Martin Wallace Being Sued by FRED Distribution

U.S. publisher FRED Distribution is suing game designer Martin Wallace for breach of contract. The court summons (PDF), which Wallace has posted on the Warfrog Games website, makes two claims against Wallace:

  1. The contract that Wallace signed with Eagle Games in March 2005 for the rights to a board game described as “Age of Steam-Eagle Games Variant” included the right to all iterations of the game “including all of its rights, ideas, concepts, and rules.” The summons notes that Wallace was paid £10,000 for all rights to this game. The terms of this contract also prohibited Wallace from ever “publishing, manufacturing, or selling the board game known as ‘Age of Steam’ in other than its then-currently published form.” The publication of Steam by Mayfair Games thus constitutes a breach of this contract, with FRED – which purchased Eagle Games’ assets in August 2006 – having suffered damages equal to the original £10,000 payment as well as a further $10,000, that being the royalties paid to Wallace by Mayfair Games.

  2. Eagle Games paid Wallace £5,000 for the rights to an as-yet-undesigned game that was due to be delivered by December 31, 2006. The summons says that Wallace has failed to deliver on this contract.
The contract between Eagle Games and Wallace is included in the summons and the section relevant to Age of Steam states: “The parties hereto understand and covenant that the rights to Age of Steam-Eagle Games Variant described in this agreement and transferred herein to Eagle shall be solely Eagle’s property without claim by Sellers except that the parties understand and agree that Sellers shall maintain the right to publish, manufacture, and sell the boardgame, Age of Steam, in its current form, with it [sic] current publisher or published by the Sellers in its current for, and in no other form or publisher.”

The contract includes a subsection titled “The Winsome Trademarks” which reads as follows:

Eagle and Sellers acknowledges that the Age of Steam trademark is owned or licensed solely and exclusively by Sellers. Sellers acknowledge that they and each of them, have a valid and subsisting agreement with Winsome Games and John Bohrer, its principle, which gives all right, title, and interest in and to Age of Steam, its rules, concepts, or any other aspect thereof to Sellers. Notwithstanding that fact, Eagle agrees to use the Winsome logo on the packaging of Age of Steam-Eagle Games Variant only in the form and manner and with appropriate legends as prescribed by Winsome Games or its principle, but in no case shall the presence of the Winsome logo interefere with or impinge upon the property Age of Steam-Eagle Games Variant.

As for the unnamed game to be delivered prior to Dec. 31, 2006, the contract states that “Ealge shall have the right of first refusal on all designs created by Sellers during the term of this agreement.” The summons doesn’t mention whether Byzantium (published by Warfrog Games in 2005) or Perikles (published in 2006) was presented to Eagle and refused, or not presented at all, instead stating only that “[t]o date, Wallace has failed to develop a board game and transfer of [sic] all his rights, title, and interest in and to said board game to FRED.”

This contract also includes the sale of Struggle of Empires and “all its iterations” to Eagle Games for £10,000.

The court date to answer this summons is September 1, 2009 in Wheaton, Illinois. In his only comment on the summons, Wallace wrote, “I am rather surprised and saddened to find that I am being sued by FRED distribution for breach of contract. The timing of this action is not ideal as I’m about to leave for a six week family holiday. I have asked Keith Blume of FRED Distribution if it would be possible to delay the hearing for at least one month, so that I have time to arrange a proper defence.”

FRED Distribution was contacted for comment outside of business hours, and I’ll amend this news item in the future with any comment that I receive.

Update, Jul 23, 17:00: Martin Wallace has subsequently noted the following on a BoardGameGeek thread:

I do not want to make too many comments about the case but there is one very important issue which people should be aware of. I do not have an original copy of the contract as it was lost during a house move. The contract included with the summons is a copy of a fax that I sent from a friends fax machine, Jane Longden. It seems that even FRED do not have an original copy of the contract. Note that the second and third pages of the contract do not have her name as a header. The reason is that these pages were not part of the original contract. They have been added subsequently by FRED. No designer would ever sign up to the clauses in those two pages.

Make of that what you will.

FRED Distribution has declined to comment on this case at this time, both on the merits and details of the case, Wallace’s claims about the contract, and whether the court date for the case might change.



Posted by W. Eric Martin on Jul 23, 2009 at 09:00 AM in Game NewsThe Industry at Large / 8716

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Comments:

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I speak for at least myself when I say - WTF?

I am sure this is really going to help FRED, Winsome and Martin reach some form of equilibrium, together, or individually.  How sad.

Posted by Giles Pritchard on Jul 23, 2009 at 09:24 AM | #

How to make your company unpopular 101.

I’m not saying anything on who has the law on his side here, but this is not a good development. Not for Martin, not for FRED, not for the gamers.

