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WotC Gale Force 9 Sues WotC [Updated]

In the second lawsuit against WotC in recent weeks (Dragonlance authors Margaret Weis and Tracy Hickman sued the company for breach of contract and other things about a month ago), Gale Force 9 is suing the company for breach of contract and implied duty of good faith.

Gale Force 9 produces miniatures, cards, DM screens, and other D&D accessories. They’re asking for damages of nearly a million dollars, as well as an injunction to prevent WotC from terminating the licensing contract.

From the suit, it looks like WotC wanted to end a licensing agreement a year early. When GF9 didn't agree to that, WotC indicated that they would refuse to approve any new licensed products from GF9. It looks like the same sort of approach they took with Weis and Hickman, which also resulted in a lawsuit. The dispute appears to relate to some product translations in non-US markets. More information as I hear it!

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UPDATE. GF9's CEO, Jean-Paul Brisigotti, spoke to ICv2 and said: "After twelve years of working with Wizards, we find ourselves in a difficult place having to utilize the legal system to try and resolve an issue we have spent the last six months trying to amicably handle between us without any success. We still hope this can be settled between us but the timeline for a legal resolution has meant we have been forced to go down this path at this time."

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Russ Morrissey

Russ Morrissey


billd91

Hobbit on Quest
Interesting. There's an expanded look at the filing over at Tenkar's Tavern.

As much as I like 5e and many of the products WotC puts out for it, I'm starting to wonder if WotC might be becoming a toxic company to do business with (or at least, more toxic than usual).
 


pukunui

Hero
Interesting. There's an expanded look at the filing over at Tenkar's Tavern.

As much as I like 5e and many of the products WotC puts out for it, I'm starting to wonder if WotC might be becoming a toxic company to do business with (or at least, more toxic than usual).
Thanks. This appears to be the crux of the matter:

"20. All of the products Wizards declined to approve were listed on the approved release schedule and updates. These unapproved products are not wholly new products, but rather new translations of previously approved and released products – in English and other languages – planned for release by Wizards approved translation and distribution subcontractors in Wizards approved foreign markets."
 
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pukunui

Hero
Digging deeper, it looks like WotC wasn't happy with some Korean translations and some French translations:

B. Wizards Allegation of Breach of Contract by GF9

25. On November 9, 2020, Wizards sent to GF9 a notice of breach of the 2017 Agreement.

26. Wizards’ breach notice alleged two breaches of the 2017 Agreement by GF9 through the actions of two of GF9’s foreign translation and distribution subcontractors.

27. First, Wizards alleged that GF9 breached the 2017 Agreement through the actions of TRPG Club (GF9’s Korean translation and distribution subcontractor). Wizards alleged that certain unidentified products translated into Korean and distributed by TRPG Club were of low quality, including translations that were poorly done and included inaccurate, missing, and offensive translations. Wizards breach notice went on to further allege that TRPG Club failed to provide adequate customer service to consumers of Dungeons & Dragons materials.

28. Second, Wizards alleged a breach of the 2017 Agreement due to the actions of Black Book Editions FR (“BBE”). Wizards alleged that after BBE translated certain Dungeons & Dragons books into French, it republished certain portions of the translated product under its own brand “Heros & Dragons.”

29. Wizards’ notice of breach states that it intends to terminate of the 2017 Agreement, unless GF9 remedies its breach to Wizards’ satisfaction within the applicable time periods for cure.

30. However, the products translated and distributed by TRPG Club, which are the subject of Wizards’ allegation of breach, were submitted in their final translated form to Wizards and approved by Wizards for release. Wizards informed GF9 that it had reviewers on its staff who were fluent in Korean who reviewed the product as translated and did not note a single correction or issue.

31. GF9 disputes that the TRPG Club translation was of a poor quality, and TRPG Club provided a report stating the adequacy of its translation that was subsequently provided to Wizards, on November 12, 2019.

