LEGALWATCH: Games Workshop vs Chapterhouse Verdict

[Bigred]

We have a verdict!

Some initial notes:
This is a Jury Verdict, and has not yet become a Final Judgement

Breaking down the counts along the different categories we have:

Copyright Claims
160 claims alleged against CHS
-GW won on 1/3 of the claims, including items such as CHS' Powerfists
-CHS won on 2/3 of the claims, including the use of the underlying shape and size of GW Shoulderpads.

General Trademark Claims
9 claims alleged against CHS
-CHS won all 9 claims, including either no infringement, or fair use of the GW trademarks on CHS' website.

Disputed Trademark Claims
21 disputed trademark claims alleged against CHS
CHS won 11 claims
GW won 10 claims

GW Trademarks ruled "Previously Used in Commerce" Claims
61 claims alleged against CHS
CHS won 35 claims
GW won 27

Notable Trends and Individual Products Under Dispute
CHS lost on some individual products including:
-Doomseer
-Dark Elf Arch Tortress

CHS won on some individual products including:
-Jetbike
-Super-heavy walker model
-Lizard Ogre

Damages Awarded:
CHS ordered to pay GW damages of $25,000 USD

Both sides may appeal the ruling.

Thoughts and Implications:
It's looking like however CHS as an entity comes out of this ruling, the implications for the 3rd party industry are profound.

-The ruling of no infringement for the use of the underlying shape and size of GW shoulderpads is now on the legal record.
-Possibly more important is not guilty verdicts on the use of GW trademarks and terms on the CHS website.
-While certain CHS products themselves may disappear from the Earth in the aftermath of this case, it looks like the verdict may have provided a clear blueprint for the 3rd party accessory bits market. One that allows legal use of certain GW trademarks and terms in a way that goes way beyond what Nottingham themselves ever wished to allow.

More details as we get it... Documents will be coming in time.

UPDATE 6/17/2013

Winston & Strawn LLP [URL="http://www.winston.com/index.cfm?contentID=30&itemID=4587"]issue a press release[/URL] on the case:

June 17, 2013

Winston & Strawn Defeats Hundreds of Trademark and Copyright Infringement Claims on Behalf of Pro Bono Client

Cutting-Edge Decision Protects Industries from Litigation Blocking Add-On Products

CHICAGO, IL – In a classic David-versus-Goliath battle, Winston & Strawn LLP represented Chapterhouse Studios LLC on a pro bono basis in a cutting-edge federal trademark and copyright dispute in the Northern District of Illinois (Games Workshop Limited v. Chapterhouse Studios LLC 1:10-cv-8103). The verdict of this jury trial, held in June 2013 before Judge Matthew Kennelly, confirms that copyright and trademark law should not be used to block add-on products. Winston & Strawn has litigated the case since 2010, and co-counsel law firm Marshall Gerstein joined the matter in 2012.

“This was a classic case of trademark and copyright bullying by a much bigger Plaintiff,” said Jennifer Golinveaux, partner in Winston & Strawn’s San Francisco office. “I am proud of the investment made by the firm, and the many attorneys who devoted themselves to making sure the intellectual property laws were not misused to squash a much smaller player.”

Games Workshop manufactures Warhammer 40,000, a tabletop battle game that works with armies of miniature figures and vehicles, while Chapterhouse sells customized add-on parts for the figures and vehicles used in the game. The United Kingdom-based Games Workshop, a company with $200 million per year in revenues, alleged more than 200 claims of copyright and trademark infringement against Chapterhouse, a small business run out of an individual’s garage in Texas. Games Workshop argued that it was seeking a complete shutdown of Chapterhouse’s entire business and although Games Workshop initially sought over $400,000 in damages, by the end of the two-week jury trial, the plaintiff dropped its damages demand to only $25,000.

The jury deliberated for more than two days and found that Chapterhouse could continue to make and sell over a hundred products without fear of copyright infringement. The jury also confirmed that Chapterhouse could continue to use most of Games Workshop’s asserted trademarks when selling compatible parts, including all nine of Games Workshop’s registered trademarks. Together with the summary judgment wins, the jury’s verdict confirmed Chapterhouse can continue to make and sell 111 products that Games Workshop hoped to block using copyright laws, and can continue to use 104 words and phrases that Games Workshop said were trademarked.

