A licensor of Carmageddon, a game that some retailers banned due to
the violence it depicts, has won its case in a UK court against an
exclusive distributor seeking payment for breach of licence terms.
The licensee, Titus Sarl, was required to pay an advance of up to
£2.2 million in four instalments, to be re-couped out of royalties
otherwise payable to the licensor, Sales Curve Interactive.
Because the game was not sold by most retailers in France and
was restricted to over-18s in Germany, the licensee was entitled to
certain compensations in the terms of its deal with the licensor,
which had pre-empted the risk of censorship affecting sales.
However, the licensor sued when the licensee failed to meet
payments, prompting a dispute over the requirements of the complex
licence agreement.
The licensor sought to terminate the agreement for non-payment.
Several questions came before the court. One was whether on
termination, the licensee was still entitled to the compensation
provisions that applied in the event of censorship. The court ruled
that it was not so entitled.
Further, the court ruled that certain contract provisions could
not apply because it was “entirely uncertain” if the conditions
they relied upon would ever be met, “even if the contract had
continued in full force.”
The final question before the appeals court was whether the
licensor could enforce certain penalty rights on termination.
Again, the court found in its favour, ruling that the licensee lost
its benefits by having “imperilled its licence as a whole, by
acting in breach.”
