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Default The Witcher 2 - Namco Bandai wins suit over X360 version

December 10th, 2011, 00:25
Edge Online reports Namco Bandai has won the suit over publishing rights for the X360 version of The Witcher 2. You may recall that CD Projekt announced THQ would publish the X360 version in several territories but Namco Bandai claimed a previous agreement. Seems the French court agreed with Namco:
The verdict requires that CD Projekt gives Namco Bandai a publishing agreement within 15 days, or face a fine of €15,000 for every day thereafter that it fails to do so. Speaking to Polish news site Parkiet, CD Projekt CEO Marcin Iwinski said he was "not satisfied" with the verdict but was relieved the dispute was over.
More information.
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December 10th, 2011, 00:25
How about Namco withholding about 1.5 million euros they owe CD Projekt for existing sales?

http://www.next-gen.biz/news/namco-s…-rights-report

I had always thought you weren't allowed to withhold agreed upon payments in a punitive manner. This sort of unilateral action when you believe the other party to be in breach (often referred to as "self-help") is generally looked upon by courts as very improper - particularly when the legitimacy of such payments is not primarily in question in the suit.

http://www.zarcolaw.com/news-articles-by-zesb-04.php

I know in the US at least (and I had thought also in the EU) that Namco Bandai's actions would have most likely placed them in breach as well; this sort of mutual breach most often results in a verdict which nullifies the agreement going forward and forces a settlement of payments due up to that point. This amount may have been reduced if the court decided that removing DRM and going with a different publisher for the subsequent Xbox version constituted damages being awarded, but that would have been predicated on the argument over whether the agreement covered the Xbox release. The back payments themselves are independant and their value is not arguable; they would also have easily be subject to fines and interest if it was found this action violated copyright and trademark protections. Because of its unlawful unilateral decision to withhold payments, Namco should have found itself being ordered to pay past-due revenue and found it without any claim of distribution rights going forward if the contract were dissolved.

If they continued to publish the game (it looks like they did) after stopping payment then this would have also put them in violation of fairly common interpretations of trademark and copyright law (in the US and elsewhere.) I had thought the protection offered to content owners against such real infringement involving profit on the part of the infringing party was actually quite strong too, please correct me if I am wrong.

I can certainly see why CD Projeckt and its partent company feel unsatisfied with decision. It seems to be a miscarriage of justice that Namco was allowed to get away with holding payment for use of their trademarked and copyrighted product prior to a judge's ruling and win such a one-sided verdict. If Namco had continued to pay the money for existing and continuing sales of the product, then I could more easily understand such a verdict in their favor. Law abiding plaintiffs in such cases are generally advised by their legal teams to continue paying but to make note on those payments that they were "made under protest." This establishes them as a good-faith actor as well as demonstrates that such payments do not constitute approval of the other party's behavior. In light of their actual behavior though I can not believe the court considered them to have been acting in good-faith at all.

Are French statute and EU commercial code written so differently and strongly in favor of the franchisee or large publisher over the actual content creator and intellectual property holder? I had thought this was not case.
Last edited by jhwisner; December 10th, 2011 at 00:44.
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December 10th, 2011, 01:34
Originally Posted by jhwisner View Post
Are French statute and EU commercial code written so differently and strongly in favor of the franchisee or large publisher over the actual content creator and intellectual property holder? I had thought this was not case.
I don't think that any country specific statutes or EU commercial code apply in this case. It's a simple matter of contractual statutes and if Namco Bandai reserved the right to withhold royalties under certain conditions and CD Projekt signed that contract then there's nothing that CDP could do about that.
We have contractual freedom in the EU -within the limitations of existing law, of course,- but I don't see which law Namco would violate by including a passage allowing them to withhold royalties if certain conditions (like a pending lawsuit) are met. That would seem like business as usual to me.

Also, if this is true (from your NextGen Biz link)…
Namco also claims CD Projekt Red broke a contract with the publisher by removing DRM from the PC version of the game without its permission. Explaining its reasoning at the time, CD Projekt stated: "DRM schemes do not support our philosophy."
… then that's very bold of CDP. They might as well just tell Namco directly to shove the contract up their ass.
It seems to me like CDP are not very adept at dealing with business relationships. Acting against contractual obligations because of a collision with their corporate philosophy is not very smart. Unless, of course, they just wanted to prove that they were incapable of actually reading what they signed before they signed it.

I know that CDP is generally considered as the "good guy" and I won't win any sympathy awards by saying this but I'm more and more getting the impression that there is a shady side to CDP when it comes to their dealings in business matters. The whole debacle around the console port of the first Witcher (which was cancelled) also appeared to be pretty strange with lots of conflicting statements from the parties involved.
I believe they'd be well advised to mature a little. Being the rebellious kid and yelling at publishers "lolz fuck u'n'ur contractz!!11" is going to get them some good laughs from the peanut gallery but whether it's going to get them very far in business seems questionable.
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December 10th, 2011, 03:03
Originally Posted by Moriendor View Post
I don't think that any country specific statutes or EU commercial code apply in this case. It's a simple matter of contractual statutes and if Namco Bandai reserved the right to withhold royalties under certain conditions and CD Projekt signed that contract then there's nothing that CDP could do about that.
We have contractual freedom in the EU -within the limitations of existing law, of course,- but I don't see which law Namco would violate by including a passage allowing them to withhold royalties if certain conditions (like a pending lawsuit) are met. That would seem like business as usual to me.
.
Commercial code and pertinent statutes are often quite relevent to these sorts of disputes - contracts often assert rights that go beyond what is spelled out in the law but they do not actually trump law and commercial code. That you can not trump commercial code in a general manner with contracts is pretty well established - in almost every matter except end user license agreements where some courts treat consumers as being lesser entities in this regard.

