The term “space marine” has been alive and well for over 80 years. Authors such as Bob Olsen, E.E. Smith, and the renowned Robert Heinlein used the expression in connection with various short stories, novellas, and novels. Olsen published “Captain Brink of the Space Marines” and “The Space Marines and the Slavers.” while Heinlein’s “Misfit” and “The Long Watch” both reference to the phrase.

More recently, space marines appear in and are integral to Games Workshop’s Warhammer 40,000 universe. These genetically enhanced super-soldiers serve the God Emperor of Mankind in a dystopian future and appear in table top games, video games, and literary works.

Though Games Workshop owns registered marks in the term “space marine” in connection with games, they have additionally claimed a “common law trademark claim” over the idiom in other media. Hogarth, and many science fiction authors and enthusiasts, feared that this claim could cause science fiction to lose one of its fundamental archetypes.

Hogarth contacted The Electronic Frontier Foundation (“EFF”) fearing that a legal battle with Games Workshop after private defense firms quoted prices outside of her budget. EFF intervened on Hogarth’s behalf, and Amazon has reinstated the e-book for sale. Games Workshop’s claim to the term in connection with books, EFF argues, is disproportionate and describes the company’s behavior as trademark “bullying.” EFF encourages Amazon to ensure their “trademark takedown policies include easy-to-use counter-notice procedures.”

It was 1993 when Disney brought a lawsuit against a company, Goodtimes Home Video Corp. in the Southern District federal court in New York. Goodtimes released an animated “Aladdin” movie around the same time Disney did and Disney brought suit against Goodtimes. Disney lost, and apparently Hollywood largely assumed from thereon out that there wasn’t much that could be done about knock-off movies. If a low-budget movie studio released a similar movie as a big-budget blockbuster, then that was just the way things were and the big studios had to live with it.

Fast forward to 10 years and thousands of miles away from that lawsuit….

An exciting archaeological discovery happened in 2003 on the exotic Indonesian island of Flores. Nine skeletons were found of humanoid creatures that were approximately three feet tall that appear to have lived within the last 100,000 years, perhaps as recently as 12,000 years ago. Thus, these ‘mini’ humans would have coexisted with modern human ancestors, who came to the island at least around 45,000 years ago. There were numerous stone tools found, appropriately sized to the yard-tall humanoids. Three feet tall people, wow, how cool! The new species were unveiled on October 28, 2004, and swiftly nicknamed “Hobbits” even to the extent that the proposed scientific name for a time was Homo Hobbitus. Yet, the species became officially named Homo Floresiensis.

An exciting business discovery happened in 2005 for the heads of Asylum Studios when Blockbuster ordered 100,000 copies of their low-budget, direct-to-DVD “H.G. Wells’ War of the Worlds,” which was released the same month as Steven Spielberg’s big budget adaption of “War of the Worlds” hit theaters. Both were modernized adaptations of the 19th century classic and had movie posters and promotional materials which were, well, not highly dissimilar in appearance. Let’s try some math: 100,000 copies x $12.99 = $1,299,000. $1,299,000 – anywhere from $200k-$1MM in budget = big profits for Asylum. Looks like there is good money in direct-to-video low budget versions of big-budget theatrical releases, or “mockbusters” as they came to be called. From that point on, Asylum has been a specialist in the “mockbuster” genre, bringing such gems as: Snakes on a Train, The Da Vinci Treasure, Halloween Night, Pirates of Treasure Island, Transmorphers (1 & 2), Death Racers, The Day the Earth Stopped, The Terminators, Paranormal Entity (1, 2, & 3), Almighty Thor, Battle of Los Angeles, and earlier this year: Abraham Lincoln vs. the Zombies. Asylum did not bring you: Snakes on a Plane, Da Vinci Code, Halloween, Pirates of the Caribbean, Transformers (1 & 2), Death Race, The Day the Earth Stood Still, The Terminator (any), Paranormal Activity (1, 2, & 3), Thor, Battle for Los Angeles, or Abraham Lincoln: Vampire Hunter. All of the Asylum releases are concurrent in time with the big budget releases.

