Activision Files Suit Against Viacom, Terminates "Star Trek" License

The company seeks damages for lost revenue for games already shipped, as well as lost future revenue. The complaint, filed yesterday in the Superior Court of the State of California, accused Viacom of breaching its promise to continue exploiting the "Star Trek" franchise consistent with its practice at the time the agreement was signed in 1998. With the filing of the suit, Activision said it was terminating the five-year-old agreement. It seeks to recover damages it claims to have suffered, as well as lost future revenues. In court papers, Activision said it "...cannot successfully develop and sell 'Star Trek' video games without the product exploitation and support promised by Viacom. A continuing pipeline of movie and television production, and related marketing, is absolutely crucial to the success of video games based on a property such as 'Star Trek'." Further, in its press release, Activision claims that "...through its actions and inactions, Viacom has let the once proud 'Star Trek' franchise stagnate and decay. Viacom has released only one 'Star Trek' movie since entering into agreement with Activision and has recently informed Activision it has no current plans for further 'Star Trek' films. Viacom also has allowed two 'Star Trek' television series to go off the air and the remaining series suffers from weak ratings. Viacom also frustrated Activision's efforts to coordinate the development and marketing of its games with Viacom's development and marketing of its new movies and television series." Activision said it expects that this court filing and the termination of the agreement with Viacom will have no "material" impact on its previously provided first quarter and fiscal year earnings outlook. Activision signed a ten-year licensing agreement for the "Star Trek" license in 1998, that gave it exclusive rights to produce games on all platforms.