GW vs Chapterhouse

[Heisler]

I thought that this was of enough interest that it shouldn't be buried in the other GW thread. I literally just copied this from a post on Bell of Lost Souls. You can find the original post here: http://www.lounge.belloflostsouls.net/showthread.php?33351-LEGALWATCH-Games-Workshop-vs-Chapterhouse-Verdict

 

LEGALWATCH: Games Workshop vs Chapterhouse Verdict

We have a verdict!

Some initial notes:
This is a Jury Verdict, and has not yet become a Final Judgement

Breaking down the counts along the different categories we have:

Copyright Claims
160 claims alleged against CHS
-GW won on 1/3 of the claims, including items such as CHS' Powerfists
-CHS won on 2/3 of the claims, including the use of the underlying shape and size of GW Shoulderpads.

General Trademark Claims
9 claims alleged against CHS
-CHS won all 9 claims, including either no infringement, or fair use of the GW trademarks on CHS' website.

Disputed Trademark Claims
21 disputed trademark claims alleged against CHS
CHS won 11 claims
GW won 10 claims

GW Trademarks ruled "Previously Used in Commerce" Claims
61 claims alleged against CHS
CHS won 35 claims
GW won 27

Notable Trends and Individual Products Under Dispute
CHS lost on some individual products including:
-Doomseer
-Dark Elf Arch Tortress

CHS won on some individual products including:
-Jetbike
-Super-heavy walker model
-Lizard Ogre

Damages Awarded:
CHS ordered to pay GW damages of $25,000 USD

Both sides may appeal the ruling.

Thoughts and Implications:
It's looking like however CHS as an entity comes out of this ruling, the implications for the 3rd party industry are profound.

-The ruling of no infringement for the use of the underlying shape and size of GW shoulderpads is now on the legal record.
-Possibly more important is not guilty verdicts on the use of GW trademarks and terms on the CHS website.
-While certain CHS products themselves may disappear from the Earth in the aftermath of this case, it looks like the verdict may have provided a clear blueprint for the 3rd party accessory bits market. One that allows legal use of certain GW trademarks and terms in a way that goes way beyond what Nottingham themselves ever wished to allow.

More details as we get it... Documents will be coming in time.

UPDATE 6/17/2013

Winston & Strawn LLP issue a press release on the case:

June 17, 2013

Winston & Strawn Defeats Hundreds of Trademark and Copyright Infringement Claims on Behalf of Pro Bono Client

Cutting-Edge Decision Protects Industries from Litigation Blocking Add-On Products

CHICAGO, IL – In a classic David-versus-Goliath battle, Winston & Strawn LLP represented Chapterhouse Studios LLC on a pro bono basis in a cutting-edge federal trademark and copyright dispute in the Northern District of Illinois (Games Workshop Limited v. Chapterhouse Studios LLC 1:10-cv-8103). The verdict of this jury trial, held in June 2013 before Judge Matthew Kennelly, confirms that copyright and trademark law should not be used to block add-on products. Winston & Strawn has litigated the case since 2010, and co-counsel law firm Marshall Gerstein joined the matter in 2012.

“This was a classic case of trademark and copyright bullying by a much bigger Plaintiff,” said Jennifer Golinveaux, partner in Winston & Strawn’s San Francisco office. “I am proud of the investment made by the firm, and the many attorneys who devoted themselves to making sure the intellectual property laws were not misused to squash a much smaller player.”

Games Workshop manufactures Warhammer 40,000, a tabletop battle game that works with armies of miniature figures and vehicles, while Chapterhouse sells customized add-on parts for the figures and vehicles used in the game. The United Kingdom-based Games Workshop, a company with $200 million per year in revenues, alleged more than 200 claims of copyright and trademark infringement against Chapterhouse, a small business run out of an individual’s garage in Texas. Games Workshop argued that it was seeking a complete shutdown of Chapterhouse’s entire business and although Games Workshop initially sought over $400,000 in damages, by the end of the two-week jury trial, the plaintiff dropped its damages demand to only $25,000.

The jury deliberated for more than two days and found that Chapterhouse could continue to make and sell over a hundred products without fear of copyright infringement. The jury also confirmed that Chapterhouse could continue to use most of Games Workshop’s asserted trademarks when selling compatible parts, including all nine of Games Workshop’s registered trademarks. Together with the summary judgment wins, the jury’s verdict confirmed Chapterhouse can continue to make and sell 111 products that Games Workshop hoped to block using copyright laws, and can continue to use 104 words and phrases that Games Workshop said were trademarked.

