LEGALWATCH: Games Workshop vs Chapterhouse Trial So Far

GW vs Chapterhouse have been before a jury in open court for week.  Let’s bring you up to speed.

First the Basics:

Games Workshop vs Chapterhouse

U. S. District Court
219 S. Dearborn St., Chicago, IL 60604
Tel: 312-435-5684

Judge Matthew F. Kennelly – Courtroom 2103

The Court sets aside the following dates for trial in this case:

June 3, 2013 (a.m. session – jury selection; p.m. session – trial), 
June 4-7, 2013, June 10-11, 2013, and, if needed for closing arguments, the morning of June 12, 2013.

The First week.

Both sides have been at it for a week, and the major witnesses on both sides of the case have been examined and cross examined before the jury.  Here is a quick summary of some of this week’s highlights:

Testomony was heard from:
-Alan Merrett (GW head of IP)
-Andy Jones (GW Head of Licensing/Legal)
-Gil Steveson (GW Chief Council)

-Nick Valluci (Owner of CHS)
Alan Merrett Testimony:

Mr. Merrett’s testimony was lengthy, initially focused on explaining Games Workshop’s business to the jury. Some highlights from his testimony:

-A Realm of Battle board was pulled out to show the jury to help explain what wargaming is.

-Games Workshop was described as being producers of “Toy Soldiers” and their game systems as being “infinitely customizable”.

-Mr. Merrett described Games Day to the jury as a Games Workshop event that allowed customers to perform their “favorite hobby activity; buying things from Games Workshop”.

-It was explained that Games workshop uses no traditional advertising outside of word of mouth and social media based online communications. Customers could simply google for their products and find thriving communities of eager fans on websites such as “Dakka Dakka and Bell of Lost Souls”.

-Warhammer 40,000 was described to the jury as “Warhammer Fantasy in space”, along with describing the Eldar as “Space Elfs”, along with other “space” factions such as “Space Orcs”.

-The Dark Eldar were described as “spikey, evil, and every other evil cliche”.

-The Tau were described as “modern sci-fi; more traditional sci-fi” in appearance, as opposed to the archaic aesthetic of the other ranges.

Merrett outlined a general summary of GW’s point of view with several points:

– GW takes pride in the “quality and originality” of their products. They do not like when any other company makes miniatures that are based on their own product line, viewing many of these to be of inferior quality. Me mentioned the aftermarket for add-ons “makes us jolly-cross indeed”

Andy Jones Testimony:

Jones laid out many GW points points involving both licensing and financials under questioning:

-GW latest annual numbers reflect revenue of $54 million USD in North American sales. 50% of that was 40K, the other 50% all other GW products sales combined.

-GW was described as having licensing agreements with “big companies”, and there is a concern that any such “big companies” would be upset by perceived theft of GW IP.

-GW is concerned that the poor quality of CHS products will rub off or bring down the percieved quality of the GW line in the eyes of licensees. 

-GW feels that they should get to decide when a product they invent in print and illustration gets to come to market in the form of a physical miniature. When a company such as CHS introduces a competing miniature that was previously unreleased into the market ahead of GW, they consider this this “poisoning the well”. Other companies such Kromlech, Maxmini, Scibor, Hitech were listed by name as being examples this concept.

-GW considers the following naming schemes to be acceptable for the aftermarket, applying to all products that interact with their own 40K products:
PRODUCT NAME: “compatible with 28mm science fiction miniatures”
PRODUCT DESCRIPTION: “compatable with Games Workshop [insert exact GW kit title]”

-Jones said “anytime CHS made money, that was money GW should have made” 

-GW Legal has an “IP Protection Group” which investigates allegations of IP infringement and decides whether/how to proceed. They are usually first alerted to alleged IP infringement by GW customers who they consider to be “our first line of defense as it were”. 

-GW has 200+ casefiles on organizations and individuals it is investigating for potential legal action against. 

Nick Valluci Testmony
-Mr Valluci was examined by GW council vigorously.

-CHS disclosed that its total gross revenue before expenses for a roughly 4 year period in question was @$400,000.
-Valluci took home $3000 a month from CHS, while his overseas partner took home $2000 per month.

Evidence Brought Before the Jury:

The following game product was entered into evidence by the Judge over objections from GW council:

The Road Ahead
Both sides have only today to call final witnesses, and rest their cases before closing arguments tomorrow.  Then it’s up to twelve jurors to decide.

GW vs CHS Case
BoLS Lounge

~We will be reporting on the trial’s verdict and aftermath in the days ahead.  Have at it folks.

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