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THQ Wins WWE Royalty Suit Against Jakks Pacific

THQ Wins WWE Royalty Suit Against Jakks Pacific

March 3, 2008 | By Brandon Boyer

March 3, 2008 | By Brandon Boyer
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Putting to rest a lawsuit brought against the publisher in 2006, THQ has announced that it has prevailed in a court case against Jakks Pacific over the use of the WWE license in its games, and are now arbitrating licensing fees the company will pay Jakks in a new joint venture.

THQ says that Jakks delayed the original agreement in 2006 to decide on a suitable royalty rate, and the process was therefore moved to arbitration. Jakks, according to THQ, moved at the time to disqualify all but one of the arbitration judges assigned to the case.

The California Court of Appeals has now denied Jakks's petition, moving the case forward. THQ has also said in a statement that recent comments from a Jakks conference call "regarding the economics of the video game joint venture and expectations for future WWE video game sales, do not reflect the views of THQ or the THQ/JAKKS Pacific joint venture."

Under the terms of the joint venture, the publisher says, THQ is responsible for all operations, with Jakks "not actively involved."

"Accordingly," the statement reads, "Jakks Pacific’s statements regarding the economics of the joint venture and expectations of future joint venture performance are not based on any active involvement in the business operations of the joint venture."

THQ legal affairs executive VP James Kennedy said, "Contrary to Jakks Pacific’s statements that the arbitration process has been slowed for ‘a host of reasons,’ the sole cause of delay has been Jakks. We believed Jakks's position in its petition from the judge’s appointment of an arbitrator was wrong, and the Court of Appeals has now agreed. As we have stated since we filed suit to compel arbitration and appoint an arbitrator, we look forward to moving the arbitration process forward expeditiously, and we expect to prevail once an arbitrator has the opportunity to consider the facts in this matter.”

THQ president and CEO Brian Farrell added, “The WWE is a tremendous brand and we have consistently grown this franchise in the video game space on a global basis, with life-to-date sales of more than $1 billion. We are excited about the continuing potential of this brand.”

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