Wednesday, October 23, 2013

The Big Fish Smell Blood...

by SandWyrm


The Chapterhouse vs. Games Workshop case is getting interesting again. Settlement negotiations have broken down, GW's top lawyer has just left the company, and a new high-profile law firm is circling the case. All indications are that CH is intending to appeal, and turn this case into a landmark IP decision with broad-reaching effects on more than just our little hobby industry.

If you recall, the jury verdict came last July. Where roughly 2/3rds of GW's IP infringement claims against Chapterhouse were thrown out. For the remaining 1/3 of GW's claims, Chapterhouse was ordered to pay a pretty paltry (given the money spent by both sides on the case) $20,000 in damages.

This decision was seen by most as a slap in the face to GW. Technically, they won the case. But in the process they arguably lost more in terms of IP protection than they managed to preserve. Plus Chapterhouse was still in business, and they'd been represented pro bono (free), while GW supposedly racked up northwards of $1M in legal fees.

Fast-forward a couple of months, and word is that GW and CH are having trouble agreeing on the details of the final settlement.


Then Gill Stevenson, GW's head of their legal department, left their employment at the beginning of this month after 14 years with the company. Not quite two months after 'winning' the big case. Interesting...

Then, in the back-and-forth of the recent court briefing, Chapterhouse announces that it has added some new lawyers to its team. Who all belong to a very BIG legal firm...


WilmerHale is the very same firm that represented Apple in the recent Apple vs. Samsung IP infringement cases. The sharks don't get much bigger (or more expensive) than that. But now they're doing pro bono (free) work for Chapterhouse? This is like Michael Jordan showing up at a high school basketball game to 'help out'. For free.


So What's This Add Up To?

Chapterhouse has already 'won' the case in every important sense. The judgement against them was tiny, most of GW's allegations were overturned, and we all now have a much clearer idea of where the legal lines lie in regards to GW's IP. In that sense, CH should just pay its $20K penalty and move on. That's what would make the most sense for them as a business.

But Chapterhouse was only able to defend itself in this case because it was able to secure free legal representation through the help of the Electronic Frontier Foundation and its partner firms. This help was available because the ELF has certain political goals in regards to IP law, and they saw the case as an opportunity to advance that agenda. Much as an organization like the NRA or the ACLU will lend their support to cases they believe in. With the goal of winning important legal precedents that favor the activities of their members.

Well... now it's time to pay the angels their due...

As such, the ELF and its partner firms are settling in for round two, with the goal of making an example of GW. To exactly what end isn't clear yet, but they obviously have goals that go well beyond the comparatively tiny niche of miniature wargaming, and they think they can win this case completely. The higher they can take the fight, the better. My bet is that they want to help set up some favorable legal precedents in advance of the future legal fights over 3D printing.

In that sense, GW has stumbled drunkenly into a bear trap.

In many ways, they're the perfect target for some big fish with a political agenda. They're not just overreaching and vexatious in their IP 'defense'; but they're ignorantly stubborn and self-righteous to boot.

I personally suspect (without any evidence whatsoever) that, when this case started, Stevenson told them that they would do more damage to themselves than to Chapterhouse. But was overruled by Tom Kirby (GW CEO) and told to pursue it anyway. So GW did. Stupidly and sloppily. Attempting to assert the un-assertable and patch over years of sloppy IP management in some underhanded ways.

Then, post-decision, Stevenson saw the sharks moving in, told management to settle with CH quick before it escalated further, and was ignored. Not wanting to have her name on the wrong side of a landmark IP verdict, she then bailed.

Regardless of the true story though, the sharks are circling; and GW management will probably ride this thing to the bitter end, just as the big fish want. It's kind of like watching a zombie wander into a field of landmines. I don't like zombies much, but... Well, it's still kind of pathetic to watch.

11 comments:

  1. I'm not an IP attorney, so I don't speak from any sort of deep knowledge, but the territory that GW has (attempted) to mark out as it's IP is incredibly expansive (i.e. the phrase Space Marine). That kind of overreach makes them very low hanging fruit for anyone who wants to establish precedent about what the boundaries of IP exactly are.

    Keep in mind that much of what GW tries to do in the CH case was claim not that it owned an image, or a character, or a design, but that it owned a whole raft of concepts and ideas. To the extent of claiming, basically, "GW owns big shoulder pads". After Star Wars came out Lucas tried to claim similar boundaries for his IP by suing, amongst others, Battlestar Galatica. Of course, broad IP claims don't work, at least in the US.

    I've never understood what GW was trying to do with its copyright claims. Certainly a company should defend it's IP, but attacking people making compatible parts and fan websites makes no sense.

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  2. The lawyer could have done the opposite as you described and told GW that it was a slam dunk and they would shut down CH just like everyone else with their overly broad claims.

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    Replies
    1. Very true. But I prefer to think that there was at least one voice of reason within the company.

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  3. I wonder how much money Chapterhouse snatched outta GW's pockets overall?
    Enough to warrant the legal fees GW will end up forking over for this massive, massive failure?
    And all because CH was making some aftermarket shoulderpads for lil' man dollies?
    Sigh.
    If I'm not mistaken, CH is like a one-man operation without even a brick and mortar address, correct? Just some guy with a knack for sculpting who probably did this more out of love for the hobby than having any designs on fame and fortune.
    GW probably thought CH would comply with the cease & desist, and when that didn't happen GW went and got all 'Emperor Palpatine.'
    Isn't it ironic?
    Don't ya think?
    It's like raaaaaAAAIIIIiin on yer wedding day....
    ...ok I'll stop singing Alanis Morrisette now...

    I swear, watching GW perform faceplant after faceplant just keeps getting funnier. And it wasn't NEARLY as funny when I actually owned GW stuffs, played GW games, but NOW...
    Ermahgerd it's so funny.
    :)

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    Replies
    1. Well the case had ramifications beyond CH for GW too. They clearly hoped to create a chilling effect.

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    2. Yeah, CH is literally a garage operation. With, IIRC, around $60-75K in sales over the 2 years prior to the case. So GW was overspending in order to try and make an example of them.

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  4. Yawn. This stuff is more boring than a business trip to Greensburg, Indiana.

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  5. GW subscribes to the Darth Vader school of management. Someone had to pay for this failure. And you know, it obviously can't be the decision makers who are actually responsible for overall cooperate conduct.

    When this whole thing started I was in GW's camp on this. Though, honestly, my opinion was effected by the culture of permissibly established by GW over the years. There was a way you did things, and way you didn't Chapters House did it the wrong way. GW lost this not only in the courts but in the heart's and minds of the community. When we actually saw them enumerate what they thought they owned, it was ridiculous. GW's claims to the community have forever lost the benefit of the doubt.

    Unless you are one of the 5 or 6 GW white knights left on Dakka. Man those guys are filled to the brim with the insane troll logic.

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