TimeGate Studios, Inc. v. Southpeak Interactive, L.L.C., et al, No. 12-20256 (5th Cir. 2013)Annotate this Case
This dispute arose out of a video game publishing agreement entered into by Timegate and Gamecock. Under the terms of the agreement, Timegate was to be the developer and Gamecock was to be the publisher of a futuristic military-style video game entitled "Section 8." When their business relationship deteriorated, the parties proceeded with arbitration and the arbitrator awarded Gamecock monetary compensation and a perpetual license in the video game's intellectual property. The district court vacated the arbitrator's award, determining that the perpetual license was not consistent with the "essence" of the underlying contract. Because the agreement bestowed broad remedial powers upon the arbitrator and because it was fraudulently induced and irreversibly violated by Timegate, the perpetual license was a rational and permissible attempt to compensate Gamecock and maintain the agreement's essence. Accordingly, the court reversed and remanded, finding that the perpetual license was a remedy that furthered the essence of the publishing agreement.