Blue Planet Software v. Games Int’l

Citation: Blue Planet Software, Inc. v. Games Int’l, LLC, 334 F.Supp.2d 425 (S.D.N.Y. 2004).

Factual Background
While employed at the Computer Center of the Academy of Sciences of the U.S.S.R., Alexey Pajitnov “created, named and developed Tetris in 1984 and 1985, now recognized as one of the most popular videogames in the world.” As a Soviet citizen, Pajitnov was unable to exploit the game, but he was allowed to permit its exploitation by the Soviet government.

In 1986 Pajitnov did just that by granting rights to his employer, the CCAS; yet this is where the story gets messy. CCAS claims it was granted Tetris’ rights in perpetuity while Pajitnov claims he limited the grant to ten years. This grant was confirmed by numerous conflicting agreements, letters and registrations. The only thing clear about these subsequent affirmations is that Pajitnov excluded the merchandising rights from the

original grant and subsequently executed an operative legal document assigning Tetris’ merchandising rights to CCAS with no time limitation.

Complicating the matter further, CCAS subsequently granted its rights (whatever they were at the time) to “the then export agency of the Soviet Union. . . Soviet Elorg, to act as CCAS’s licensing agent for transactions abroad.” Further, in March of 1989, Soviet

Elorg granted Nintendo Entertainment Systems an exclusive worldwide license for five years. As the time limit approached on both the Nintendo grant and Pajitnov’s alleged limited grant to CCAS, both Pajitnov and Soviet Elorg “prepared to retake control over the Tetris property rights in accordance with their respective views on the duration of the original grant by Pajitnov.”

In an effort to resolve the issue, Pajitnov and Soviet Elorg, through their newly created corporate entities Blue Planet Software and Games International, agreed to create a new partnership called The Tetris Company that would hold the ownership rights that each party contended it possessed.

Trial Court Decision
Disputes within The Tetris Company arose and Pajitov withdrew. He requested a preliminary injunction to prevent Soviet Elorg from casting a “substantial cloud on the title of the property.” Soviet Elorg counterclaimed for the same.

Judge Sidney H. Stein denied both preliminary injunction requests because “each side finds some support for its reasonable and respective ownership claims” and thus “it cannot be said at this point in the litigation that either side is likely to succeed on the merits. . . .”

Judge Stein found the original grant from Pajitov to CCAS to be ambiguous and thus will use the parties’ intent to resolve the ambiguity, later in the case. Further, the judge noted that both trademark and copyright registrations, which Soviet Elorg completed and claimed proved its ownership, are prima facie evidence of ownership yet they don’t supersede contractual agreements and thus aren’t controlling.

However the subsequent merchandising rights assignment was not ambiguous. Therefore that agreement controls, and Judge Stein granted Soviet Elorg’s preliminary injunction request to prevent Pajitnov from interfering with Tetris’ merchandising rights.