As I wrote in the preface to my last essay on D&D history ... no matter how many times I post about history or point people to resources or remind them not to play bards, I have to occasionally repeat what I have said before (or say it a different way) because, like Sisyphus, I think that this time I'll get the rock over that hill.
....But this time it will be different, right? RIGHT?
sigh... no, no it won't.
But as they say, futility is the mother ofapathy all internet conversations, so why not? I realized the other day that I often refer to the fact that we now know a lot more about the Arneson v. TSR litigation, and for that reason, we should avoid making hyperbolic claims about it that are demonstrably untrue. And yet, people reflexively feel the need to make statements that Arneson "won" his case against TSR, or that a Court found that he was screwed out of royalties, or a number of other statements that aren't factually accurate, no matter how truth-like they might feel to our animal passions. So I thought I'd write a relatively brief (for me) essay about two things- first, what were the actual historical facts regarding the Arneson / TSR litigation? Second, what do I think about those facts, based upon my knowledge of that litigation, litigation in general, and the history as I understand it?
Unfortunately, given that this is a completely uncontroversial topic that people will certainly read thoroughly before typing replies about how angered their blood is, I am going to make the following notes and disclaimers.
A. Disclaimers, Notes, Sources, and Things I'd Like You to Pretend You Looked at Before Responding.
1. I am not discussing who "created" D&D. This is about a specific lawsuit. As you will read, the lawsuit also wasn't about who created D&D. If you want to say it was all Arneson, or all Gygax, or both of them merely borrowed from others (Wesley, Patt, etc.) feel free. If you want to argue that we over-value specific people in history, and that RPGs were inevitable for the time, that's cool too. Again, this isn't about who created D&D or should be given credit for it.
2. If you want to independently source the factual section (B), please read Game Wizards first. If you're lazy, you can start on page 151. But it would be hard to understand what you're reading if you didn't read the 150 pages before that. Also, I am going to say that if you are really interested in history, you'd be better off reading the books and/or looking at sources than arguing with someone who is trying to provide that information on the internet, but I'm not the boss of you. Please, though, if you don't have the book, buy it and support your local bookseller.
3. Section B will be (as much as I can) limited to discussion the actual facts and dates and documents. Section C will be what I think can be reasonably inferred. If you want to argue with something in Section B, please provide a source so I can verify what you are saying and correct it. If you want to argue with Section C, well, that's just like ... your opinion, man.
B. A VERY BRIEF Factual Recounting of the Arneson Lawsuit
i. The Arneson Contract, and TSR Royalties
The first contract between Arneson and TSR (in the original incarnation as a partnership) was executed January 4, 1974. It was an assignment of copyright and other rights by Arneson and Gygax to TSR for "the set of games rules to be entitled Dungeons and Dragons as booklets ..." Gygax and Arneson would split a 20% royalty on the sales price (10% each).
On April 7,1975, the first contract was superseded by a new agreement (hereafter, the "Contract"). The royalty rate was cut to 10% total (5% each), but it was now based on the cover price, not the sales price, of the booklets. While this looks like a haircut, in practice it was slightly better for the both Gygax and Arneson- if there was a sticker price of $20, then every copy sold now provided $1 in royalties each to Gygax and Arneson. Previously, if the booklets (the "LBBs" or Little Brown Books that formed the core rules of OD&D) were sold at a discount, the prior contract meant that the royalties would be paid on the discounted price which was often somewhat less than half the sticker price.
At the time of the Contract, the general understanding in the wargaming industry (which was mostly a hobbyist venture) was that royalty agreements were specific to products- you make a product, and the publisher pays you a royalty for that product. So if you made "Flumphs' Campaign for North Africa," you would get the royalties for the sales of that product. If someone else wrote rules, say, "Expansion Rules for Flumphs Fighting in Eritrea" then that other person would get the royalties for that product. This model was followed by TSR- when the Greyhawk supplement came out, it was governed by a royalty agreement between TSR, Gygax, and Rob Kuntz. When it came to the Blackmoor supplement, Arneson would receive a separate royalty for the new product (he ended up negotiating for shares of TSR instead of receiving a royalty).
