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Friday, May 01, 2009

Valve suing Activision. Obligation shouldn't be that difficult a concept

Back in 2002, Valve had a bit of a dustup with Sierra over royalties. The original lawsuit went to arbitration, and after reviewing the case the arbitrator decided that Sierra should pay Valve US$2,391,932. It was less than Valve wanted to get, and more than Sierra wanted to pay, but everyone signed off on it anyway.

Fast-forward. Sierra was a part of Vivendi, and as a part of the merger last year, that debt is now a part of Activision-Blizzard.

So, Activision cuts the cheque to Valve, but for only US$1,967,796, basically because they felt that they'd overpaid Valve US$424,136 in previous years. Valve, for their part is filing a suit because Activision is not paying the agreed-on amount.

Now, that's a classic piece of stupid on Activision's part. The smart way to go, if they have indeed overpaid Valve previously, is to pay the originally agreed-on amount (US$2,391,932). That immediately closes their obligation with respect to the 2002 decision. Then they can file a lawsuit, or seek arbitration, or get Valve to agree to pay up, or to take a lesser sum of future payments. Whatever. They're in the clear, and their legal position is solid.

But, no. That would be too easy.

Instead they short-pay, essentially failing to meet their legal obligations, which opens them up to a lawsuit -- and potentially to the forfeiture of the US$424K (and perhaps more).

It makes me wonder if Activision's suddenly so desperate for cash that the US$424K is just out of their reach -- or if Big Bird is making the calls here. Actually, no - getting this right just isn't that complicated. It's at the Sesame Street level of responsibility and obligation. Big Bird could probably have handled this one just fine and still managed to sing an uplifting song about it.

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