Earlier this year, in April 2012, Asylum ran into legal trouble with Universal over “American Battleship” a mockbuster version of “Battleship.” Universal was reported to have spent $30MM promoting the $100MM “Battleship” movie, and filed suits on both sides of the Atlantic to enjoin Asylum. Universal met with some success, being one of the first post-Aladdin cases to try to do something about knock-off movies. Perhaps someone read the Disney v. Goodtimes opinion and realized that the precedential value of the opinion is solely to show what a badly handled, stupidly done case that was. “American Battleship” was renamed “American Warships.”

Also earlier this year, around August 2012, Asylum had announced plans to release “Age of the Hobbits” on December 11, 2012, just a few days before New Line’s “The Hobbit: An Unexpected Journey” was set to hit theatres. “Age of Hobbits” deals with our friends the Homo Florensiens that the archaeologists discovered in 2003, and their battle against komodo dragon worshipping cannibals, which archeologists might not have found at all. To be fair, the tagline for “Age of Hobbits” is, “They are not Tolkien’s Hobbits, they are real!” “Age of Hobbits” was filmed starring Christopher Judge of Stargate: SG-1 and Bai Ling the creepy-hot-eye-plucking-incest-sister from “The Crow” (the original movie).

Not dissuaded by the tagline, emboldened by the success of Universal, and donning protective lenses, MGM, New Line Cinema, Warner Bros., and others filed suit on November 7, 2012, in a federal court in Central California (Los Angeles) to prevent “Age of Hobbits” from being released under that title. On November 21, an ex parte application was filed for the Temporary Restraining Order, and the Honorable Philip S. Gutierrez issued his 32 page opinion granting the TRO on December 10, 2012.

NiC has seen it misreported that New Line and MGM “won the lawsuit,” and while winning the TRO is certainly a victory, it is not in a legal sense winning the entire lawsuit. There is still a hearing set for January 28, 2013, as to whether to make the TRO a preliminary injunction. Theoretically, plaintiffs could still lose that, even if it is unlikely they would. Even if the injunction is won, injunctions can be revisited based on circumstances and there is still discovery, trial, appeal, and so on. You don’t need to have gone to law school to ask yourself: does winning a “temporary” restraining order sound like a permanent victory?

Yet, in the meantime, “Age of Hobbits,” now being renamed “Clash of Empires” in some markets, and “Dawn of Mankind” in others, will not be released in December as “Age of Hobbits.”

In 2009, Kowalczyk left the band to start his own solo career. As one might expect, promotions for his tours and solo albums have often made strong reference to the fact that Kowalczyk was the singer for Live. This has prompted suit from United Action, filed earlier this month in Manhattan federal court, for trademark infringement, trademark dilution, unjust enrichment, and other causes of action. The essentials of the suit is that Kowalczyk inappropriately used the former band’s name to promote himself, essentially misleading the public into thinking that he was still a part of Live, or that his performances are still somehow linked to Live. After he left, Kowalczyk was replaced by Chris Shinn and Live continues on.

This suit is likely to hinge on specific facts and representations. This reporter was actually in a Nevada casino a previous year that Kowalczyk was going to perform in as pat of his solo act, and saw first-hand his promo reel for the tour, which the casino looped repeatedly as they do. While the promo-reel certainly mentioned that Kowalczyk was formerly part of “Live” it did emphasize that he was a former singer for them starting his solo career on his own tour. It did not seem a reasonable person, or even a non-dunderhead, could mistake that Kowalczyk was no longer part of “Live” anymore, as it touted the visionary new direction for music his solo work would take the audience. Of course, NiC has not seen every bit of promotional material out there, and the devil is always in the details in lawsuits.