Posted by Surya Van Lierde on Jul 23, 2009 at 09:41 AM | #

I agree Surya.

Posted by Giles Pritchard on Jul 23, 2009 at 09:43 AM | #

I’m amazed this was posted on the Warfrog site. The contract that is attached to the summons is hugely interesting; it shows that Martin previously granted Eagle the contractual right to publish Age of Steam and it also substantiates the fact that Winsome had an acknowledged control of the Age of Steam mark.

Posted by Michael Webb on Jul 23, 2009 at 10:11 AM | #

I should rather say, granted Eagle specific control over variations of Age of Steam with a provision that Age of Steam remained a special case.

It’s nonetheless a surprising thing to see posted on the Warfrog web site, given all of the extra information that the contract contains about the actual state of the AoS mark in this period prior to the dispute.

Posted by Michael Webb on Jul 23, 2009 at 10:16 AM | #

I guess if I’d given someone $20-30,000 for something that wasn’t delivered, I’d want my money back, but does this have to be hashed out in a court rather than settled privately?

Posted by Scott Russell on Jul 23, 2009 at 10:19 AM | #

It also makes it clear that any agreements signing over IP should be carefully reviewed.

Posted by Scott Russell on Jul 23, 2009 at 10:20 AM | #

On point #1, it’s going to be pretty hard for MW to claim Steam is not an iteration of AoS, especially since he wanted to call it AoS, and the Warfrog website still calls it AoS 3rd edition:

http://warfroggames.com/Aosprogress.html

Posted by Tim Harrison on Jul 23, 2009 at 10:22 AM | #

Actually, I withdraw my $20-30,000 for nothing comment. 

FRED got RRT and the Europe map.

I guess they just don’t want the competition of Steam and think that they paid for that.  Steam pretty clearly isn’t in its then current form AoS which is specifically allowed.

But it also isn’t a variant of RRT.

Guess the lawyers will win again hashing it out. :(

Posted by Scott Russell on Jul 23, 2009 at 10:36 AM | #

What I find odd about all this is that a contract of a defunct company (Eagle Games) can be enforced.  Most contracts are not transferrable unless otherwise stated in the actual contract.

As for AoS-Eagle Games variant, wasn’t that RRT?  Steam is not RRT variant.  Steam is a variant of AoS which has nothing to do with the old Eagle Games.

Maybe it’s time for the original 18xx designer to start sueing all of the 18xx knockoffs?  And wouldn’t that include FRED with the Martin Wallace Railways of England and Wales variant?

Posted by Kevin Rutherford on Jul 23, 2009 at 10:37 AM | #

"Maybe it’s time for the original 18xx designer to start sueing all of the 18xx knockoffs?”

Ssssshhhhhhhhhhhh. Quiet dude!

Posted by Costas Dimoglou on Jul 23, 2009 at 10:45 AM | #

After reading the contract between Eagle and Martin it looks like FRED has a good case.  The contract was transferrable.  My bad.

Posted by Kevin Rutherford on Jul 23, 2009 at 10:52 AM | #

It is a sad state of affairs, will it really benefit anyone or solve anything?

Posted by Giles Pritchard on Jul 23, 2009 at 11:08 AM | #

Eric, it might be interesting to see if Mayfair wants to comment, given the potential effect on their rights.  I suspect not, but they may have something to say.

Although I’m an IP lawyer (:-)), I hope that this will be settled quickly to minimize the impacts on the companies involved....

Posted by Jeffrey D Myers on Jul 23, 2009 at 11:40 AM | #

Being an optimist...maybe this can be settled amicably outside the courts...but I doubt it.

The timing is interesting, folks have known about Steam being produced for a LONG time now...is FRED just waking up now? I suspect not. Reasonable people would have headed this off along time before Steam even hit the shelves, waiting until now just makes a mess of everything.

Peace

Posted by Brent Lloyd on Jul 23, 2009 at 11:46 AM | #

Can anyone definitively explain what specifically is the game known as “Age of Steam-Eagle Games Variant”?

Is the AoS? RRT? This is maybe pertinent.

In the broadest sense, one could argue that any train game or delivery and pick-up game released by Wallace could be “iterations, including but not limited to, the trademarks appurtenant thereto merchandising rights, ideas, concept and rules of the “Age of Steam-Eagle Games Variant.”

In the narrowest sense, it would be specifically relegated to “Age of Steam-Eagle Games Variant.”

However, the indication that “…Sellers shall maintain the right to publish, manufacture, and sell the boardgame, ‘Age of Steam,’ in its current form, with its current publisher or published by the Sellers in its current form, and in no other form or publisher.” is troubling.

This statement is the crux and of paramount importance to the ultimate resolution of the issue. It broadens the scope of derivative products Age of Steam related to anything after the current version at that time of Age of Steam in March 2005.