Imron Aly, lead trial attorney and partner in Winston & Strawn’s Chicago office added, “It was a pleasure to represent a small entrepreneur like Nicholas Villacci of Chapterhouse, who has a passion for his work and wanted to see his business survive.”

Julianne Hartzell, partner at co-counsel law firm Marshall Gerstein added, “We are proud that we were able to help protect Chapterhouse against the overreaching claims made by Games Workshop in such a substantial trademark and copyright dispute.”

6-27-2013 Motions for Final Judgement
Both parties have submitted their suggested versions of final judgement after the Jury Verdict


Motions for Final Judgement


Games Workshop Motion


CHS Motion

[Nabterayl]

Do we have a link to source material?

[energongoodie]

How can you legally use someones trademarks? This is gonna be interesting.
Share price predictions any one?

[Nabterayl]

How can you legally use someones trademarks? This is gonna be interesting.
Share price predictions any one?

Without seeing the underlying verdict on the specific counts, the general rule is description - "this is a space marine" (when pointing to a space marine), "this fits on a space marine," "I don't like space marines," "I sell space marines" (when legally allowed to do so), things like that.

[rabscutle]

How can you legally use someones trademarks? This is gonna be interesting.
Share price predictions any one?

By saying "All Games Workshop products mentioned are Trademark Games Workshop" the same way after market product makers have been doing in every other industry since, ya know, ever.

[Nabterayl]

By saying "All Games Workshop products mentioned are Trademark Games Workshop" the same way after market product makers have been doing in every other industry since, ya know, ever.

Depending on how you mean that, that doesn't work. For instance, if I sell shoulder pads that are compatible with <insert GW trademark here>, I can't call them "<trademark> shoulder pads," slap a disclaimer on my shop that "<trademark> is a trademark of Games Workshop" and be done. I am still, in effect, claiming that my shoulder pads are Games Workshops'Attribution isn't a get-out-of-infringement-free card.

I can say, "shoulderpads compatible with <trademark>" because that is a factually true statement. There is really no way to make that statement without using the trademark, so the law allows me to do so. I am still technically using the trademark (I said/printed the word, logo, or whatever), but I am only doing so to make a true statement about the characteristics of my product.

[Build]

I'm actually very glad GW lost the claim on the Croc ogres, I found out only the other day that GW sued/tried to sue avatars of war for the lizardman sculpt I did, they didn't target any other model (or if they did, they lost the claim), but went straight for mine, which was making me seriously dread the Dragonblood project.

As a company to work for, they are despicable, the way they treat potential employees is disgusting, I've had test sculpts sent to reaper miniatures and had feedback along with other little treats like copies of artwork and $100 of free minis, where as GW have not returned some of the greens I sent them, claiming to have mailed them, only for nothing to arrive.

I'm happy with that part of the result at least, it gives me hope that I can carry on with Lizardman based sculpts for companies like Troll forged and Avatars of war without fear of persecution, especially as I do my best to avoid IP rips.

[Defenestratus]

I'm actually very glad GW lost the claim on the Croc ogres, I found out only the other day that GW sued/tried to sue avatars of war for the lizardman sculpt I did, they didn't target any other model (or if they did, they lost the claim), but went straight for mine, which was making me serious dread the Dragonblood project.

As a company to work for they are despicable, the way they treat potential employees is disgusting, I've had test sculpts sent to reaper miniatures and had feedback along with other little treats like copies of artwork and $100 of free minis, where as GW have not returned some of the greens I sent them, claiming to have mailed them, only for nothing to arrive.

I'm happy with that part of the result at least, it gives me hope that I can carry on with Lizardman based sculpts for companies like Troll forged and Avatars of war without fear of persecution, especially as I do my best to avoid IP rips.

And this is precisely why GW should never have opened that pandora's box.

I'm glad that you now have better legal footing to continue your work.

[40kGamer]

As a company to work for, they are despicable, the way they treat potential employees is disgusting, I've had test sculpts sent to reaper miniatures and had feedback along with other little treats like copies of artwork and $100 of free minis, where as GW have not returned some of the greens I sent them, claiming to have mailed them, only for nothing to arrive.

Had a similar experience with them... I finally got my original back broken and missing a piece with no explanation. While I love their games I quite actively dislike the company. Best of luck with your future projects. Enjoy the freedom of better defined legal lines.

[rle68]

How can you legally use someones trademarks? This is gonna be interesting.
Share price predictions any one?

didnt you read? gw doesnt have trademarks for what they claimed they did