If they did reserve the right to with-hold payment under explicitly outlined circumstances, pending a hearing, then some courts might accept this I suppose. That would be unusual and would amount to a contract that effectively allowed one party to prejudicial find the other to be in breach enact a sort self-help remedy. That such specific conditions would be included or that both parties would agree to giving one party what ammounts to powers normally reserved by courts seems a bit unlikely. The specific circumstances would have to be detailed in the agreement though, as courts have (in the US and Europe) consistently ruled against the ability for one party to engage in self help even if they claimed such right in the original contract.

If they had agreed to a contract where the removal of DRM or offering of the Xbox license to another company were specifically enumerated as conditions of continued payment then they were idiots for doing so. Even that though is questionable as courts have generally ruled that even claiming such specific unilateral power to declare the other party to be in breach and take punitive measures is not defensible and does not excuse failure to continue to pay.

In general, if you take punitive measures against a content or service provider before a judicial order appproving such action pending a hearing, you are found to also be a bad-faith actor. In such cases both parties can be found in breach and, if you would have otherwise been found to be acting in good faith, this can only damage your chances to receive and scale of a net-favorable judgement.

Normally, continuing to pay but note that it is in pro-test until a court allows otherwise is the best strategy and avoids you incurring damages yourself. In the case of copyrighted and trademarked material, failure to pay while waiting for a court date puts you in jeopardy of statutory fines - these statutes can not be circumvented or nullified by contractual agreement but those agreements are subject to these statutes. This means that some statutes may allow for specific but limited redress to be included in contracts, but if they do not then claiming these rights does not make them exist.
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December 10th, 2011, 03:38
You are right about the ruling against self help but as far as I know this usually only applies to cases where the withholding party is in possession of and withholding the property of the other party. What we got here is a royalty claim based on a publishing agreement. Is it the "property" of CDP? No. It's just a claim that might be forfeiited or put on hold under certain circumstances.
The actual money that is being withheld is not their property either even if they have a claim in it. The property (rights) remain with Namco until the transaction has taken place. It's the abstraction principle of European law where we strictly differentiate between the (contractual or whatever) basis of a claim (= title) on the one hand and the actual act of disposal on the other (or "disposition and executory agreement" as another dictionary tells me).

That's why I don't think that the rulings on the prohibition of self help apply here. I really don't see what would legally prevent Namco and CDP from including a passage in the contract that grants Namco the right to withhold the royalty payments if certain conditions are met (followed by a bullet point list or an appendix to the contract that lists these conditions).
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December 10th, 2011, 05:33
Originally Posted by Moriendor View Post
Also, if this is true (from your NextGen Biz link)…

… then that's very bold of CDP. They might as well just tell Namco directly to shove the contract up their ass.
While CD Project lost the publishing case, they won the DRM struggle. The court saw no problem with CD Project removing the DRM.
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December 10th, 2011, 17:29
CDProjekt maybe was not supposed to remove DRM in retail copies so early. They might have come to agreement with Namco about removing DRM later and with Namco's permission. But when the reports of 30% slower performance + longer load times due to DRM surfaced, CD Projekt did well by their customers - they removed DRM immediately, Namco's permission be damned. That is to be applauded. Customers are so important to CDP that they are willing to break a freaking contract for them.

Anyway. CDP will probably never work with Namco again, which is a good thing. THQ seemed like much better alternative…I guess they will not publish xbox version, but they probably will publish the expansion or TW2.
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December 10th, 2011, 21:55
I hope that this will be a lesson for CD Projekt.

“ Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius – and a lot of courage – to move in the opposite direction.“ (E.F.Schumacher, Economist, Source)
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December 10th, 2011, 23:32
Originally Posted by Paul View Post
CDProjekt maybe was not supposed to remove DRM in retail copies so early. They might have come to agreement with Namco about removing DRM later and with Namco's permission. But when the reports of 30% slower performance + longer load times due to DRM surfaced, CD Projekt did well by their customers - they removed DRM immediately, Namco's permission be damned. That is to be applauded. Customers are so important to CDP that they are willing to break a freaking contract for them.

Anyway. CDP will probably never work with Namco again, which is a good thing. THQ seemed like much better alternative…I guess they will not publish xbox version, but they probably will publish the expansion or TW2.
Yeah the court actually sided with CD Projekt on removing the DRM - perhaps their obligation to provide a working product (more strongly and clearly spelled out under most EU nations' adoptions of their commercial code than in countries like the US) superseded any implied or explicit agreements regarding DRM with Ubi… I mean Namco.

Here's hoping the Xbox 360 release still does very well - not for Namco Bandai's sake but for the viability of CD Projeckt and their future endevours. I plan on picking up the Xbox 360 copy (my roommate will certainly want to play it and does not own a gaming pc). I'll do this partly because I liked the game so much, partly because Namco is not publishing in my region, and mostly because I want to support CD Projekt.
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December 11th, 2011, 14:16
I never read about this bullshit back when the first game was released. But then again it was only released on PC.

When I was a child, my speech, feelings, and thinking were all those of a child. Now that I'm a man, I have no more use for childish ways.
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