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CDV Wins Latest Legal Battle Against SouthPeak

CDV Wins Latest Legal Battle Against SouthPeak

February 23, 2010 | By Kris Graft

February 23, 2010 | By Kris Graft
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More: Console/PC

German game distributor CDV won the latest legal round against SouthPeak, parent of shuttered publisher Gamecock, with a UK High Court judge finding on Friday that SouthPeak was responsible for copyright infringement following a distribution deal that went sour.

But while Gamecock is referred to in the case, Gamecock's former CEO told Gamasutra that SouthPeak is taking his former company's name and using it as a "shield."

Friday's judgment is the latest milestone in a matter that dates back to a 2008 distribution agreement between Gamecock and CDV, in which Gamecock exclusively licensed the video games Dementium, Insecticide, Mushroom Men, Velvet Assassin, Hail to the Chimp, Pirates vs. Ninjas and Stronghold Crusader Extreme to CDV, according to the Gamer/Law blog.

But CDV claimed that despite a $7 million advance and an agreement that the games would be delivered by Christmas 2008, Gamecock, a subsidiary of SouthPeak, breached the distribution contract by not delivering four of those games on time, therefore forfeiting copyrights to those games to CDV.

CDV said Gamecock went ahead and tried to sell the games itself, despite the supposed forfeiture of copyrights to CDV, and a judge ruled in November 2009 that parent SouthPeak was guilty of breach of contract for three of those four games.

A recent U.S. Securities and Exchange Commission filing revealed that SouthPeak incurred $3.1 million in litigation costs from the lawsuit with CDV during the quarter that ended December 31, 2009.

But only on Friday did the UK judge address CDV's other claims against SouthPeak, which included inducing copyright infringement and inducing breach of contract, and sought reimbursement of legal costs. Gamer/Law said the judge found SouthPeak liable for inducing copyright infringement, as it was the parent of Gamecock, which was committing the infringement. The defendants must also cover legal fees, which could be substantial.

The judge did not find SouthPeak liable for inducing breach of contract, as the judge said the publisher did not realize it was in the wrong.

Mike Wilson, co-founder and former CEO of Gamecock, told Gamasutra in an email that the original Gamecock staff had nothing to do with CDV's claims against SouthPeak.

"It should be made clear that there has been no 'Gamecock' since Fall 2008," he said. "SouthPeak shipped Mushroom Men, Velvet Assassin, and Section 8 as SouthPeak Games... No one from Gamecock has been involved in anything whatsoever regarding any of this for the past 15 months." SouthPeak announced the purchase of Gamecock in October 2008.

Wilson accused SouthPeak of using the name as "a layer/shield in legal proceedings." He added, "I've dealt with some shady folks in this business, but never have I seen the likes of the tactics SouthPeak has stooped to continually in an effort to not pay anyone they owed through the acquisition."

"The good news is that, like CDV, anyone with the wherewithal to fight these crooks in court wins. It's just a shame that so many of the companies they shoved around were too small to fight back." The High Court's ruling does not affect any former Gamecock executives, Wilson said.

It's not the first time Wilson has spoken about his tumultuous relationship with SouthPeak. In 2009, he opened up about the publisher's alleged refusal to pay a number of Gamecock's existing contractors.

Gamasutra contacted SouthPeak for comment, but a representative was not available to comment as of press time.

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