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WWE Loses Appeal Against Jakks, THQ In Bribery Case

WWE Loses Appeal Against Jakks, THQ In Bribery Case

May 22, 2009 | By Leigh Alexander




World Wrestling Entertainment has lost its appeal in an ongoing legal battle versus Jakks Pacific, as a court again refused to find Jakks Pacific and THQ guilty of bribery, antitrust, and conflict of interest, among other charges.

"We are pleased that both the Federal District Court and the Court of Appeals for the Second Circuit have dismissed WWE’s federal claim," says Jakks chairman and co-CEO Jack Friedman says.

WWE had appealed a ruling made in September 2008 against its fourteen-count complaint that had alleged that Jakks and THQ bribed WWE's former licensing agent Stanley Shenker and Licensing and Merchandising SVP James Bell. WWE sought to void its licenses to both companies, in addition to various damages.

Included in the original complaint was the allegation that Jakks subsidiaries made personal payments to the licensing agents to secure deals for WWE video games -- and to ignore better offers from THQ and Activision.

When the Connecticut Court dismissed WWE's case -- including state antitrust, claims it should get its licenses back from both THQ and Jakks, and other federal claims -- the company stated its intention to appeal, and this recent development represents the end of that appeal.

The WWE license plays a major role in publisher THQ's portfolio -- the Smackdown vs. Raw series is considered among its key franchises. However, the firm has now hedged its bets by acquiring a game license for the UFC mixed martial artists franchise, releasing the first title, UFC 2009 Undisputed, this month.

THQ itself successfully sued Jakks Pacific for royalties in a separate court case over the WWE license, and the companies arbitrated licensing fees THQ pays Jakks under a joint venture. THQ is responsible for all franchise operations, and Jakks is "not actively involved."

Under this deal, Jakks -- and sublicensor THQ -- hang onto the license until the end of the year -- at which point it shifts to Mattel. Video game-related plans for the license past that point have not yet been revealed.


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