Game Makers Must Battle it Out in Court (ERTS, ATVI)

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A California state court has denied a request from Electronic Arts Inc. (NASDAQ: ERTS) to dismiss a suit by Activision Blizzard Inc. (NASDAQ: ATVI) related to a dispute over two former Activision employees who spoke to EA about possible employment. The ruling means that the case will go to a jury trial unless a settlement is reached.

The suit appears to turn on who spoke first. If the employees, who had two years remaining on their contracts with Activision, had sought out a move to EA, that would be one thing. It would be a totally different thing if EA had tried to poach the employees.

When Activision fired the two, they set up an independent company and entered a deal with EA to publish and distribute the new company’s games.

The two employees have filed a separate suit against Activision claiming $36 million is owed to them in royalties for ‘Call of Duty: Modern Warfare 2,” a top selling Activision game.