...but then came Dr. Holmes.
ii. How Holmes Basic Led to the Arneson Lawsuit
I am going to elide over a lot of the details here- suffice to say that Arneson was not an easy individual to work with (as shown repeatedly through the 1970s) and things soured quickly between Arneson and TSR. He was fired, he groused about receiving shares instead of royalties on Blackmoor (to which he was told that it was more than fair, given he barely wrote any of it ... which may be true, but did not improve relations), and so on. But after Arneson left TSR, and as he continued to face financial issues afterwards, he became increasingly interested in ... his royalties.
Everything started with a letter sent by Arneson (and either ghostwritten or with a large amount of assistance from Dave Megarry) in April 1977, asking questions about his royalties, requesting a full accounting, and finally stating that he wanted to know about rumors of the "rules known as Dungeons & Dragons" being rewritten be new people. Of course, Arneson knew that these weren't rumors, and work had already begun on the Holmes version of OD&D, aka Holmes Basic. The original drafts of Holmes Basic listed the authors as Dr. Eric Holmes and Gygax, and did not mention Arneson. Moreover, TSR was also beginning the process of a complete redesign of D&D- what would become known as AD&D at the time, and what we now call 1e.
Now, when Holmes Basic was officially released, it credited Arneson and Gygax as the authors, and Holmes as the editor. In November 1977, Arneson visited Lake Geneva (HQ of TSR) accompanied by an attorney, asking for an accounting of his royalties. He met with Brian Blume, who broke down what Arneson received. And Arneson was receiving the royalties due ... except there was a twist. He received 5% from sales of the original rules, but only 2.5% from Holmes Basic. TSR's reasoning was that Holmes Basic wasn't just the rules, but was a boxed set that included other items (dungeon geomorphs, dice, Monster & Treasure assortment). Holmes Basic cost $10, the other items separately would be $6.50, so Blume explained that, in TSR's view, they were doing Arneson right by valuing the rules themselves as $5.
Before you reflexively take one position or another on the "rightness" or "wrongness" of either side on that- Holmes Basic did include other products. And the Dungeon Geomorphs (for example) were sold before Holmes Basic as a separate product, and Arneson did not demand royalties from it and had no part in creating them. While arguments can be made about the correct value of components, and an attorney will always tell you that it is better to ask for permission first than to beg forgiveness later, TSR's position that Arneson shouldn't receive a windfall by adding products that he had no right to receive royalties on isn't unsound. Arneson did not receive royalties on dice (not previously included with D&D), the additional M&T assortment, or the dungeon geomorphs.
But in January, 1978, Arneson's counsel set a letter to TSR demanding that Arneson get full royalties from the cover price of each copy of Holmes Basic. The key to this letter, and to the litigation that would follow over AD&D, is the following from the Contract: "the set of game rules or game entitled DUNGEONS & DRAGONS[.]". Per the Contract, Arneson and Gygax were due "a royalty of ten percent (10%) of the cover price of the game rules or game on each and every copy sold." Arneson's counsel said that TSR was allowed to repackage the rules, and sell them as they saw fit, but Arneson should always get his 5% cut. No matter how those rules were sold, Arneson should always receive 5% of the cover price.
