Electronic Arts Must Defend $400 Million Activision Suit Over 2 Developers

Electronic Arts Inc. (ERTS), the second- largest U.S. video-game publisher, must defend a contract- interference lawsuit for $400 million brought by its larger rival Activision Blizzard Inc. (ATVI), a judge ruled.

California Superior Court Judge Elihu Berle in Los Angeles today refused to dismiss all but one of the claims against Electronic Arts. The judge, without ruling on the merits of Activision’s claims, said the company had provided sufficient facts in its complaint for the case to proceed.

Electronic Arts had said in court filings that Activision failed to provide facts to support its allegation that the rival company intended for two of Activision’s executives to breach their contracts. The judge referred to Activision’s assertion that Electronic Arts sought confidential information from the executives in overruling the objection.

Robert Klieger, a lawyer for Electronic Arts, argued during the hearing that Activision hadn’t identified any confidential information Electronic Arts allegedly received and that the claim was “only a conclusionary allegation.”

Klieger and Steven Marenberg, a lawyer for Activision, declined to comment after the hearing.

Activision, based in Santa Monica, California, in December added Electronic Arts to its dispute with the two developers, Jason West and Vince Zampella, who had helped create the “Call of Duty” and “Modern Warfare” combat games as heads of Activision’s Infinity Ward subsidiary.

Unpaid Bonuses

The two sued Activision for $36 million in unpaid bonuses after they were fired in March of last year. They said Activision had terminated them to avoid making royalty payments on “Call of Duty: Modern Warfare 2,” the top-selling game the previous year.

Activision countersued the two developers, saying they had hired agents and secretly met and negotiated with Electronic Arts executives while still working at Activision.

After they were fired, West and Zampella set up Respawn Entertainment, which agreed to produce games for Redwood City, California-based Electronic Arts.

In addition, 38 current and former employees of Activision’s Infinity Ward unit sued last year, alleging they weren’t paid bonuses and royalties for their work on “Modern Warfare 2.” Their case has been consolidated with West’s and Zampella’s case against Activision.

The case is West v. Activision, SC107041, California Superior Court (Los Angeles County).

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net

To contact the editor responsible for this story: David Rovella at drovella@bloomberg.net

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