Exhibit 10.20
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
)
HASBRO INTERACTIVE, INC., )
ATARI INTERACTIVE, INC., and )
ZAO ELORG, d/b/a )
ELORG CORPORATION, )
)
Plaintiffs, ) CASE NUMBER 00 CV 10231 (RGS)
)
- against - )
)
eGAMES, INC., f/k/a ROMTECH, INC.; )
XTREME GAMES LLC; )
MVP SOFTWARE INC.; and )
WEBFOOT TECHNOLOGIES, INC., )
)
Defendants. )
)
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STIPULATION & CONSENT JUDGMENT
Plaintiffs Hasbro Interactive, Inc. ("Hasbro Interactive") and Atari
Interactive, Inc. ("Atari Interactive") (Hasbro Interactive and Atari
Interactive collectively are referred to as "Hasbro"), and ZAO Elorg, d/b/a
Elorg Corporation ("Elorg") (all plaintiffs collectively referred to as
"Plaintiffs"); and defendants eGames, Inc., f/k/a RomTech, Inc., MVP Software
Inc., and Webfoot Technologies, Inc. (collectively "Settling Defendants") hereby
stipulate and agree as follows:
1. This Court has subject matter jurisdiction over the claims asserted by
Plaintiffs and personal jurisdiction over Settling Defendants. Venue of this
action properly lies in the District of Massachusetts.
2. Plaintiffs and Settling Defendants waive findings of fact and
conclusions of law under Rule 52 of the Federal Rules of Civil Procedure, except
as set forth herein.
<PAGE>
3. This Stipulation and Consent Judgment may be entered without costs as to
Plaintiffs or Settling Defendants and without further notice.
4. Plaintiffs and Settling Defendants agree not to appeal from this
Stipulation and Consent Judgment and not to attack the validity of this judgment
or any provision thereof in any collateral or subsequent proceeding.
5. This Stipulation and Consent Judgment and the ancillary agreements in
writing specifically referred to herein contain the entire agreement between the
parties and there have been no other promises, representations, or agreements
made between the parties.
6. Settling Defendants acknowledge and agree that Atari Interactive is the
sole owner and proprietor of all right, title, and interest in and to the
copyrights in the games called ASTEROIDS, CENTIPEDE, and MISSILE COMMAND; that
Elorg is the sole owner and proprietor of all right, title, and interest in and
to the copyrights in the game called TETRIS; that Namco Limited ("Namco") is the
sole owner and proprietor of all right, title, and interest in and to the
copyrights in the games called PAC-MAN and DIG DUG; that Elorg has granted
Hasbro Interactive an exclusive license for derivative works of the TETRIS game
in certain formats as defined in that license; that Namco has granted Hasbro
Interactive an exclusive license for derivative works of the PAC-MAN and DIG DUG
games in certain formats as defined in that license; and that all copyrights
claimed by Plaintiffs in the ASTEROIDS, CENTIPEDE, MISSILE COMMAND, TETRIS,
PAC-MAN, and DIG DUG games (collectively referred to hereinafter as "Plaintiffs'
Games") are valid. Settling Defendants will not contest or challenge the
validity of any of the existing copyrights claimed by Plaintiffs in the
Plaintiffs' Games and will not otherwise assert the invalidity of any of the
copyrights claimed by Plaintiffs in the Plaintiffs' Games.
<PAGE>
7. Settling Defendants acknowledge and agree that Elorg owns a valid,
inherently distinctive trademark in the TETRIS name, and a valid federal
registration thereto.
8. As used herein, "Games at Issue" means games that have used the
following names and any current or prior versions of those games, whether or not
called by those names: 3D Astro Blaster, Astro-3D, Debris, a/k/a Debris 32,
Intergalactic Exterminator, 3D Bug Attack, Missile Launch, a/k/a Missile 2000,
3D TetriMadness, TetriMania, TetriMania Master, 3D TetriMania, XTRIS, Trix,
Smart Boxes, Columns Millennium, 3D Geo Mania, 3D Maze Man, 3D Chomper, Maniac
Maze, 3D Frog Man, 3D Ms. Maze, 3D Munch Man, 3D Munch Man II, 3D Crunch Man,
Tunnel Blaster, and UnderWorld.