At this point, the lines of demarcation still seem fairly evident and easy to understand- but a major shift had already occurred. At a basic level, both sides still had the same understanding of the Contract as it applied here and in all other cases; the royalty was for a specific set of rules- the LBBs of OD&D. And the sides appear to just be arguing about a legal question under the Contract- if TSR published the LBBs and bundles it with other products, is the royalty rate applied to the value of the rules (the cover price the rules would sell for separately) or to the whole bundle? But underneath is was a deeper issue- Holmes Basic was a substantial revision to OD&D, but was still recognizably the LBBs ... plus a lot of the supplements. And the authors of the different supplements weren't getting royalties, just Arneson and Gygax.
iii. The Lawsuit
I am going to skip over a lot of acrimonious back-and-forth (and back), but the release of AD&D led to the filing of Arneson's lawsuit in February, 1979. The gravamen of the complaint that was filed was that the publication of the Monster Manual and PHB omitted Arneson's name as a co-author, depriving him of his 5% royalty on each copy sold under the Contract. After some procedural wrangling, the Arneson's lawsuit (the "Action") went forward in Minnesota in July, 1979.
Brief aside- the summer and fall of 1979 is when the popularity of D&D began to explode. At the beginning of September, James Dallas Egbert III's disappearance from his college campus became a national news story, with a private investigator (William Dear) flogging the story that it was related to D&D. This national press was rocket fuel to D&D, so you can tie the true beginning of the lawsuit with the sudden explosive popularity of D&D.
Now, back to the lawsuit. I explained the gravamen of the lawsuit (royalties for the MM and PHB) but ... lawyers be lawyerin'. Which meant that Arneson's complaint asked for, well, everything. Royalties. Credit. Injunctive relief to stop all D&D products. And so on. Which meant that, in turn, TSR's attorneys engaged in their own lawyerin'. They argued that Arneson was entitled to an amount between jack and squat, and also that the previous royalties he received were just because of the Contract- he hadn't done anything, and he didn't even have any real work he could have assigned. And so on.
I'm not going to go into the Action in detail, but the important date is April, 1981. Despite all the filings, the Action was set to go to trial ... and TSR was experiencing explosive growth. So in March, 1981, a settlement was reached. Arneson, of course, had demanded everything, ever, always. TSR argued he should get bupkis, and be thankful for that. The settlement terms were as follows:
TSR would buy back Arneson's shares at their current valuation.
Arneson would not appear on the AD&D books, the Basic set, or future revisions to the Basic set.
Arneson would receive a 2.5% royalty (not 5%) on the PHB and MM* with a floor and a cap to the payments.
Resolution of his other claims.
*I have not seen the original settlement, so I cannot state for certain if the DMG was included.
Despite the settlement agreement identifying the products he would received royalties on specifically, Arneson later sued (successfully) that he was owed royalties on the Monster Manual II because it was a revision of the Monster Manual. This was litigated fully, and the Court found that the MM2 was one part of a "whole" monster manual.
iv. Please Remember the Following Facts for the Future!
-Neither a court nor a jury ever made a final decision in the Action.
-The Action was set to go to trial, which meant that Arneson's attorneys were able to keep the Action alive. And this is done by continually repeating that there is a factual dispute.
-The Action was never about "who created D&D," but was about the Contract. Absent the Contract, Arneson would have gotten nothing.
C. What Did Snarf Learn about the Arneson Lawsuit?
I will be clear- the more I understood about the Arneson lawsuit, the more I realized that Arneson won the litigation lottery. Which, you know, better him than a corporation, I guess? But still. But Arneson's attorneys did an amazing job. Why?
As a matter of law, there were multiple ways that the Action could have (and arguable should have) either been dismissed or resolved on summary judgment. Arneson had no trademark in Dungeons & Dragon- not only did he not come up with the name, he never used any of it commercially. Arneson couldn't copyright the rules of a game, and the copyright to a game would have gone not to a person who "thought it up," but to the person who wrote the game- and that was Gygax (something Arneson would acknowledge implicitly at the time and explicitly after the Action). Could Arneson even qualify for a "joint work" in a copyright? And how could Arneson hope to received royalties from new products when everyone knew (and Arneson certainly did) that new products had new royalty agreements- such as Kuntz's for the Greyhawk supplement?
