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!

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."

 

[Olrox17]

.......................

Er, yes?

 

[Mistwell]

Basically, what Sick_Boy already answered. We may not have all the facts (and if this is settled out of court, we probably never will), but if WotC had solid proof of a breach of contract on GF9's part, they wouldn't need to play the "stall" tactic. The same tactic they used with the Dragonlance authors: they won't terminate the contract (because that would cost WotC money), but they'll just refuse to approve anything at all.

I was willing to give them the benefit of doubt during the Dragonlance debacle, but not anymore. This is a pattern.

The facts don't support this "stall" tactic claim to begin with. They didn't stall. They gave notice of breach, and GF9 characterized that as a "didn't approve". I am betting that was it though. It doesn't cost WOTC anything to terminate after a breach.

People keep wanting to make this "the same as Dragonlance" but there is zero evidence of that other than pure speculation. If the claim is that GF9 botched translations, that's a normal ordinary breach of contract claim which has nothing to do with the Dragonlance issues. I think people should stop trying to look for patterns where there may not be one.

 

[Mistwell]

Fair enough. Although the argument that nobody at WotC speaks or read Korean seems wrong; someone at WotC actually approved the translated text before it got printed, so they must have had at least one person. Using subcontractors for translation and distribution in foreign markets is a business decision driven by many factors, of which the actual translation cost is just one (and probably not the main one).

It still seems like a flimsy excuse to get rid of their entire deal with Gf9... I mean, if the “Korean issue” had been such a big deal, we would probably have heard about it through international news before...

There is no claim that text specifically was approved. They very likely approved it based on look and format and the trust in the relationship they had with GF9.

And I suspect the "offensive" translation issue IS something out there in international news, but our small community here doesn't follow that Korean subculture news.

 

[Mirtek]

I don't see how that follows. Your characterization that it's "shady" is very biased. All we have is the statements from each side. If what WOTC said is accurate, then how they did it is exactly how you'd do it under such a contract. At the time you become aware of a breach you give notice. If the breach cannot be cured (and I don't see how it could be in this event) then the contract ends due to breach after notice. There is nothing shady about that procedure. It's precisely how most contracts like this would deal with a breach.

Except that WotC did not end the contract. Because ending the contract would entail consequences. They pretend the contract is still valid and while at the same time blocking any fullfillment of the contract. That is shady.

 

[Mistwell]

Except that WotC did not end the contract. Because ending the contract would entail consequences. They pretend the contract is still valid and while at the same time blocking any fullfillment of the contract. That is shady.

People keep saying that. Where are you getting that? It sure looks like WOTC did in fact give notice of breach, and generally there are not in fact these implied negative consequences for ending it when the other party breaches. If there were, the other party would always breach! Where is this coming from that WOTC "pretended" the contract was gone? Notice of breach is not "the contract is gone". You still use the breach procedures in the contract - which typically is an offer to make good on the breach over some period of time, fulfilling on remaining inventory or turning that inventory over to the other party, and giving over any monies collected on sales of that inventory, but cessation of work on future products. Which...is exactly what this looks like right now, except GF9 is claiming I think they want to cure the breach somehow.

What is it you think a breach of contract looks like when it happens?

 

[NotAYakk]

I am against coming up with a nickname or label to be assigned to any group.

Us nickhaters need to stick together.

 

[Mirtek]

People keep saying that. Where are you getting that? It sure looks like WOTC did in fact give notice of breach, and generally there are not in fact these implied negative consequences for ending it when the other party breaches. If there were, the other party would always breach! Where is this coming from that WOTC "pretended" the contract was gone? Notice of breach is not "the contract is gone". You still use the breach procedures in the contract - which typically is an offer to make good on the breach over some period of time, fulfilling on remaining inventory or turning that inventory over to the other party, and giving over any monies collected on sales of that inventory, but cessation of work on future products. Which...is exactly what this looks like right now, except GF9 is claiming I think they want to cure the breach somehow.