If the only thing that can be established is that Kowalczyk mentioned that he was the former singer of “Live” and nothing else, this is not a promising case for Plaintiff United Action. As a true statement of fact, Kowalczyk should be free to mention that he was, in fact, the former singer for “Live” if it is not done in a misleading manner. For example, in 1998 Playboy Enterprises sued 1981 Playmate of the Year Terri Welles for touting on her personal website that she was a former Playmate of the Year. Playboy sued, since her site was unaffiliated with them; however, the Court found it did not violate Playboy’s trademark, since Welles was merely stating a true fact and not misleading the public into thinking that Playboy had sponsored her site. Thus, a former bandmate should be free to mention what band he used to be in to promote his solo act, as long as he doesn’t mislead. NiC will be interested to see how this lawsuit plays out.

In the meantime, ‘Dotcom also used his expertise to try to get into computer security consulting, and in 1994 founded a company called DataProtect. In 1999, DataProtect introduced a special Mercedes-Benz with a built-in 17″+ flat screen monitor, Windows, and mobile broadband wireless. Yes, mobile broadband wireless in a Mercedes in 1999. In 2000, Dotcom sold 80% of his shares to German company that when bankrupt the following year in the (regular) dotcom-bubble crash. Dotcom and his modified Mercedes have been a frequent participant in the international road rally event the Gumball 3000, winning it in 2001, and finishing in 2004. Yes, he’s also won an international road rally.

In 2001, Dotcom did a couple things that would result in a 2002 and 2003 conviction, including Germany’s largest insider trading case at the time, and embezzlement. The embezzlement charge was due to a ‘loan’ that Dotcom arranged between two companies that he owned, which ended up with money in his pocket and both companies going bankrupt. Dotcom maintained he was innocently ‘dazzled’ and thought he could repay the loan. The insider trading was part of a pump-and-dump scheme. Here’s how ‘pump-and-dump’ works. First, you buy shares of a stock, generally a troubled ‘penny stock’ which trades cheap, so you can buy a lot shares. In this case, it was 375,000 Euro worth of LetsBuyIt.com, a nigh-bankrupt company. Second, you ‘pump’ the stock, by making knowingly false claims to the public about good prospects for the company’s future. Here, Dotcom announced he would be investing 50 million Euro that he didn’t have into LetsBuyIt.com. Then, when the stock is inflated thanks to your misrepresentations, you ‘dump’ the stock by selling it off and pocketing the profit. Here, when Dotcom sold off his shares a few days later, the 375,000 had become over 1.5 million Euro. He was arrested in Bangkok in 2002 and deported back to Germany.

Jump to March 2005, the year Schmitz legally changed his surname to Dotcom. It is at this time Dotcom claims that he reformed his criminal ways and set out to start a new life on the right path. He forms the company Megaupload Limited as a Hong Kong based business. There will be a lot more on Megaupload in subsequent parts of this story, but it should be noted that the company grew so large as to become 4% of all internet traffic at its peak, with 50 million users a day. That is correct, 4% of ALL internet traffic was on Megaupload, the 13th most popular site on the internet.

With his company reaching revenues of $175 million annually, in 2010, Dotcom and his family moved to New Zealand where he was granted permanent residency. He leased the largest private residence in all of New Zealand, a $30 million dollar mansion in Coatesville. He began making large charitable donations in 2011, including earthquake disaster relief, and funding public fireworks shows. Yet, New Zealand has a good character test to be able to purchase land, and Dotcom was denied the power to purchase the mansion when the lease expired, though he remained living there, presumably on a new lease.

In November 2011, the videogame Call of Duty: Modern Warfare 3 released. In the first 24 hours, there was 7 million hours of gameplay logged and $400 million spent, making it the largest entertainment release, well, ever. By contrast, Avengers shattered box office records by making $200 million in its opening weekend. From his mansion in New Zealand, Dotcom used the name MEGARACER to become the #1 player on the leaderboards. Yes, Dotcom was the best player in the biggest all-time videogame. This video shows his path to #1:

Dotcom maintained the number one spot in MW3 until his arrest in January of this year for US criminal copyright infringement related to Megaupload, which will be the subject of subsequent parts to this important, and interesting, story. Next, we trace the shape of the Modern Warfare between entertainment and internet companies worldwide.