32. When the translation quality issue was brought to the attention of GF9 and Wizards, GF9 sought direction from Wizards on the action necessary to rectify the alleged translation issue. Although GF9 and TRPG Club disputed that any significant deficiency in the translation was present in the products, GF9 offered to remove the products from the market. However, Wizards directed GF9 to leave the products in the market and to not renew its contract with TRPG Club or submit any additional products for approval.

33. Acting on Wizards direction, GF9 did not take any further action related to the translated products, informed TRPG Club that its contract would not be renewed, and has not submitted any additional TRPG Club products for approval or release.

34. GF9 cured any breach of the 2017 Agreement it may have committed related to the alleged poor translation when it enacted the actions directed by Wizards.

35. Wizards’ breach notice further alleged a breach of the 2017 Agreement by the actions of TRPG Club for customer complaints about damaged books and orders that never arrived.

36. GF9 is aware of very few customer complaints related to TRPG Club produced products all of which occurred in fall 2019 (one year before the breach notice). Customer complaints stem largely from products being damaged in transit. The amount of products for which customers complained is extremely minimal and within the expected threshold of transit damaged products experienced in all other markets (including the US market).

37. GF9 worked with TRPG Club to ensure that each of the customer complaints TRPG Club received were rectified by either providing replacement products or a refund as requested by the respective customer.

38. GF9 and TRPG Club rectified each of the customer issues and therefore no breach exists. Even said breach did occur, it has since been cured.

39. GF9 disputes that it breached the 2017 Agreement due to the alleged actions of BBE in utilizing Wizards’ intellectual property for its own benefit.

40. GF9 does not have an obligation under the 2017 Agreement to prosecute and defend Wizards intellectual property from use by the translation and distribution subcontractors. The 2017 Agreement provides Wizards the sole right to determine whether or not any action shall be taken on account of an intellectual property infringement and GF9 is required to assist Wizards in this defense, if requested to do so.

41. On information and belief, Wizards has not instituted an action against BBE.

42. However, even if GF9 may have some responsibility under the 2017 Agreement for BBE alleged infringement, BBE did not utilize Wizards’ intellectual property gained through its relationship with GF9. BBE produced and distributed for sale its Heros & Dragons product in the fall of 2016, approximately ten months before it entered into the contract with GF9 to translate and distribute Dungeons & Dragons products. BBE’s Heros & Dragons product utilized text previously translated under a Dungeons & Dragons open gaming license, which permits the Dungeons & Dragons core rules and mechanics of game play to be used by others.

43. Upon information and belief, Wizards was aware of the Heros & Dragons products already in the market prior to GF9’s agreement with BBE to translate and distribute Dungeons & Dragons products in the French market. Wizards approved BBE as the French partner with knowledge that Heroes & Dragons already existed in the market.

44. Under its contract with GF9, when BBE translated the Dungeons & Dragons products, it utilized the same translated text it had previously translated and used in its Heros & Dragons products (i.e. the open gaming license core rules and game play mechanics). BBE did not use intellectual property gained through its contractual relationship with GF9 for its Heros & Dragons products, instead when translating the Dungeons & Dragons products it used translated text it already possessed before the contract with GF9 to expedite the translation process.

45. Upon Wizards informing GF9 of its belief that BBE was utilizing Wizards’ intellectual property in its Heros & Dragons products, GF9 entered into discussions with BBE to terminate the existing translation and distribution agreement between BBE and GF9, to purchase all outstanding stock of Heros & Dragons at GF9’s expense, to pull all existing Heros & Dragons products from the market, and to destroy all product purchased.

46. Agreement between GF9 and BBE was reached to accomplish the above stated objectives, and GF9 informed Wizards of the agreement. After reaching agreement with BBE and informing Wizards, Wizards required that BBE sign an admission of liability indicating that it had improperly utilized Wizards’ intellectual property. BBE refused to sign the admission of liability that Wizards demanded and the deal between GF9 and BBE was not completed.

