7 Studios has issued a counter-suit against Genius Products, claiming the publisher has committed a "textbook case of unlawful and unsavoury business practices".
The ongoing legal tussle started with Genius suing Activision over allegations that the publisher bought the developer, 7 Studios, in a bid to sabotage the upcoming Scratch: The Ultimate DJ game to the benefit of its own DJ Hero. This resulted in a court ordering 7 Studios to hand over the source code for Scratch to Genius.
According to Variety, 7 Studios' counter-suit is based around allegations that Genius was a novice and incompetent publisher, failed to obtain timely approvals from Microsoft and Sony to publish on their respective consoles, and still doesn't have approval for the PlayStation 3.
The developer also claims that Genius didn't provide the music it needed for the game on time, explaining that three months before Scratch was supposed to be completed, it had only less than 25 per cent of the tracks.
The turntable controllers were also said to have not been delivered to 7 Studios in time, delaying production even more by several months and despite a jump in production costs that Genius agreed to pay for, only one out of six months had been covered - costing the developer USD 1.25 million.
It was also claimed that Genius attempted to terminate the contract with 7 Studios and shopped around other publishers, hoping to sell the title. Genius' partner, Numark, supposedly went as far as attempting to recruit a Scratch producer, saying the project would be taken away from 7 Studios shortly.
Such a move, claims 7 Studios, would have left the developer out of pocket on the project while Genius and Numark brought in revenue from the sale.
The developer's complaint read: "The promises were made by Genius with the intent to induce 7 Studios to enter into the Developer Agreement, and to continue to develop the game to near completion, at 7 Studios' cost and expense, without adequate support from Genius so that Genius could then take the nearly completed Game and shop it to potential buyers and/or another developer who could complete the game using 7 Studios' substantial, confidential and valuable work product."