Leading video game developer and distributor Electronic Arts is having its royalty management protocols called into question after a former employee came forward to demand significant financial damages for alleged misappropriation of programming code.
The plaintiff parted ways with the company in 1992, according to Bloomberg, but the code he wrote for the original version of EA's flagship Madden NFL video game may have stayed at the heart of the multi-billion-dollar business that has since emerged. As a result, the former employee is demanding a 7 percent royalty rate be retroactively applied to the associated sales EA derived during that time.
The company contends that the plaintiff holds no claim to any outstanding licensing fees, however, as the team it retained went in a new creative direction following his departure. Also at issue, according to Bloomberg, is the fact that the statute of limitations for filing such lawsuits may have already elapsed - significantly restricting the scope of any liabilities that could be found in sequential litigation.
EA is well-versed in royalty management issues, but more frequently the disputes arise from third-party associates. Last month, a federal appeals court awarded damages to a former college athlete who suggested that his unlicensed likeness was used in an EA game without consent.