Mr. Schilling had a great pitching year in the 2007 season, taking his team to the World Series Championship. It was the second time in history that a pitcher over 40 had started a winning World Series game. In 2007, Green Monster Games also changed its name to 38 Studios after Schilling’s jersey number, though reports have conflicted over the origin of the name. Shortly after his baseball 2007 season though, Schilling went free agent when his contract expired, signed a one year deal with the Red Sox, then got a shoulder injury which sidelined him for that 2008 season. Though in 2008, 38 Studios brought in the Lead Designer for ‘Everquest’ to work on their project.

Unfortunately, Schilling did not fully recover and announced his retirement from baseball in early 2009. On the videogame front, in 2009, 38 Studios acquired Big Huge Games from THQ, which had developed ‘Rise of Nations’ and had been working on a newsingle-player RPG. Thus, plans were set. R.A. Salvatore had developed 10,000 years of lore and history for the world setting of the Kingdoms of Amalur. It was decided that the project would be done in two stages. First, the single-player RPG that Big Huge Games was working on would be retooled into a Kingdoms of Amalur game which would introduce gamers to the rich world. Then the MMO, codenamed ‘Project Copernicus’ while in development, would be the follow-up release. “Reckoning” was the name of the single-player title to be published by Electronic Arts. At some point, Ken Ralston, the Lead Designer of the outstanding single-player RPG “Elder Scrolls IV: Oblivion,” a critical and commercial success, was also brought in.

In 2010, things began to really be looking up for the retired pitcher/videogame lover. In a deal with the Rhode Island board of Economic Development, a $75 million guaranteed loan was made to 38 Studios in exchange for agreeing to relocate and bring 450 jobs to Rhode Island by the end of 2012. In mid-2011, 38 Studios relocated to Providence, Rhode Island, bringing 160 employees to the new office space. By the end of 2011, 38 Studios had spent $118 million without generating any revenue thus far. A $28.7 million advance for Reckoning had been given by Electronic Arts, thus roughly $90 million of that was attributable to the ‘Copernicus’ project.

Yet, trouble was looming. In spite of the Massive Money Output, Copernicus was still about $60 million shy of being completed. The pressure to bring so many jobs was increasing 38 Studios overhead considerably as the staff was pushed to exceed 400 employees. The soft economy was also taking its toll. The initially popular Star Wars: Old Republic MMO ran into some unexpected trouble retaining subscribers over the winter. Thus, the influx of new investor money was drying up as they became skittish about the long-term success of another MMO. In the first three months of 2012, 38 Studios spent $15.4 million dollars, bringing the total spent on ‘Copernicus’ by end of March 2012 to $104.5 million, which is not atypical since MMO development often exceeds $100 million.

Everything was hinging on the success of Kingdoms of Amalur: Reckoning. Analysts had predicted that 2-3 million units of the game would sell, probably largely due to the all-star team (Salvatore, MacFarlane, Ralston, etc.) behind it. This would be crucial for 38 Studios, as sales would need to exceed 2 million before the company would see any royalties coming in. Yet, when Reckoning released in early February of 2012, just five months ago, it ‘only’ sold 1.3 million copies. Metacritic shows a critic review of 80-81, depending on platform, and user rating of 7.6 (6.1 for PC). Things were grim, and it was too late for 38 Studios to generate any new financing of substance.

Come May of this year, 38 Studios missed a payment to Rhode Island and a payroll to its employees. That same month, everyone left or was laid off, and blood was in the water. The Executive Director of the Rhode Island board of Economic Development resigned, 38 Studios filed for bankruptcy, and it is reported that everyone from the Rhode Island Attorney General to the FBI is investigating the affair, though any wrongdoing on Schilling’s part has yet to be suggested. Late last month, Schilling addressed the failure, stating that he personally lost $50 million in 38 Studios. It is hard deny Mr. Schilling is devoted gamer, whether digitally or in real-life.

