Tesseraction Games secures legal victory against GMX Media

Oregon-based videogames developer, Tesseraction Games, has been awarded a summary judgement in its long-standing legal battle against former publisher GMX Media.

Tesseraction filed a lawsuit against GMX Media in late 2003 relating to the distribution agreement for Enigma: Rising Tide, accusing the publisher of a number of serious breaches of contract. The lawsuit alleges that GMX Media failed to produce timely and accurate sales and royalty accounts, failed to pay royalties from sales and interest on delayed royalties, distributed the title in countries outside of those defined in the agreement, and distributed the title in packaging that was not approved by Tesseraction, contained altered text and omitted vital game support information.

The legal battle has been complicated by jurisdiction issues as the intellectual property at the centre of the dispute originated in Oregon, but GMX Media is a UK-registered company. Details posted on the Tesseraction Games website state that the lawsuit includes additional corporate and individual defendants dismissed for venue in the US Federal Court. The dismissed portions are currently being re-filed in the UK.

Whilst the full settlement figure for the lawsuit has yet to be determined, Tesseraction's initial filing amounted to damages of not less than USD 1.6 million, representing the minimum amount guaranteed under the terms of the distribution agreement. Additional lost revenues, interest and a further sum to account for loss of goodwill and negative impact on relationships with distributors, wholesalers, retailers and customers is yet to be determined.

Tesseraction expects the summary judgement to be awarded before the end of the current quarter, and has posted a somewhat bullish statement on its website following the initial victory, claiming "developers need to stop being willing to roll over when their rights are being violated by publishers."