In a dispute over whether an arbitrator has authority to grant a video game developer and publisher a perpetual license in the intellectual property as a remedy for the developer’s fraud and breaches of contract, the Fifth Circuit found that the arbitrator’s creative award must be upheld under the Federal Arbitration Act, and set forth new guidance for courts confronting similar issues.  Timegate Studios, Inc. v. Southpeak Interactive, LLC, __ F.3d __, 2013 WL 1437710 (5th Cir. April 9, 2013).

The developer and publisher had a 35-page contract setting out the terms of their work to create “Section 8,” a “futuristic military-style video game” (not one about affordable housing).  The contract called for arbitration.  It also gave the developer exclusive ownership of the game’s intellectual property, with the publisher only having a license to market, publish and distribute the game.  It prohibited the publisher from preparing “derivative works.”

Related Posts

Court Vacates $125M Award Due To Arbitrator’s Misleading Disclosures
June 9, 2014

Today we take a close look at that rare creature: an opinion finding sufficient basis under the FAA to vacate an arbitration...

2013 Annual Survey of Fifth Circuit Class Action Cases
May 12, 2014

The Fifth Circuit Court of Appeals and the federal district courts in Texas, Louisiana, and Mississippi saw a decrease in class...

Fifth Circuit Holds Issue of Arbitrability Must be Decided by an Arbitrator in Pharmacy Dispute
May 1, 2014

The United States Court of Appeals for the Fifth Circuit has ordered that a dispute between numerous independent pharmacies...