This story demonstrates the high-stakes world of videogame development, which is similar to the Hollywood blockbuster movie-making business, in that middle-sized developers are essentially required to bet their company on one big title. Unless you are a massive company, it is impossible to eat a loss in excess of $100 million, which is apparently what it takes to get an MMO off of the ground. Now Rhode Island is looking to take the assets of 38 Studios in bankruptcy court, which at least will probably include the IP rights to the 10,000 years of backstory developed by Salvatore.

After four and half years of litigation, EA has decided to settle the claims, with the class action settlement filed last Thursday. The major terms will be a refund of almost $7 per game for older titles (GameCube, PS2, Xbox) and almost $2 for newer (Wii, Xbox 360, PS3). In addition, EA will let their exclusive deal with the AFL expire in 2014 and not pursue another exclusive AFL deal for 5 years thereafter.

Currently, the settlement is awaiting court approval. In class actions, the court must approve a settlement to be sure that the interests of the class are being protected. Otherwise, a Defendant company and the Plaintiff Class attorney could strike a deal that benefited themselves more than the class. Yet, this appears on its face to be a good deal for the consumers, and court approval is expected. Purchasers of EA football titles from January 1, 2005 to the present should contact the plaintiffs’ counsel Hagens Berman at maddenNFL@hbsslaw.com.

The uDraw Game Tablet for Wii met with initial success. So much so that THQ planned a November 2011 release of a uDraw for Xbox and PS3 as well as Wii. Analysts predicted over a million units would be sold and over a million units were manufactured. Things looked great. Yet, the holiday season was not kind and as of February 2012, THQ had 1.4 million unsold units and a $100 million shortfall from which the company is stil struggling. THQ announced that it will get out of the peripheral business and refocus on content. Share prices dropped from $3.89 to $.60.

Now shareholders have filed suit against THQ in Central District Court in California alleging securities violations. Without self-interested dealings, executives are generally not punished in court for bad business decisions, thus the action will probably be whether THQ executives made material misrepresentations in their public statements regarding the sales (or lack thereof) of the uDraw Game Tablet. Otherwise, THQ is certainly not the only videogame company that suffered from betting big on peripherals during the recent fad over them, only to find they’ve gone Dutch Tulip when the peripheral market cooled.

The Mill is a London-based, award-winning advertisement company and their suit filed today against Ubisoft for unpaid fees relating to the Rainbow 6 trailer reveal that almost $600,000 was the rate for a 120 second trailer to be made, presumably one which a 1-minute version and a 30 sec version can be made from. According to a complaint filed in Canadian Superior Court in Montreal, the ~$600,000 was to be divided into 4 equal payments as certain milestones were delivered. The Mill claims that Ubisoft made continual material changes to the requirements which resulted in The Mill notifying Ubisoft that additional fees would be required, to which Ubisoft did not object. In anticipation of the final payment, The Mill sent a trailer to Ubisoft which was shown at the Video Game Awards in December 2011 to favorable reception. Yet, The Mill claims Ubisoft then, for the first time, expressed dissatisfaction with the trailer and work as a whole, refused to make the final payment or pay the extra fees. Thus Ubisoft is sued for 147,564.60 British Pounds sterling, or $232,860.23USD.

A video of the trailer can be found here: http://www.gametrailers.com/videos/h1hyow/rainbow-six–patriots-vga-2011–exclusive-debut-trailer

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THQ is a videogame publisher that has many original titles, such as Saint’s Row and Darksiders, as well as publishing games based on licensed material, such as South Park, Warhammer: 40,000, and WWE wrestling. THQ game producer Julia Sessing called James D. Papa regarding his ownership of songs such as “Badstreet USA” “Man Called Sting” and a dozen other titles of which Papa is the reported composer or co-composer. Though these songs are not all radio hits or known in every household, they are identified with entrance theme music for wrestlers, particularly Michael “P.S.” Hayes, of the wrestling group the Fabulous Freebirds. Sessing contacted Papa in anticipation of a “Legends of Wrestlemania” title, yet later indicated that THQ records showed WWE as owning “Badstreet USA” and other titles.

