LGJ: A case of tortious interference

Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games:

No, it's not a symptom of the dreaded Swine Flu, but there has been a seeming rise in disputes concerning "tortious interference" in the games industry as of late. The most notable example being the Scratch: The Ultimate DJ dispute. Of course, from the first appearance of that curious word "tortious," there's been much confusion; be it over the term's actual meaning or it being incorrectly interchanged with the non-legal word "tortuous" (meaning winding or twisting).

The word "tortious" comes from "tort," which is a civil wrong that results in damages. So, "tortious interference," from a definitional standpoint, is when someone intentionally interferes in someone else's business or contractual relationship and causes civil damage. These two varieties of tortious interference are not the same on a more detailed level, however.

When someone commits tortious interference with respect to a contract, that person is either convincing one party to a contract to not perform or preventing them from performing. In this case, it would be the other party to the contract who would be able to bring a lawsuit. On the other hand, tortious interference with a business relationship is different. This occurs when the interfering party prevents someone from establishing or maintaining a business relationship. For example, stealing a client list or making false accusations against another business might be tortious interference, in addition to the other possible claims that might exist for those actions.

The games industry is a heavily contract-driven industry, so most claims of tortious interference in a gaming context are likely to be concerned with contracts. Rather than further dissect the Scratch issue, I'll illuminate the big picture of tortious interference with a similar, but hypothetical situation:

Let's say that a saxophone-based music game was the supposed "next big thing," and to that end, a small upstart company called Blues Software was developing the game based on an alliance with sax manufacturer Yahama. Blues Software got Yamaha to make a half dozen Sax controllers. Blues decided on the title "Swingin' Sax" for its game. As a development model, Blues was doing all of the art in-house, but had contracted with Horn Studios for the game engine's programming.

The contract was pretty standard, with a series of milestones and associated milestone payments. It was anticipated the project would be done in no more than 18 months. About 8 months later, the development of Swingin' Sax was stalling. Horn Studios was behind, and based on some unrelated projects failing, needed an infusion of cash. Enter Big Games, who had recently signed a contract with Fox to develop "Lisa Simpson's Sax Hero" and its follow-up "Lisa Simpson's Big Band."

There are varying degrees of severity of tortious interference that could come into play at this point. If Big Games had no idea about the Swingin' Sax project, and contacted Horn Studios to develop the engine for Sax Hero, there might be a finding of tortious interference if Horn gave up work on Swingin' Sax for Sax Hero. More likely, though, is that Big Games would be aware of Horn Studios' work, and if Big Games then tried to induce Horn Studio to quit work on Swingin' Sax in favor of Sax Hero, specifically to prevent Swingin' Sax from beating Sax Hero to market, then there's a pretty certain and egregious case of tortious interference with the contract between Blues Software and Horn Studios.

There could be tortious interference with a business relationship that arises, too. Say both Blues Software and Big Games were targeting similar music artists for use in their games. If Big Games went to these artists and negotiated non-exclusive licenses, but then also tried to convince them not to work with Blues Studio, then that might be grounds for a tortious interference with a business relationship claim.

So do recent tortious interference claims in the game industry say anything about the health or integrity of the industry as a whole? As with most other industries, this sort of litigation isn't really a barometer. Ultimately, in all industries, business arrangements work out and others fail, and when something goes wrong, it often leads to a court battle of one type or another. Such is the nature of doing business in today's world. While there are certainly unethical and apparently unethical actions in the market at any given time, it takes more than a small uptick in litigation to show there might be something wrong. The game industry is just continuing to grow, and as it does, the number of disputes will likewise grow.

[Image credit: VGBoxArt]

Mark Methenitis is the Editor in Chief of the Law of the Game blog, which discusses legal issues in video games. Mr. Methenitis is also a licensed attorney in the state of Texas with The Vernon Law Group, PLLC and a member of the Texas Bar Assoc., American Bar Assoc., and the International Game Developers Assoc., where he is a board member of the Dallas chapter. Opinions expressed in this column are his own. Reach him at: lawofthegame [AAT] gmail [DAWT] com.

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