But the lawyers weren't gamers, and Courts decide based on the arguments before them. Here is one of many examples- Arneson claimed that the Monster Manual was just a repackaging of OD&D, and to illustrate this they used examples of monsters. One that they used was the Owlbear. Except ... the Owlbear wasn't in the LBBs. It was in the Greyhawk supplement, Arneson did not create it, and Arneson received no royalties from that. But they lawyers just used the example ... from Holmes Basic, because Arneson "created" Holmes Basic. Which meant that when TSR made the decision to give Arneson royalties and a full credit on Holmes Basic under the old contract, they created the opening for Arneson to later argue that everything in it was created by him and using material that he did not create to make a new work gave him royalties on the new work.
But what does this mean? Okay, remember the Monster Manual II litigation? Based purely on the merits, I would argue that Arneson should have lost that- the Court made an incorrect decision on the law and the facts, and Arneson was no more entitled to royalties from that under the agreement than he would have been the Fiend Folio. Litigation, however, is always uncertain. And civil litigation is about leverage. Arneson's attorneys kept the Action going, avoiding dismissal and summary judgment, and a trial was coming up. Now, any competent attorney would tell you that trials are inherently uncertain. Also? Expensive. Companies that are defending actions will almost always settle cases that are about to go to trial with any possible exposure to significant downside because a small, but certain, downside is preferable to a likely victory but the possibility of a major loss. And IMO, that's exactly what happened.
TSR was experiencing massive growth. It was exploring movie opportunities and all sorts of licensing deals. Even if Arneson's claim was legally dubious and you gave the odds, at trial, of 1% or 5% ... well, a loss would have been catastrophic, leading to D&D and TSR being thrown into chaos with injunctive relief and questions about licensing. Arneson would never have more leverage. But you can read into the legal merits by seeing the final settlement terms- Arneson was forced to sell his shares to TSR at their current value- that's not a windfall, that's making him sell his shares so that he stops showing up to shareholders' meetings. Arneson would receive no credit. All other claims would go away. And while the whole case was about his right to 5% royalties under the Contract, he agreed to ... 2.5% royalties on the AD&D rulebooks, and his royalties would be subject to a hard cap.
In other words, he was paid to go away. Well, until the Monster Manual II. From TSR's point of view, this was a great settlement! Sales were exploding, and regardless of the merits, a thorn was removed from their side. However, the forced sale of Arneson's shares was an unintended windfall for him ($1000/share at the time ... in 1985, Gygax ended up being burned because he refused to pay the Blumes $300 a share). He received royalties on a dubious legal theory not just for Basic (and future revisions) but the hardcover AD&D core books- as well as an additional windfall from the Monster Manual II. Unlike Gygax, he didn't screw around (other than the Blackmoor supplement, which ended up being a moot issue and for which he was paid) with trading his royalties for stock, or execute agreements with TSR to assign his rights to fool other people (ahem)- which meant that he received a lot of money.
D. Conclusion- So Why Write All of This?
In the end, who "created D&D" can be argued by anyone, at any time. I would ask that people stop trying to bring the lawsuit into this as proof of ... anything related to the actual creation. The lawsuit is fascinating in a lot of ways from a legal standpoint. It shows how poorly considered wording in a contract can lead to pain. It is another example of how almost all civil litigation is about leverage- and how Arneson's counsel deftly kept the case going based on a colorable legal argument that probably should have lost at summary judgment, and then with a trial date looming, extracted a great settlement for their client. But in the end, there was no decision from the Court. And certainly no finding about "who created D&D." At its heart, Arneson's attorneys were never trying to argue that he was the "creator," but only that he might be able to qualify as a part of a joint venture so that the Contract was valid; and this was just to create a disputed issue of fact to get the case to trial.
The Action, and all the maneuverings (including barbs in the 'zines and other press directed to each other) by Gygax and Arneson are definitely worthy of attention- but neither one emerges looking good. Gygax appears, more and more, to be someone who worked hard to achieve money and fame, and then turned around and worked hard (and let others do so) to make sure that money would keep going to him, and screwing others out of the ability to prosper as he did. And Arneson appears to be someone who may have been a wonderful friend and gamer, but was absolutely miserable to work with and who burned bridges with every single publisher he worked with because he had a singular inability to write products. Moreover, Arneson consistently argued that D&D was a terrible product and not his game-except when it came to royalties. And Arneson had no compunction about taking credit for the work of others.