What is it you think a breach of contract looks like when it happens?

In the initial post:

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.

If WotC had a valid strong enough case they could have ended the contract early. That they needed GFP agreement means that they didn't have enough against them (even if only because it's such a bad contract).

 

[Mistwell]

In the initial post:



If WotC had a valid strong enough case they could have ended the contract early. That they needed GFP agreement means that they didn't have enough against them (even if only because it's such a bad contract).

If a company breaches and you give notice of breach, that's "WOTC ending the contract early". If the other company doesn't want that to happen and wants to try and cure the breach, that's "GF9 didn't agree to that." If WOTC says "no further products" that's using the breach clause which typically says fulfill on what's already been produced by cease all further products beyond existing inventory.

This is what a breach of contract typically looks like, though sometimes it instead looks like handing over existing inventory. This IS ending the contract early, often. Typical contracts breach clauses allow for finishing out existing inventory. This is often what a "valid strong enough case to end the contract early" could reasonably look like. Otherwise a company could breach and then also just run away with the produced inventory.

I again think people are trying to spin this as being the Dragonlance round hole and trying to shove this square peg into that hole and say they are the same thing. I have serious doubts that's what is happening here. The allegation that GF9 screwed up translations in an offensive way is a serious one.

 

[Dausuul]

The facts don't support this "stall" tactic claim to begin with. They didn't stall. They gave notice of breach, and GF9 characterized that as a "didn't approve". I am betting that was it though. It doesn't cost WOTC anything to terminate after a breach.

People keep wanting to make this "the same as Dragonlance" but there is zero evidence of that other than pure speculation. If the claim is that GF9 botched translations, that's a normal ordinary breach of contract claim which has nothing to do with the Dragonlance issues. I think people should stop trying to look for patterns where there may not be one.

Looking at the material from the filing posted here, that does not appear to be what GF9 is saying:

16. On or about May 18, 2020, Wizards communicated to GF9 its desire to end the 2017 Agreement and the 2008 Agreement one year early – on December 31, 2020 rather than the planned expiration date of December 31, 2021.

17. The parties communicated over the next several months in an attempt to strike a compromise; however, no agreement has been reached.

18. During the discussions regarding Wizards’ requested early end to the 2017 and 2008 Agreements, Wizards informed GF9 that certain products licensed under the 2017 Agreement, which were included in the parties’ agreed to release schedule, were not going to be approved.

19. Wizards did not note any issue with the products, yet declined to approve the products for release.

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.

...

24. On November 9, 2020, GF9 sent a letter to Wizards notifying it that GF9 considered Wizards’ failure to approve submitted products was a breach of the 2017 Agreement and demanded that Wizards’ cure its breach. As of today, Wizards has not done so.

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

Now, I'm not a lawyer (and if I recall correctly, you are), so if the legal meaning of this text differs from the "layman's interpretation," I yield to your expertise. But at least as a layman, it does look as if GF9 is alleging the same kind of behavior that Weiss and Hickman claimed: Wizards was withholding approval of licensed products without giving a reason for it. Nobody said anything about breach of contract until November 9th, when there was an exchange of "You're in breach of contract!" "Nuh-uh, you are!"

 

[SiCK_Boy]

To be fair, WotC refusing to approve subsequent work may be their way to "implement" the ending of the contract (through the breach clauses included in the contract), rather than having it wait for some judicial approval or giving Gf9 an option to drag things out while still benefiting from it.

I still think WotC is in the wrong here, call it my own bias against big corporations, and I certainly think they showed a lack of good faith in immediatly jumping to the "let's end the full agreement with this partner we've had for years" rather than seeking more specific remedy.

And I agree the situation is really not the same as with the Dragonlance saga (next generation), even if some of the patterns may appear similar (WotC refusing to approve work without much of a reason).

But I guess we'll see in the coming weeks / months how it turns out.