Harmonix sues Activision - then withdraws lawsuit

Harmonix sues Activision - then withdraws lawsuit
Michael French

By Michael French

March 12th 2008 at 12:30PM

MTV-owned studio which created Guitar Hero files for unpaid $14.5m royalty statement, then cancels action

Variety reports that Harmonix has filed a law suit against Activision alleging unpaid royalties - but has promptly withdrawn the action.

The dispute claimed that Harmonix, which created the Guitar Hero franchise for Red Octane which was acquired by Activision in 2006, was owed $14.5m from any sequel which "incorporates, uses, or is derived from Harmonix property."

The two have a deal in place which means Harmonix is paid two possible rates - a higher one for works derived from Harmonix-made games, or a lower one for games that don't use the studio's work.

Activision has reportedly been claiming that Guitar Hero III, developed by its internal Neversoft team, was built from scratch and isn't derived from Guitar Hero and Guitar Hero II - meaning it pays at the lower rate. Harmonix said otherwise, and calculated the $14.5m disparity between what it was paid and what it was owed.

"[Activision] has failed to pay Harmonix its full share of royalties earned in connection with Harmonix's essential and undisputed contributions of its intellectual property and technology to the bestselling video game Guitar Hero III," the lawsuit asserts.

"Activision believes that it has made sufficient payments to Harmonix and the claims otherwise do not have merit," a rep told Variety, but the publisher has entered into discussions with the studio - hence why the suit has now been withdrawn.