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Valve sues Activision for unpaid royalties

Legal battle extends back to a 2002 suit against Sierra

Valve has filed a complaint against Activision over the underpayment of royalties awarded earlier this month, totaling just over USD 424,000. Activision has said that the amount was determined by previous overpayment of royalties to Valve, and that if the court awards the money to Valve, Activision will counter sue for its return.

According to a complaint issued April 28 to a district court in Washington, which was unearthed by GamePolitics, Activision paid only USD 1,967,796 million of the 2,391,932 amount a court arbitrator ordered on April 6, claiming that the remaining sum of USD 424,136 was a reclamation of previously overpaid royalties.

According to Valve's complaint, this allegation of an overpayment "was not the subject of a Notice of Dispute as required by the Audit Agreement and was not discussed during the CFO conference between the parties, which the parties agreed in the Audit Agreement was intended to have the parties 'confer and attempt to resolve the Dispute...'"

On April 22, Activision said to Valve that it would not pay the remaining sum, and that if the award was granted by the court, it would counter sue Valve seeking recovery on the overpayment claim. The April 28 complaint confirms that Valve is indeed seeking the fee, as well as further damages.

This legal battle began in 2002, when Valve brought suit against Sierra Entertainment for unpaid royalties resulting from its distribution of Valve titles that included the Half-Life franchise. The suit was inherited by Activision in 2008, after its purchase of Sierra-Vivendi. The judgement in the amount of USD 2.4 million was finally granted earlier this month.


Frank Cifaldi