So what have we learned? Well, other than people be peoplin', even Arneson and Gygax, because we are all flawed? Eh, I guess we learned not to do that again.
SNARF OUT.
....But this time it will be different, right? RIGHT?
sigh... no, no it won't.
But as they say, futility is the mother of
Unfortunately, given that this is a completely uncontroversial topic that people will certainly read thoroughly before typing replies about how angered their blood is, I am going to make the following notes and disclaimers.
A. Disclaimers, Notes, Sources, and Things I'd Like You to Pretend You Looked at Before Responding.
1. I am not discussing who "created" D&D. This is about a specific lawsuit. As you will read, the lawsuit also wasn't about who created D&D. If you want to say it was all Arneson, or all Gygax, or both of them merely borrowed from others (Wesley, Patt, etc.) feel free. If you want to argue that we over-value specific people in history, and that RPGs were inevitable for the time, that's cool too. Again, this isn't about who created D&D or should be given credit for it.
2. If you want to independently source the factual section (B), please read Game Wizards first. If you're lazy, you can start on page 151. But it would be hard to understand what you're reading if you didn't read the 150 pages before that. Also, I am going to say that if you are really interested in history, you'd be better off reading the books and/or looking at sources than arguing with someone who is trying to provide that information on the internet, but I'm not the boss of you. Please, though, if you don't have the book, buy it and support your local bookseller.
3. Section B will be (as much as I can) limited to discussion the actual facts and dates and documents. Section C will be what I think can be reasonably inferred. If you want to argue with something in Section B, please provide a source so I can verify what you are saying and correct it. If you want to argue with Section C, well, that's just like ... your opinion, man.
B. A VERY BRIEF Factual Recounting of the Arneson Lawsuit
i. The Arneson Contract, and TSR Royalties
The first contract between Arneson and TSR (in the original incarnation as a partnership) was executed January 4, 1974. It was an assignment of copyright and other rights by Arneson and Gygax to TSR for "the set of games rules to be entitled Dungeons and Dragons as booklets ..." Gygax and Arneson would split a 20% royalty on the sales price (10% each).
On April 7,1975, the first contract was superseded by a new agreement (hereafter, the "Contract"). The royalty rate was cut to 10% total (5% each), but it was now based on the cover price, not the sales price, of the booklets. While this looks like a haircut, in practice it was slightly better for the both Gygax and Arneson- if there was a sticker price of $20, then every copy sold now provided $1 in royalties each to Gygax and Arneson. Previously, if the booklets (the "LBBs" or Little Brown Books that formed the core rules of OD&D) were sold at a discount, the prior contract meant that the royalties would be paid on the discounted price which was often somewhat less than half the sticker price.
At the time of the Contract, the general understanding in the wargaming industry (which was mostly a hobbyist venture) was that royalty agreements were specific to products- you make a product, and the publisher pays you a royalty for that product. So if you made "Flumphs' Campaign for North Africa," you would get the royalties for the sales of that product. If someone else wrote rules, say, "Expansion Rules for Flumphs Fighting in Eritrea" then that other person would get the royalties for that product. This model was followed by TSR- when the Greyhawk supplement came out, it was governed by a royalty agreement between TSR, Gygax, and Rob Kuntz. When it came to the Blackmoor supplement, Arneson would receive a separate royalty for the new product (he ended up negotiating for shares of TSR instead of receiving a royalty).
