Hi, and welcome back to Legal Geek. This week, we review a current lawsuit in California showing that the rights to the arcade classic Ms. Pac-Man are still very valuable, at least to the two parties in dispute.
Bandai Namco Entertainment America is the rights holder for publishing the Pac-Man and Ms. Pac-Man games. Bandai has sued a maker of retro game systems called AtGames Holdings for alleged trademark and copyright infringement over the use of Ms. Pac-Man concepts and assets. Despite being initially released to video arcades in 1981 as a sequel to the original Pac-Man, the desire for players to continue playing this game remains high and thus, the IP rights remain valuable.
AtGames had previously dealt with Bandai in a license agreement over the original Pac-Man game. Apparently the quality of the game products brought to market did not comport with what Bandai expected and demanded, and as such, AtGames lost the licensed rights to make this game. When AtGames approached Bandai for a license for Ms. Pac-Man, Bandai refused.
Trying to find another route to these rights, AtGames has apparently engaged with the game's original inventor to purchase some rights to Ms. Pac-Man. AtGames then began producing a couple prototypes and discussed them with retailers. Bandai sued AtGames a few weeks ago over this, asking in addition for a temporary restraining order to stop any activities of AtGames in this regard.
So if both companies hold some legitimate rights to the property, who will win? Assuming this case does not settle, the odds still favor Bandai at this early stage of the proceedings. Although it is unclear what exact rights were sold by the inventor to AtGames, one possibility is the copyright termination right now provided to authors of works that were made on or after 1978, and if this is the case, an interesting split of rights will eventually occur.
Authors have the right in the U.S. to terminate any copyright assignment or license previously made after 35 or 40 years from the grant of rights or publication, so long as notice is provided sometime after the 25 or 30 year mark. This allows authors or their estates to have another chance to negotiate rights transfers, particularly for creative copyright works that are of significant ongoing value. Assuming any copyright the inventor held was assigned to Namco around 1980 or 1981, the 35 year term from publication ran out a couple years ago and so this work would be eligible for a termination proceeding.
Thus, AtGames may potentially have some of the copyright rights moving forward under this scenario, while Bandai of course continues to own the trademark rights they have developed from 4 decades in the marketplace. This could force the parties to the negotiation table to figure out a resolution that allows both to continue practicing and exploiting the Ms. Pac-Man IP. Otherwise, both parties could be locked in a standstill with no products being available to end consumers. Who knew a classic arcade game could raise such complex legal issues.
The Bottom Line is: protecting the ongoing long-term revenue stream from Ms. Pac-Man is obviously important to Bandai, so it makes sense that they have brought AtGames into court to try and stop the competition. However, really old properties can be subject to things like copyright termination, which complicates the ownership issues and provides leverage to third parties like AtGames. It's an interesting legal conundrum we will keep our eyes on. If there's any lesson to be learned for the common man here, it is that when license negotiations for rights break down, it is exceedingly hard to find alternative ways to properly use the rights, so it is generally better to move on to another property rather than risk a lawsuit.
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