Papa then checked with Broadcast Music, Inc. (BMI) which handles collecting licensing fees and distributing royalties from artists. According to a complaint filed in federal court in Texas, World Wrestling Entertainment (WWE) had improperly re-registered themselves as the owners of the song, when Papa was the true owner. Thus, Papa has filed a complaint in federal court in Texas to re-establish his ownership, collect past royalties, enjoin further misuse, and so on. Now Papa has to watch for a Motion to Dismiss off of the top ropes.

Photo source:bleacherreport.com

Robotech Industry Panel

Nerds in Court was able to attend the Robotech panel at Comic-Con, as well as talk to Tommy Yune, President of Harmony Gold at their booth, and we’re bringing news for Robotech junkies.

Harmony Gold are in talks with Warner Bros. to do a live action blockbuster adaption in the $100MM+ mark with the full video-game and other tie-ins to boot. One can only imagine the First Robotech War alone would be a Lord of the Rings sized trilogy at a minimum, and even that would cut out a lot of story. Harmony Gold confirmed that Lawrence Kasden (Raiders of the Lost Ark, Empire Strikes Back) will be the screenwriter taking on the task, along with Tobey Maguire (Spiderman) producing and starring, and other large, big names to boot. So far it has the makings of a AAA title judging from the names associated with the project. Yet, no date is set as Harmony Gold are letting their license stay wide open to give Warner Bros. the time to make sure they do it right. When the project does happen, it is sure to be the biggest event at Comic-Con that year. Get in line for 2016?

Likewise, no date is set for a HD redo of the original episodes using modern CGI, though again Mr. Yune knows there is considerable fan interest. There has been substantial work put into restoring and enhancing the old animation, however. In fact, a lot of work has gone into archiving every bit of recording that could be found and Harmony Gold (HG) continues to make these available to fans and cram them into extras on every new complete edition. These range from different music arrangements in battle scenes of early episodes to alternate recordings of “It’s You” with 10 hours and more for the most die-hard fan in various forms. HG continues to document Carl Macek’s legacy with historical completeness and make it available for fans. Further, Frank Catalano, the voice of Rand, wrote a book, “Rand Unwrapped” which tells stories about the early years, including his posing in costume as Rick Hunter for promotional appearances, and his choice to bring an element of Three Stooges’ Curly to Rand’s voice. HG are also using e-books to bring every hard-to-find title to fans that might be looking for obscure titles with small printings. It looks like Harmony Gold’s current focus is primarily on preservation and restoration, though there is a new release planned called Robotech: Love Live Alive, which incorporates new work with unused footage from New Generation. No release date is set yet.

HG has extended the Robotech game license to Palladium, so expect more RPG material. As well, Battletech fans looking for miniatures will be happy to know HG extended the miniature license to Palladium, so expect some Tomahawk (Warhammer) and Super Veritech Armored Valkyrie style (Phoenix Hawk) figurines. In fact, PalladiumBooks.com is supposed to have an open call for sculptors interested in recreating the history and being the designer.

Steven Yun, VP of New Media for Harmony Gold, and Svea Macek, comic artist of Macross #1 (and Carl’s widow) were there at the panel with Mr. Yune to answer questions as well. Hundreds of loyal devotees that will never forget the Daedalus Maneuver or the rise of the SDF-1 at the end of the First Robotech War had crowded into the panel after a long line. Svea Macek was visibly touched and commented how happy Carl would be that over 25 years later his legacy continues to command so many fans worldwide. Yet, until Warner Bros. moves forward, we’ll just have to wait to see Rick and Lisa, Claudia and Roy, Max and Miriya, Breetai and Exedore, and, of course, Khyron and Azonia, on the big screen. Apparently when we do, however, it will be well worth the wait.