...but then came Dr. Holmes.
ii. How Holmes Basic Led to the Arneson Lawsuit
I am going to elide over a lot of the details here- suffice to say that Arneson was not an easy individual to work with (as shown repeatedly through the 1970s) and things soured quickly between Arneson and TSR. He was fired, he groused about receiving shares instead of royalties on Blackmoor (to which he was told that it was more than fair, given he barely wrote any of it ... which may be true, but did not improve relations), and so on. But after Arneson left TSR, and as he continued to face financial issues afterwards, he became increasingly interested in ... his royalties.
Everything started with a letter sent by Arneson (and either ghostwritten or with a large amount of assistance from Dave Megarry) in April 1977, asking questions about his royalties, requesting a full accounting, and finally stating that he wanted to know about rumors of the "rules known as Dungeons & Dragons" being rewritten be new people. Of course, Arneson knew that these weren't rumors, and work had already begun on the Holmes version of OD&D, aka Holmes Basic. The original drafts of Holmes Basic listed the authors as Dr. Eric Holmes and Gygax, and did not mention Arneson. Moreover, TSR was also beginning the process of a complete redesign of D&D- what would become known as AD&D at the time, and what we now call 1e.
Now, when Holmes Basic was officially released, it credited Arneson and Gygax as the authors, and Holmes as the editor. In November 1977, Arneson visited Lake Geneva (HQ of TSR) accompanied by an attorney, asking for an accounting of his royalties. He met with Brian Blume, who broke down what Arneson received. And Arneson was receiving the royalties due ... except there was a twist. He received 5% from sales of the original rules, but only 2.5% from Holmes Basic. TSR's reasoning was that Holmes Basic wasn't just the rules, but was a boxed set that included other items (dungeon geomorphs, dice, Monster & Treasure assortment). Holmes Basic cost $10, the other items separately would be $6.50, so Blume explained that, in TSR's view, they were doing Arneson right by valuing the rules themselves as $5.
Before you reflexively take one position or another on the "rightness" or "wrongness" of either side on that- Holmes Basic did include other products. And the Dungeon Geomorphs (for example) were sold before Holmes Basic as a separate product, and Arneson did not demand royalties from it and had no part in creating them. While arguments can be made about the correct value of components, and an attorney will always tell you that it is better to ask for permission first than to beg forgiveness later, TSR's position that Arneson shouldn't receive a windfall by adding products that he had no right to receive royalties on isn't unsound. Arneson did not receive royalties on dice (not previously included with D&D), the additional M&T assortment, or the dungeon geomorphs.
But in January, 1978, Arneson's counsel set a letter to TSR demanding that Arneson get full royalties from the cover price of each copy of Holmes Basic. The key to this letter, and to the litigation that would follow over AD&D, is the following from the Contract: "the set of game rules or game entitled DUNGEONS & DRAGONS[.]". Per the Contract, Arneson and Gygax were due "a royalty of ten percent (10%) of the cover price of the game rules or game on each and every copy sold." Arneson's counsel said that TSR was allowed to repackage the rules, and sell them as they saw fit, but Arneson should always get his 5% cut. No matter how those rules were sold, Arneson should always receive 5% of the cover price.
At this point, the lines of demarcation still seem fairly evident and easy to understand- but a major shift had already occurred. At a basic level, both sides still had the same understanding of the Contract as it applied here and in all other cases; the royalty was for a specific set of rules- the LBBs of OD&D. And the sides appear to just be arguing about a legal question under the Contract- if TSR published the LBBs and bundles it with other products, is the royalty rate applied to the value of the rules (the cover price the rules would sell for separately) or to the whole bundle? But underneath is was a deeper issue- Holmes Basic was a substantial revision to OD&D, but was still recognizably the LBBs ... plus a lot of the supplements. And the authors of the different supplements weren't getting royalties, just Arneson and Gygax.
iii. The Lawsuit
I am going to skip over a lot of acrimonious back-and-forth (and back), but the release of AD&D led to the filing of Arneson's lawsuit in February, 1979. The gravamen of the complaint that was filed was that the publication of the Monster Manual and PHB omitted Arneson's name as a co-author, depriving him of his 5% royalty on each copy sold under the Contract. After some procedural wrangling, the Arneson's lawsuit (the "Action") went forward in Minnesota in July, 1979.
