THQ 2005 Annual Report Download - page 35

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Item 3. Legal Proceedings
WWE Lawsuit. On October 19, 2004, World Wrestling Entertainment, Inc. (“WWE”) filed a lawsuit in
the United States District Court for the Southern District of New York against JAKKS Pacific, Inc.
(“JAKKS”), THQ, the THQ/JAKKS jointventure, and others, alleging, among other claims, improper
conduct by JAKKS, certain executives of JAKKS, an employee of the WWE and an agent of the WWE in
granting the WWE video game license to the THQ/JAKKS joint venture. The complaint seeks various
forms of relief, including monetary damages and a judicial determination that, among other things, the
THQ/JAKKS video game license is void. On March 30, 2005, WWE filed an amended complaint, adding
both new claims and THQ’s president and chief executive officer, Brian Farrell, as a defendant. THQ
believes that neither it, nor Brian Farrell, is directly accused of any wrongdoing in the complaint or the
amended complaint, and believes that either there is no basis for terminating the license with THQ, or that
THQ will be made whole by those whose conduct is eventually found to be unlawful. We intend to
vigorously protect our rights and, if necessary, pursue appropriate claims against third parties.
Patent Infringement litigation. On August 30, 2004, THQ was served with a lawsuit entitled American
Video Graphics, L.P. v. Electronic Arts, Inc., et al., filed in the United States District Court for the Eastern
District of Texas. The Plaintiff claims that Defendants,including THQ, have infringed upon a patent
owned by the Plaintiff entitled “Method and Apparatus for Spherical Panning.” Defendants in the lawsuit
include THQ, Electronic Arts Inc., Take-Two Interactive Software, Inc., Ubi Soft, Activision, Inc.,
Atari, Inc., Vivendi Universal Games, Inc., Sega of America, Inc., Square Enix, Inc., Temco, Inc.,
LucasArts Entertainment Co., and Namco Hometek, Inc. THQ has entered into a joint defense agreement
with several of the other Defendants and intends to vigorously defendthe claims against us. Since the
litigation is still in an early stage, we cannot predict the likely outcome of this dispute.
Tetris Litigation. On April 14, 2005, THQ filed a complaint against The Tetris Company, LLC (“Tetris”)
in the Superior Court of California, County of Los Angeles. The complaint alleges that Tetris breached its
license agreement and certain oral agreements with THQ, which prevented THQ from releasing a Tetris
product for the Nintendo DS system as planned in March 2005. Additionally, Tetris has indicated that it
believes the term of THQ’s license agreement with Tetris may have expired on March 24, 2005, despite
THQ’s compliance with the requirements for renewal pursuant to the terms of the license. Our complaint
seeks monetary damages and injunctive relief against Tetris, as well as a judicial declaration that the term
of THQ’s license agreement with Tetris extends to March 24, 2007.
Additionally, we are involved in routine litigation arising in the ordinary course of our business. In the
opinion of our management, none of this pending routine litigation willhave a material adverse effect on
our consolidated financial condition or results of operations.
Item4. Submissionof Matters To A Vote of Security Holders
There were no matters submitted to a vote of security holders during the fourth quarter of the fiscal year
covered by this Annual Report.