9. Pursuant to Rule 65 of the Federal Rules of Civil Procedure, Settling
Defendants, their officers, agents, servants, employees, attorneys, and all
other persons in active concert or participation with any of them (which does
not include distributors, retailers, resellers, or other downstream purchasers
who buy the Games at Issue without any violation of this injunction by Settling
Defendants) are permanently enjoined as of the dates set forth in paragraph 10
below from:
(a) licensing, assigning any rights to, copying, manufacturing,
marketing, advertising, shipping, distributing, or selling the Games at
Issue; and
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(b) any use of the name or mark TETRIS or any other name or trademark
that includes the term or sound TETRIS, the prefix "tetri," or the suffix
"tris" as all or as part of the trademark or any other name that is
confusingly similar to TETRIS as all or as part of any designation of a
product or service, including but not limited to in manufacturing,
marketing, advertising, shipping distributing, packaging, promoting or
selling computer or video games. Without limiting the above, it is
explicitly acknowledged and agreed that use of the names "Tetri-Madness,"
"3D TetriMania," "TetriMania," "TetriMania Master," "Galaxy of TetriMania,"
and "XTRIS" is enjoined, and Settling Defendants will execute assignments
to Elorg in a form to be provided by Elorg of any trademark rights claimed
in those names. Without limiting the above, it also is explicitly
acknowledged and agreed that Defendant eGames, Inc. will immediately
terminate its prosecution of any applications to register "TetriMania,"
"TetriMania Master," or "Galaxy of TetriMania" as trademarks with the U.S.
Patent and Trademark Office and will, within ten days of the execution of
this Stipulation & Consent Judgment, submit Express Abandonments with
Prejudice for each of these applications to the U.S. Patent and Trademark
Office.
10. The injunction in paragraph 9 above will be effective immediately as to
any downloading of electronic versions of the Games at Issue from websites and
will be effective beginning October 1, 2000, as to games distributed or sold on
CD-ROMs and through all other means. Settling Defendants will take the necessary
steps to ensure compliance with the injunction in paragraph 9 above by any of
their licensees (but expressly not including domestic distributors who purchased
finished product embodied in CD-ROMs without any violation of this Stipulation
and Consent Judgment), whether foreign or domestic, within the time frames set
forth in this Stipulation and Consent Judgment. Defendant eGames represents that
certain CD-ROMS of its games that are not Games at Issue contain advertisements
for Games at Issue that include demonstration versions of certain of eGames'
Games at Issue that permit limited play ("Demonstration Versions"). Based on
those representations, Plaintiffs agree that the injunction in paragraph 9 will
be effective beginning January 1, 2001, as to such Demonstration Versions of
eGames' Games at Issue that are sold as part of games that are not, and are not
advertised as, Games at Issue.
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11. Pursuant to Rule 65 of the Federal Rules of Civil Procedure, Settling
Defendants each will:
(a) to the extent they have not already done so, provide Plaintiffs'
attorneys no later than October 31, 2000, with two samples of each of the
Games at Issue, including but not limited to any products that include
those games, as well as a copy of any gold masters;
(b) subject to the obligations set forth in paragraph 11(a) above,
destroy no later than October 31, 2000, all but two archival versions of
the remaining copies of the Games at Issue (except for Demonstration
Versions), including any products that include those games, as well as any
gold masters, and all but five archival versions of any packaging, labels,
promotional materials, advertising and display materials used in connection
with the Games at Issue that are identical to those delivered pursuant to
paragraph 11(a) above. All but two archival versions of Demonstration
Versions of the Games at Issue will be destroyed no later than January 31,
2001. If any Games at Issue or materials related to the Games at Issue are
or have been returned from distributors or retailers at a point in time
when the injunction as to the specific games is effective, they will be
destroyed immediately after appropriate processing; and
(c) no later than February 16, 2001, serve on the undersigned counsel
for Plaintiffs a report in writing under oath setting forth the specific
steps taken by Settling Defendants to comply with the requirements in
paragraphs 9 and 11(a) and (b) above.
12. Settling Defendants will terminate any licenses and distribution
agreements insofar as they relate to the Games at Issue as of the effective
dates of the injunction set forth in paragraph 10 above and will not renew any
existing licenses for the Games at Issue.
13. Settling Defendants acknowledge and agree that the requirements in
Paragraphs 9 through 12 above are orders of the Court enforceable by contempt
and that this Stipulation and Consent Judgment may be specifically enforced by
injunction in addition to any other remedy that might be appropriate and that
breach of it by Settling Defendants would threaten Plaintiffs with immediate and
irreparable harm.
14. Simultaneous with the execution of this Stipulation and Consent
Judgment, and as a condition of its enforceability against Plaintiffs, Settling
Defendants will deliver to Hasbro Interactive, Inc. the amount set forth in
their Ancillary Settlement Agreement. The amount of this payment will be
confidential, as provided in and in accordance with the terms of the Ancillary
Settlement Agreement, except such disclosure as may be required pursuant to a
valid court order, in connection with the preparation of tax returns or
financial statements, the performing of any audits, disclosures required by the
securities laws (in the sole discretion of eGames' or Hasbro Interactive's
corporate counsel), including but not limited to, securities filings or reports,
or press releases or public statements relating to the effect of the settlement
payment on the earnings of eGames, or in connection with the enforcement of this
Stipulation and Consent Judgment.