IMHO, FRED may indeed win this case.

Always hire an attorney to review contracts.

Posted by Hank Arkin on Jul 23, 2009 at 11:50 AM | #

In this interview it would seem that Nick Medinger claims FRED has no claim to contracts signed by Eagle Games because they won only the inventory in an auction:
http://www.boardgamenews.com/index.php/boardgamenews/comments/news_flash_funagain_buys_eagle_games_assets_an_interview_with_nick_medinger/

You heard it here first on Boardgame News!

Peace

Posted by Brent Lloyd on Jul 23, 2009 at 12:01 PM | #

Here’s a posting Martin Wallace made on the Geek concerning this matter:

“I do not want to make too many comments about the case but there is one very important issue which people should be aware of. I do not have an original copy of the contract as it was lost during a house move. The contract included with the summons is a copy of a fax that I sent from a friends fax machine, Jane Longden. It seems that even FRED do not have an original copy of the contract. Note that the second and third pages of the contract do not have her name as a header. The reason is that these pages were not part of the original contract. They have been added subsequently by FRED. No designer would ever sign up to the clauses in those two pages.

Make of that what you will.”

Of course, this comes from one of the parties involved so, as Martin says, make of that what you will.  But once again, the plot thickens.

Can’t these things ever be simple?

Posted by Larry Levy on Jul 23, 2009 at 12:34 PM | #

My loathing for FRED deepens.

Posted by Mark Crane on Jul 23, 2009 at 12:40 PM | #

My guess is that FRED wants something else from Martin Wallace, and this is an attempt to bully it out of him

Posted by Mark Crane on Jul 23, 2009 at 12:41 PM | #

Its a shame that Game publishers devote so much time, money and effort into suing each other and so little attention to releasing games on the advertised due date.

Posted by Nick Case on Jul 23, 2009 at 01:06 PM | #

Actually, Nick, to my recollection, the only gaming lawsuits in our portion of the hobby that I can think of in the past decade are this one and the Winsome suit against Wallace.  I think most companies realize there isn’t much profit to be made, so lawsuits only make money for the lawyers.  There’s also the very real danger of losing more over ill will than can be gained through the courts.  It might be significant that both of these lawsuits originated in the States, which is much more litigious than Europe (to put it mildly).

Posted by Larry Levy on Jul 23, 2009 at 01:41 PM | #

When was there a “Winsome suit against Wallace”? I remember Winsome appealing Martin Wallace’s ‘Age of Steam’ trademark submission, but what lawsuit are you referring to?

Posted by Costas Dimoglou on Jul 23, 2009 at 02:02 PM | #

> I guess if I’d given someone $20-30,000 for
> something that wasn’t delivered, I’d want my
> money back, but does this have to be hashed out
> in a court rather than settled privately?

My understanding is that the first thing a court will ask is whether any attempt was made to resolve the dispute amicably.  The parties will then have to demonstrate that they were unable to reach agreement and the disagreement was irreconcilable.  Only then will the court come in with their big hammer.  I wouldn’t be surprised if I’m wrong on this point however.

Assuming it does get to court, which is hugely unlikely, but if it does, the next thing the court will do is to determine what the actual agreement was.  Is the contract presented by FRED actually the contract that was agreed to?  Is Martin’s claim of added pages valid?  What was the actual contract?  Once that is resolved, then the court will move forward on determining the resolution.

But of course this suit should never ever get as far as getting to court.  That would be stupid. 

The other thing to remember is that this sort of lawsuit doesn’t happen overnight.  It happens as a result of negotiations breaking down.  There’s an agreement, something happens, the parties involved try to reconcile their agreement, that breaks down, they try again, it breaks down even further, law suits are threatened as a way to try and force the people back to the table to get a resolution, it STILL doesn’t resolve, the people give up in exasperation and then finally the law suits are actually filed.  We’re seeing only the tail end here.  In some ways I feel like we’re (again) trying to reconstruct a marriage by watching the divorce proceedings.

Posted by J C Lawrence on Jul 23, 2009 at 02:43 PM | #

Uhh Larry, Winsome has yet to bring action against Martin.  Winsome defended against Martin’s trademark claim, but Winsome did not bring the initial action.  Martin did.

Posted by J C Lawrence on Jul 23, 2009 at 02:45 PM | #

It’s probably the action taken against the trademark claim I’m talking about.  I realize since we’re now in the realm of lawyers that I should be more precise in my language, but I’m afraid my mind just doesn’t work that way.  In any case, something launching the whole Bohrer vs. Wallace thing occurred while Martin was out of the country (interestingly, he was getting ready to leave this time as well); that’s the event I’m speaking of.  The only point I was making was that things like this have not been common in this portion of the gaming world and that those are the only two instances I can think of in recent years.