Brief aside- the summer and fall of 1979 is when the popularity of D&D began to explode. At the beginning of September, James Dallas Egbert III's disappearance from his college campus became a national news story, with a private investigator (William Dear) flogging the story that it was related to D&D. This national press was rocket fuel to D&D, so you can tie the true beginning of the lawsuit with the sudden explosive popularity of D&D.
Now, back to the lawsuit. I explained the gravamen of the lawsuit (royalties for the MM and PHB) but ... lawyers be lawyerin'. Which meant that Arneson's complaint asked for, well, everything. Royalties. Credit. Injunctive relief to stop all D&D products. And so on. Which meant that, in turn, TSR's attorneys engaged in their own lawyerin'. They argued that Arneson was entitled to an amount between jack and squat, and also that the previous royalties he received were just because of the Contract- he hadn't done anything, and he didn't even have any real work he could have assigned. And so on.
I'm not going to go into the Action in detail, but the important date is April, 1981. Despite all the filings, the Action was set to go to trial ... and TSR was experiencing explosive growth. So in March, 1981, a settlement was reached. Arneson, of course, had demanded everything, ever, always. TSR argued he should get bupkis, and be thankful for that. The settlement terms were as follows:
TSR would buy back Arneson's shares at their current valuation.
Arneson would not appear on the AD&D books, the Basic set, or future revisions to the Basic set.
Arneson would receive a 2.5% royalty (not 5%) on the PHB and MM* with a floor and a cap to the payments.
Resolution of his other claims.
*I have not seen the original settlement, so I cannot state for certain if the DMG was included.
Despite the settlement agreement identifying the products he would received royalties on specifically, Arneson later sued (successfully) that he was owed royalties on the Monster Manual II because it was a revision of the Monster Manual. This was litigated fully, and the Court found that the MM2 was one part of a "whole" monster manual.
iv. Please Remember the Following Facts for the Future!
-Neither a court nor a jury ever made a final decision in the Action.
-The Action was set to go to trial, which meant that Arneson's attorneys were able to keep the Action alive. And this is done by continually repeating that there is a factual dispute.
-The Action was never about "who created D&D," but was about the Contract. Absent the Contract, Arneson would have gotten nothing.
C. What Did Snarf Learn about the Arneson Lawsuit?
I will be clear- the more I understood about the Arneson lawsuit, the more I realized that Arneson won the litigation lottery. Which, you know, better him than a corporation, I guess? But still. But Arneson's attorneys did an amazing job. Why?
As a matter of law, there were multiple ways that the Action could have (and arguable should have) either been dismissed or resolved on summary judgment. Arneson had no trademark in Dungeons & Dragon- not only did he not come up with the name, he never used any of it commercially. Arneson couldn't copyright the rules of a game, and the copyright to a game would have gone not to a person who "thought it up," but to the person who wrote the game- and that was Gygax (something Arneson would acknowledge implicitly at the time and explicitly after the Action). Could Arneson even qualify for a "joint work" in a copyright? And how could Arneson hope to received royalties from new products when everyone knew (and Arneson certainly did) that new products had new royalty agreements- such as Kuntz's for the Greyhawk supplement?
But the lawyers weren't gamers, and Courts decide based on the arguments before them. Here is one of many examples- Arneson claimed that the Monster Manual was just a repackaging of OD&D, and to illustrate this they used examples of monsters. One that they used was the Owlbear. Except ... the Owlbear wasn't in the LBBs. It was in the Greyhawk supplement, Arneson did not create it, and Arneson received no royalties from that. But they lawyers just used the example ... from Holmes Basic, because Arneson "created" Holmes Basic. Which meant that when TSR made the decision to give Arneson royalties and a full credit on Holmes Basic under the old contract, they created the opening for Arneson to later argue that everything in it was created by him and using material that he did not create to make a new work gave him royalties on the new work.
