Videogame publisher says duo breached contract

Activision filed a countersuit against two of its senior executives responsible for the “Call of Duty: Modern Warfare 2″ game, claiming that they undermined the company by threatening to poach employees and delaying development of sequels.

Jason West and Vince Zampella, executives in Activision’s Infinity Ward unit, filed suit against Activision last month, seeking more than $36 million, after they were fired for insubordination. They claimed that the company’s motive was to avoid paying them royalties for their work on the franchise.

Their former employer, in a suit filed on Thursday in Los Angeles Superior Court, says the duo “morphed from valued, responsible executives into insubordinate and self-serving schemers who attempted to hijack Activision’s assets for their own personal gain and whose actions threatened both the future of the ‘Call of Duty’ franchise and the future of Activision’s IW studio.”

Infinity Ward made last year’s “Call of Duty: Modern Warfare 2,” one of the industry’s top selling games of all time. The IW studio was formed by West, Zampella and others, but Activision bought it in 2003 and signed the two to exclusive contracts.

Activision paints a portrait of two disloyal employees who attempted to “steal” the Infinity Ward studio, even to the point of trying to block employees in the unit from obtaining bonuses or significant equity grants so they would have an easier time of poaching them once they were off on their own. Activision claims that they kept “millions of dollars of discrentionary compensation” for themselves instead of distributing it to other employees of the IW studio.

Among other things, Activision’s suit claims that West and Zampella held future editions of the “Call of Duty” franchise “hostage” unless Activision “acceded to their demands.” The company also charged that they embarked on a “secret trip” by private jet to Northern California, arranged by their agent, to meet with executives with Activision’s closest competitor, although that company was not named in the suit. It is believed to be Electronic Arts. The suit quotes from e-mail exchanges between the two execs, which Activision claims is proof that they were trying to “covertly copy certain materials” and “keep their actions hidden.”

Activision’s suit seeks damages including back pay and certain equity stakes, as well as declarations prohibiting them from trying to poach company employees. They also seek an injunction preventing them from using company secrets to develop new games.

West and Zampella’s attorney, Robert Schwartz, called Activision’s allegations “false and outrageous” and challenged the notion that they conspired to spin off Infinity Ward.

“Activision itself proposed spinning off Infinity Ward when, last year, it sought to renegotiate Jason and Vince’s contract to induce them to forego developing a new game in favor of doing another Modern Warfare sequel,” he said.

Moreover, he said that they hired CAA to advise them in their negotiations with Activision, “not to breach their contract.”

“This is just an Activision tactic to avoid paying Jason and Vince and everyone else at Infinity Ward the millions of dollars they all earned and that Activison owes them,” he said.

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