Posted by Larry Levy on Jul 23, 2009 at 03:32 PM | #

So Martin lost the contract but then claims the contract doesn’t say what FRED says it does. Huh??

Posted by Jennifer Schlickbernd on Jul 23, 2009 at 04:50 PM | #

Update: FRED Distribution has declined to comment on this case at this time, both on the merits and details of the case and whether it might change the court date.

Eric

Posted by W. Eric Martin on Jul 23, 2009 at 04:59 PM | #

I’m with Jennifer. Martin signed a contract. Making the accusation of FRED altering a signed contract, without hard evidence as proof, is a serious matter.

The amount of money involved in the royalties is nothing compared to the court costs. The only reason for a hobby game publisher to take someone to court on something like this is in defense of their interests… and that’s not something to do without a strong case.

Posted by Nate Scheidler on Jul 23, 2009 at 09:49 PM | #

Jennifer: loosing your contract doesn’t make you forget what you have signed, does it?

Nate: You are right, altering a signed contract is as serious matter. Why is then contract page no 5 missing in this set of documents? - leaving aside issues with some pages obviously of different origin then the others…

I am surprised to see this document be any reason for any court to support any claim. That way anyone could just take first page (with parties of contract) and the last page (with names and signatures) of any contract, then make up everything in the middle and then go to court claiming that there was a breach of so forged conditions.

Supposedly there has to be something more regarding documents. With this - there should be no way to prove that this is the original text of the original agreement and not a copy-paste-fax fake.

Posted by Bartek Sawicki on Jul 24, 2009 at 03:24 AM | #

I have never seen a contract to design a game - are the pages that Martin is disputing typical of those that are signed by designers and games publishers?

Posted by Paul Lister on Jul 24, 2009 at 04:42 AM | #

You cannot walk into court claiming that what you remembered is correct, even though you have no proof of it. Could you imagine how life would be if someone could just claim “oh by the way Bartek, you owe me a million dollars. I can’t find the contract however, but that’s how I remember it”. Come on :)

Posted by Jennifer Schlickbernd on Jul 24, 2009 at 08:39 AM | #

Mr. Wallace may be a very clever designer of tactical games, he certainly not is behaving very tactical in real life.

A couple of thoughts:
What is his gain by making public the lawsuit against him? Does he think gaining sympathy from gamers/customers will give him a strong case in court? I do not think so!
Why give away, if it is true, such a strong point concerning the missing/non existence of original contracts on both sides, particularly his opponent? This could have some impact in a court, but he already gave it away and now his opponent can anticipate on it.

All in all, I find it all very naive and my impression is that Mr. Wallace indeed is and acts not very professional. The situation as described by FRED distribution could, in my opinion, be all too true.

And that adds another point against Mr. Wallace: now each and everyone is minding Mr. Wallace’s business, adding to the rumour, reacting with emotions and thereby fuzzing the facts.

Posted by Richard van Vugt on Jul 24, 2009 at 09:10 AM | #

"Why give away, if it is true, such a strong point concerning the missing/non existence of original contracts on both sides, particularly his opponent? This could have some impact in a court, but he already gave it away and now his opponent can anticipate on it.”

Perhaps FRED knew ahead of time that Martin’s copy of the contract had been lost, and that’s why they figured they could get away with altering it.  We will almost certainly never know for sure.

Posted by Eric Clark on Jul 24, 2009 at 09:33 AM | #

It isn’t necessarily the case that FRED’s contract was maliciously altered even if Martin is right that it is not the same as the contract he signed. Nefarious changes happen a lot more on TV than in real life. More often what happens is that pages from different contracts or from different working drafts of the same contract get jumbled together through sloppy file keeping. In cases like that, both parties can easily feel in good faith that they are in the right.

It is worth remembering, too, that breach of contract isn’t always a bad thing. It is entirely possible that after a contract is signed, a better opportunity comes along. As long as the party switching deals is willing to make his first partner whole by paying the contract damages, the switch can be good (or at least not bad) for everyone. That is efficient breach. If that’s what happened here, then it would be better if Martin just manned up and paid FRED so that he could move ahead with his other contracts, but because of considerations of reputation people often find it harder to be cold bloodedly efficient in practice than in theory.

Posted by David Lund on Jul 24, 2009 at 10:46 AM | #

Jennifer, it sounds like you are describing the dispute between Michael Cherney and Oleg Deripaska, which I believe is currently being heard in a UK court. Cherney claims to have made an agreement with Deripaska regarding a 13.2% stake in a company recently valued at $36 billion.

Posted by Simon Johnston on Jul 25, 2009 at 05:35 AM | #



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