But what does this mean? Okay, remember the Monster Manual II litigation? Based purely on the merits, I would argue that Arneson should have lost that- the Court made an incorrect decision on the law and the facts, and Arneson was no more entitled to royalties from that under the agreement than he would have been the Fiend Folio. Litigation, however, is always uncertain. And civil litigation is about leverage. Arneson's attorneys kept the Action going, avoiding dismissal and summary judgment, and a trial was coming up. Now, any competent attorney would tell you that trials are inherently uncertain. Also? Expensive. Companies that are defending actions will almost always settle cases that are about to go to trial with any possible exposure to significant downside because a small, but certain, downside is preferable to a likely victory but the possibility of a major loss. And IMO, that's exactly what happened.
TSR was experiencing massive growth. It was exploring movie opportunities and all sorts of licensing deals. Even if Arneson's claim was legally dubious and you gave the odds, at trial, of 1% or 5% ... well, a loss would have been catastrophic, leading to D&D and TSR being thrown into chaos with injunctive relief and questions about licensing. Arneson would never have more leverage. But you can read into the legal merits by seeing the final settlement terms- Arneson was forced to sell his shares to TSR at their current value- that's not a windfall, that's making him sell his shares so that he stops showing up to shareholders' meetings. Arneson would receive no credit. All other claims would go away. And while the whole case was about his right to 5% royalties under the Contract, he agreed to ... 2.5% royalties on the AD&D rulebooks, and his royalties would be subject to a hard cap.
In other words, he was paid to go away. Well, until the Monster Manual II. From TSR's point of view, this was a great settlement! Sales were exploding, and regardless of the merits, a thorn was removed from their side. However, the forced sale of Arneson's shares was an unintended windfall for him ($1000/share at the time ... in 1985, Gygax ended up being burned because he refused to pay the Blumes $300 a share). He received royalties on a dubious legal theory not just for Basic (and future revisions) but the hardcover AD&D core books- as well as an additional windfall from the Monster Manual II. Unlike Gygax, he didn't screw around (other than the Blackmoor supplement, which ended up being a moot issue and for which he was paid) with trading his royalties for stock, or execute agreements with TSR to assign his rights to fool other people (ahem)- which meant that he received a lot of money.
D. Conclusion- So Why Write All of This?
In the end, who "created D&D" can be argued by anyone, at any time. I would ask that people stop trying to bring the lawsuit into this as proof of ... anything related to the actual creation. The lawsuit is fascinating in a lot of ways from a legal standpoint. It shows how poorly considered wording in a contract can lead to pain. It is another example of how almost all civil litigation is about leverage- and how Arneson's counsel deftly kept the case going based on a colorable legal argument that probably should have lost at summary judgment, and then with a trial date looming, extracted a great settlement for their client. But in the end, there was no decision from the Court. And certainly no finding about "who created D&D." At its heart, Arneson's attorneys were never trying to argue that he was the "creator," but only that he might be able to qualify as a part of a joint venture so that the Contract was valid; and this was just to create a disputed issue of fact to get the case to trial.
The Action, and all the maneuverings (including barbs in the 'zines and other press directed to each other) by Gygax and Arneson are definitely worthy of attention- but neither one emerges looking good. Gygax appears, more and more, to be someone who worked hard to achieve money and fame, and then turned around and worked hard (and let others do so) to make sure that money would keep going to him, and screwing others out of the ability to prosper as he did. And Arneson appears to be someone who may have been a wonderful friend and gamer, but was absolutely miserable to work with and who burned bridges with every single publisher he worked with because he had a singular inability to write products. Moreover, Arneson consistently argued that D&D was a terrible product and not his game-except when it came to royalties. And Arneson had no compunction about taking credit for the work of others.
So what have we learned? Well, other than people be peoplin', even Arneson and Gygax, because we are all flawed? Eh, I guess we learned not to do that again.
SNARF OUT.