47. Because BBE refused to sign the admission of liability demanded by Wizards, and upon the request of Wizards, in November 2019, GF9 terminated BBE for breach of its agreements with GF9 for failure to timely pay its royalties. The termination of BBE and settlement of outstanding claims was concluded fully in May 2020, with full agreement on termination and settlement from Wizards. A new French partner was approved and the market became active again in February 2020.

48. GF9 has no control over BBE after termination of its agreement with BBE and therefore, cannot cure any breach that Wizards has alleged relating to BBE’s continued use of intellectual property in BBE’s Heros & Dragons product.
 


innerdude

Adventurer
This . . . . isn't surprising at all, given the current state of the world economic market due to Covid.

This action, as well as the Weis/Hickman situation, is the action of a company looking down the barrel at significant, strategic revenue losses, trying to get out from under cost obligations that they feel were unlikely to produce long-term revenue gains.

It's that simple.

I can't really comment on whether they're in breach of contract in either case, but the motivation is easily understood.

I've worked for a Fortune 25 tech company previously, and I can tell you that even at that organization, $950k would not be viewed as an insignificant budget line item.
 

Yeesh. And I wanted to grab some of the Version 3 Spell Deck cards too.
My Arcane Spells deck came in today and I'm waiting for the Martial Powers and Races deck to come in.
 
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Spohedus

Explorer
This . . . . isn't surprising at all, given the current state of the world economic market due to Covid.

This action, as well as the Weis/Hickman situation, is the action of a company looking down the barrel at significant, strategic revenue losses, trying to get out from under cost obligations that they feel were unlikely to produce long-term revenue gains.

It's that simple.

I can't really comment on whether they're in breach of contract in either case, but the motivation is easily understood.

I've worked for a Fortune 25 tech company previously, and I can tell you that even at that organization, $950k would not be viewed as an insignificant budget line item.
With all due respect, in looking at their last quarterly earnings report, this breach does not appear to be motivated by corporate earnings or health.
 

Dausuul

Legend
Perhaps we should let this play out before taking sides? I mean, it is possible there is a good reason. I have my doubts, but I'm not going to decide just yet that Hasbro is wrong.... Yet.
In all likelihood, the parties will end up settling and we'll never find out the whole truth.

But this sounds very, very similar to the Weiss/Hickman situation not too long ago. Wizards is being accused of doing the exact same thing--withholding approval of finished work in order to weasel out of a contract--by a different plaintiff. That inclines me to suspect Wizards is the one in the wrong here.
 


In all likelihood, the parties will end up settling and we'll never find out the whole truth.

But this sounds very, very similar to the Weiss/Hickman situation not too long ago. Wizards is being accused of doing the exact same thing, by a different plaintiff. That inclines me to suspect Wizards is the one in the wrong here.

One thing seems to be different, though. Per Tenkars Tavern linked above, Gale Force 9 included the license agreement in their case. Something that Weis & Hickman didn't do. I do see your point that WotC seems to use the same tactic. Which I admit find a bit disturbing.

Also, I find it strange. The license agreement of Gale Force 9 basically covers a lot of countries. Something apparently went wrong in two countries, and now all have to suffer?
 

Lucas Yew

Explorer
As a Korean, I can testify the TRPG Club company mentioned up there is quite notorious for their "amateur" attitudes on practically every aspect, including translation, editing, customer service and franchise continuity (as in only importing new systems' core rulebooks only and ignoring important splatbooks) and such... (abyssally deep scowl)
 


Ace

Adventurer
Huh! I wonder what that's all about.
I won't speculate on who is in the right and who is in the wrong . I think , its just as guess as I have no inside info is that the economic chaos over the COVID 19 virus has made some companies maybe even Hasbro who no doubt have taken an income hit very tight with money . This has messed up some things with contracts that a few years ago would have gone smoothly.

You have to figure with so many shutdowns and worse reoccurring ones the economic fallout is considerable.
 
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