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Connecticut Court Dismisses WWE Claims Against Jakks, THQ

Connecticut Court Dismisses WWE Claims Against Jakks, THQ

September 2, 2008 | By Eric Caoili

September 2, 2008 | By Eric Caoili
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The Superior Court of Connecticut dismissed World Wrestling Entertainment's (WWE) state claims that toy and video game licensees Jakks Pacific and THQ engaged in bribery, antitrust, and conflict of interest, among other charges.

Officials from WWE filed a fourteen-count complaint against toy maker Jakks Pacific and THQ in 2004 accusing the companies of bribing WWE's former licensing agent Stanley Shenker and Licensing and Merchandising SVP James Bell. WWE sought to void its licenses to both companies, in addition to various damages.

The lawsuit alleged that Shenker received payments from Jakks subsidiaries related license grants to create video games based on WWE properties. Shenker was also accused of paying Bell to ignore higher offers from Activision and THQ -- forcing the latter into its partnership with Jakks.

The Connecticut Court dismissed WWE's state antitrust claim, pointing to the lack of any antitrust injury under state law and noting that that the federal court already dismissed the claim under federal law.

The Connecticut Court also dismissed all of WWE's other federal claims against Jakks Pacific, THQ, and their senior officers, including claims alleging violations of Racketeer Influenced and Corrupt Organization Act (RICO), the Sherman Antitrust Act, and the Robinson-Patman Act, based on prior federal court decisions.

The Connecticut Court also dismissed WWE's claims that aimed to get its licenses back from THQ and Jakks. WWE intends to appeal the rulings.

WWE's remaining claims, which were not the subject of the motions before the Court, relate to deals with Yuke's Co. Ltd., a developer and distributor in Japan that has an agreement with THQ to publish WWE titles in the region.

"The Connecticut Superior Court's decision marks a significant milestone in resolving the WWE litigation," says THQ's EVP of business and legal affairs James Kennedy. "We believe the remaining claims are without merit and we intend to defend ourselves vigorously."

THQ filed suit against Jakks Pacific in a separate court case over the use of the WWE license in video games. THQ won the WWE royalty suit, and the companies arbitrated licensing fees THQ will pay Jakks Pacific as part of a new joint venture. Under the terms of the joint venture, THQ is responsible for all franchise operations, with Jakks "not actively involved."

The two companies plan to launch WWE SmackDown vs. Raw 2009 for the Xbox 360, PlayStation 3, PlayStation 2, PSP, Wii, DS and mobile devices in fall 2008.

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