Imron Aly, lead trial attorney and partner in Winston & Strawn’s Chicago office added, “It was a pleasure to represent a small entrepreneur like Nicholas Villacci of Chapterhouse, who has a passion for his work and wanted to see his business survive.”

Julianne Hartzell, partner at co-counsel law firm Marshall Gerstein added, “We are proud that we were able to help protect Chapterhouse against the overreaching claims made by Games Workshop in such a substantial trademark and copyright dispute.”

 

[CashWiley]

In a way I was hoping the court would uphold all GW's claims, speeding their demise. Instead the 3rd party sites will flourish and more people will play 40k, extending the dominance of crappy proportions and bad scale!

[TaleSpinner]

Yeah, but this is a great thing for everyone, as it creates precedence not only for GW, but also will make Hasbro stop and think before burying the little guys in the hobby.

Edited June 18, 2013 by TaleSpinner

[buglips*the*goblin]

Precedent counts. In the infringement threads a while ago I tended to side with the "big guys" mostly because the "little guy" claims given then were, I believe, pretty silly. I always like to see precedent and definition narrowed down in the cauldron of legal wrangling, each case helps refine the application of the law.

 

And this one looks like it came out fair - each side won some and lost some. It also proves that while a big player may try to make a case - they don't always have one. The courts do not favour either party.

[psyberwolfe1]

This was a really great verdict. GW could appeal but it would burn what little customer goodwill they may have left. Their current price hikes and obscene pricing stinks of a sell off. This case was a glorious win and tells GW their days of bullying have come to an end.

[Doug Sundseth]

This was a really great verdict. GW could appeal but it would burn what little customer goodwill they may have left. Their current price hikes and obscene pricing stinks of a sell off. This case was a glorious win and tells GW their days of bullying have come to an end.

 

Nice thought, but the question I have is how much did Chapterhouse have to pay their lawyers to get this result? If the number is large enough (and that's the way to bet, IMO), that acts to chill smaller companies' attempts to get into the same market.

 

Yes, you can win a case against Hasbro or GW or Paramount. Can you win the case and stay in business at the same time?

[KevinR]

The key phrase in the press release quoted above is "pro bono". The $25,000 damages would kill many small businesses, but those damages on top of having to pay for lawyers would make any defense untenable.

Edited June 18, 2013 by KevinR

[fanguad]

Winston & Strawn Defeats Hundreds of Trademark and Copyright Infringement Claims on Behalf of Pro Bono Client

Edit: Ninja'd

Edited June 18, 2013 by fanguad

[Pingo]

I'm still puzzled over Games Workshop's Alan Merrett's testimony.

 

-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".

Surely the favorite hobby activity of tabletop gamers is gaming.

[Heisler]

I'm still puzzled over Games Workshop's Alan Merrett's testimony.

 

-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".

Surely the favorite hobby activity of tabletop gamers is gaming.

 

Not from the Games Workshop point of view. They are the hobby!

 

Taken on pro bono so no legal fees for Chapterhouse. I'm sure its a big feather in the cap for the lawyers so they are padding their resumes with a victory

Edited June 18, 2013 by Heisler

[ShadowRaven]

yeah. It is a major coup for the lawyers. "we took on a giant of a corporation and won" is a great selling point in the future.

[Nocturne]

I'm still puzzled over Games Workshop's Alan Merrett's testimony.

 

-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".

Surely the favorite hobby activity of tabletop gamers is gaming.

 

 

You've clearly never seen the queue for the sales section at Games Day, waiting time is usually upwards of an hour to get in to the sales area. But more importanlty, that's not a court transcipt so I would be cautious about quoting that statement as read, it may not have been accurately presented. It could easily be two seperate statements about what people can do at Games Day for a start.

Edited June 18, 2013 by Nocturne

[Doug Sundseth]

Missed the pro bono comment. But prospective legal fees wil still act to chill other companies. Chapterhouse got pro bono legal help; how many other companies could expect to receive a donation worth (probably) hundreds of thousands of dollars?

 

(Good for Winston & Strawn, though.)

[Heisler]

That's an excellent observation. I doubt that the chapterhouse lawyers are going to want to take any other copyright or trademark cases pro bono. They did this in the anticipation of their services being in demand.

[MonkeySloth]

From what I've read elsewhere the ruling made sense.

 

GW cannot prevent 3rd parties from making bits but 3rd parties can't blatantly rip off designs from GW's books.