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15. Subject to the obligations of this Stipulation and Consent Judgment,
Plaintiffs and their legal predecessors, successors, assigns, shareholders,
officers, directors, agents, parent companies, and affiliated companies hereby
release and forever discharge Settling Defendants, their legal predecessors,
successors, assigns, shareholders, officers, directors, employees, agents,
parent companies, and affiliated companies from all claims asserted in the
Amended Complaint in this action and in the letter dated October 8, 1999, from
Kim J. Landsman to eGames, Inc. (a copy of which is annexed as Exhibit A to the
Ancillary Settlement Agreement), and any other claims, counterclaims, demands
and actions of every kind against Settling Defendants that the Plaintiffs now
may have arising from or relating to the subject matter of the Amended Complaint
in this action, including but not limited to any other claims or counterclaims
that were brought or would have been compulsory counterclaims, up to the
effective dates of the injunction in paragraph 9 above that are set forth in
paragraph 10 above. Without purporting to completely define the scope of this
release, it is agreed and understood that this limited release does not cover
the promotion, advertising, marketing, shipment, or sale of any products
inconsistent with this Stipulation and Consent Judgment.
16. The limited release provided in Paragraph 15 above is exclusive to the
Settling Defendants released and releases no other person. It releases Defendant
eGames from liability for manufacture, marketing, advertisement, distribution,
shipment or sale of games developed by Xtreme Games LLC, but does not release
Xtreme Games LLC or anyone connected therewith from any liability. Nothing in
this Stipulation and Consent Judgment shall be deemed to have any effect on the
liability of or remedies recoverable against Xtreme Games LLC in the pending
litigation.
17. Settling Defendants and their legal predecessors, successors, assigns,
shareholders, officers, directors, agents, parent companies, and affiliated
companies hereby release and forever discharge Plaintiffs, their legal
predecessors, successors, assigns, shareholders, officers, directors, employees,
agents, parent companies, and affiliated companies from all counterclaims
asserted in this action, any claims asserted in the letter dated November 4,
1999, from Joseph J. Serritella to Kim J. Landsman (a copy of which is annexed
as Exhibit B to the Ancillary Settlement Agreement), and any other claims,
counterclaims, demands and actions related to the subject matter of the Amended
Complaint in this action, including but not limited to any claims or
counterclaims that were brought or would have been compulsory counterclaims
under Rule 13(a).
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18. Each party to this Stipulation and Consent Judgment covenants and
represents that it is fully authorized to enter into this Stipulation and
Consent Judgment and to carry out the obligations provided for herein and that
it has not assigned the rights to any matter enjoined or any claim released
herein.
19. This Stipulation and Consent Judgment shall be binding on and shall
inure to the benefit of Plaintiffs and Settling Defendants, their respective
parents, subsidiaries, affiliates, as well as their successors-in-interest and
assignees.
20. This Stipulation and Consent Judgment shall apply worldwide and be of
perpetual duration, except that the obligations of Paragraph 9(a) above will
terminate as to any specific game when the term of all relevant copyrights in
that game expires.
21. This Stipulation and Consent Judgment constitutes the final judgment in
this action as to the Settling Defendants. All counterclaims asserted herein are
hereby dismissed with prejudice, and all of Plaintiffs' claims against Settling
Defendants will be deemed merged into this Stipulation and Consent Judgment.
22. This Court retains jurisdiction over the parties and this action to
implement and enforce this Stipulation and Consent Judgment.
Dated: August 16, 2000
Daniel Lyne MURTHA CULLINA, ROCHE, CARENS
HANIFY & KING P.C. & DeGIACOMO
One Federal Street
(617) 423-0400
By: /s/ Howard J. Castleman
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Howard J. Castleman
99 High Street
- and - Boston, MA 02110
(617) 457-4130
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PATTERSON, BELKNAP, WEBB
& TYLER LLP
Attorneys for Defendants Webfoot
Technologies, Inc. and MVP Software
Inc.
By: /s/ Kim J. Landsman and
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Kim J.Landsman(admitted pro hac vice) Boyd A. Henderson
MILLER, JOHNSON, SNELL &
1133 Avenue of the Americas CUMMISKY, P.L.C.
New York, New York 10036-6710 250 Monroe Avenue NW, Suite 800
(212) 336-2000 Grand Rapids, Michigan 49501-0306
Attorneys for Plaintiffs (616) 831-1719
Of counsel as to MVP Software Inc.
McCAUSLAND, KEEN & BUCKMAN
By: /s/ Glenn S. Gitomer
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Glenn S. Gitomer (admitted pro hac
vice)
259 North Radnor-Chester Road,
Suite 160
Radnor, PA 19087
(610) 341-1020
-and-
Daniel J. Kelly
GADSBY & HANNAH LLP
225 Franklin Street
Boston, MA 02110-2811
(617) 345-7000
Attorneys for Defendant eGames, Inc.
So Ordered on August ___, 2000
Honorable Richard G. Stearns
United States District Judge
