Activision Sued by Scratch DJ Game, Accused of 'Sabotage'

Representatives for Scratch DJ Game (a joint venture between Genius Products and Numark Industries) announced today that they've filed a lawsuit against Activision Publishing and California 7 Studios and its CEO, Lewis Peterson. The legal action, filed in the State Court of California, alleges that Activision "has engaged in intentional interference with contract, breach of contract, conversion and misappropriation of trade secrets obtained from Genius to purchase 7 Studios, which is under contract to develop the much anticipated new Hip Hop video game, Scratch: The Ultimate DJ."

The suit also accuses Activision and 7 Studios of conspiring to withhold the current version of Scratch "in an effort to delay the development and release of Scratch and to gain access to proprietary technology." Essentially, Scratch DJ Game believes Activision is deliberately sabotaging the game's release so it doesn't take away from the launch of DJ Hero. Scratch DJ Game is seeking "substantial damages" and requesting the court to order the game's immediate return, and other injunctive relief.

The company further explained: "Prior to undertaking these wrongful actions, Activision approached Genius with an offer to acquire Scratch. The offer was rejected. It is alleged that Activision then commenced the process of acquiring Genius' contract developer, 7 Studios, while under a non-disclosure and confidentiality agreement with Genius. It is also alleged that after Activision acquired 7 Studios, the two companies began conspiring to prevent Scratch from getting to market on a timely basis by withholding work product, code and the proprietary game controller."

"We believe that Activision realizes the tremendous opportunity that our game, Scratch, represents to the video game industry, the retail marketplace and the consumer. After demonstrating our game, pursuant to the confidentiality agreement with Activision, we believe Activision concluded that Scratch: the Ultimate DJ is a superior offering to their prospective game, DJ Hero," commented Trevor Drinkwater, President and CEO of Genius Products, Inc. "We believe that Activision and 7 Studios have improperly used confidential information obtained from Genius and 7 Studios to interfere with our efforts to complete the game. In short, we believe that Activision is attempting to sabotage the release of our much anticipated game and prevent it from getting to market prior to the release of DJ Hero."

Jack O'Donnell, Chief Executive Officer of Numark, added, "We also firmly believe the recent actions by 7 Studios are an obvious breach of the development agreement and we look forward to receiving our work product and property back, and completing and successfully launching our game on schedule."

Activision has yet to comment on the legal proceedings.