases. Antonick prevailed in the first phase where it was determined that his claims were not barred by the statute of limitations. Following phase one, the Court held that Antonick had failed to state his fraud claim and, therefore, dismissed it, but ordered that, in phase two, the jury would be “asked whether an ordinary reasonable observer would consider Antonick’s work and the latter Madden versions virtually identical when viewed as a whole.”
Subsequently, following a trial on phase two in July, a jury awarded Antonick $11 million for Madden Football video games published from 1986 to 1996. The case will now proceed to phase three where the jury will consider whether Antonick is entitled to damages for games sold after 1996.
As Antonick’s case against EA demonstrates, inventors, creators, authors, designers and the like must be extraordinarily vigilant and take proactive measures to ensure compliance with any and all agreements and, in the cases of violations, swift action to maintain, preserve and enforce rights (remember that delays in taking action can impair rights and, in some cases, extinguish rights). Grimes LLC has been particularly successful representing inventors, creators, authors, designers and the like in disputes against major publishers, developers and manufacturers.
The case is Antonick v. Electronic Arts, Inc., Case No. 11-CV-1543, pending in the United States District Court for the Northern District of California. We will continue to monitor and report on this case.
