Chapterhouse wins case against GW

[kidterminal]

Winston & Strawn LLP issue a press release on the case:

June 17, 2013

Winston & Strawn Defeats Hundreds of Trademark and Copyright Infringement Claims on Behalf of Pro Bono Client

Cutting-Edge Decision Protects Industries from Litigation Blocking Add-On Products

CHICAGO, IL – In a classic David-versus-Goliath battle, Winston & Strawn LLP represented Chapterhouse Studios LLC on a pro bono basis in a cutting-edge federal trademark and copyright dispute in the Northern District of Illinois (Games Workshop Limited v. Chapterhouse Studios LLC 1:10-cv-8103). The verdict of this jury trial, held in June 2013 before Judge Matthew Kennelly, confirms that copyright and trademark law should not be used to block add-on products. Winston & Strawn has litigated the case since 2010, and co-counsel law firm Marshall Gerstein joined the matter in 2012.

“This was a classic case of trademark and copyright bullying by a much bigger Plaintiff,” said Jennifer Golinveaux, partner in Winston & Strawn’s San Francisco office. “I am proud of the investment made by the firm, and the many attorneys who devoted themselves to making sure the intellectual property laws were not misused to squash a much smaller player.”

Games Workshop manufactures Warhammer 40,000, a tabletop battle game that works with armies of miniature figures and vehicles, while Chapterhouse sells customized add-on parts for the figures and vehicles used in the game. The United Kingdom-based Games Workshop, a company with $200 million per year in revenues, alleged more than 200 claims of copyright and trademark infringement against Chapterhouse, a small business run out of an individual’s garage in Texas. Games Workshop argued that it was seeking a complete shutdown of Chapterhouse’s entire business and although Games Workshop initially sought over $400,000 in damages, by the end of the two-week jury trial, the plaintiff dropped its damages demand to only $25,000.

The jury deliberated for more than two days and found that Chapterhouse could continue to make and sell over a hundred products without fear of copyright infringement. The jury also confirmed that Chapterhouse could continue to use most of Games Workshop’s asserted trademarks when selling compatible parts, including all nine of Games Workshop’s registered trademarks. Together with the summary judgment wins, the jury’s verdict confirmed Chapterhouse can continue to make and sell 111 products that Games Workshop hoped to block using copyright laws, and can continue to use 104 words and phrases that Games Workshop said were trademarked.

Imron Aly, lead trial attorney and partner in Winston & Strawn’s Chicago office added, “It was a pleasure to represent a small entrepreneur like Nicholas Villacci of Chapterhouse, who has a passion for his work and wanted to see his business survive.”

Julianne Hartzell, partner at co-counsel law firm Marshall Gerstein added, “We are proud that we were able to help protect Chapterhouse against the overreaching claims made by Games Workshop in such a substantial trademark and copyright dispute.”

(Taken from BOLS legalwatch)

This isn't about Infinity but it is an important issue for the gaming community as a whole.

[Crushar]

WOW...good for Chapterhouse.

[Pierzasty]

Good for the hobby. Healthy competition is always good, and even if they don't overcome GW, I'd like to see them keep the giant on its toes.

(Yes, I'm aware it applies to Infinity as well. But CB has set a much higher standard to beat and has much healthier business practices)

[kidterminal]

Good for the hobby. Healthy competition is always good, and even if they don't overcome GW, I'd like to see them keep the giant on its toes.

(Yes, I'm aware it applies to Infinity as well. But CB has a much higher standard to beat )

CB isn't bullying the companies supporting it's game the way GM is.

[VisOne]

To be fair CB is a small company/entity with no CEO who is cobtractly obligated to turn a profit each quarter/half or year. Their business practices cannot be compared reasonably.

That said GW and large companies of their ilk using litigation as a way bullying competing small companies out of the industry is highly inappropriate. Their down turn in sales and take up is their fault not chapter houses.

[Arachas]

GW is completely missing the point here. It's been long since they gave a crap about the people who play their games. It's been long since FUN was the most important part of their business. These days it's about keeping the stock holders happy. This is the reason I've quit GW games completely.

GW has a bad reputation for cracking down on any kind of copyright infringement, no matter what the scale. HUZZAH for Chapterhouse and their MAJOR victory. I hope it's set a precedence for other cases.

[Pacific]

Kind of glad CHS have won, just because GW seems to have been throwing their weight around so much the last few years. A lot of it is unwarranted - Spots the Space Marine for instance, that kind of crap has to stop and they've rightfully received ire from well beyond the boundaries of wargaming. I bet the legal companies were queueing up to help CHS.

Completely agree with your point Arachas, don't play GW stuff any more but its kind of sad how things changed with the transformation into a big, publicly owned company. They're still releasing stuff, but for me it just lacks 'soul'. Hard thing to describe exactly, but my mate put it down as being akin to the difference between John Lennon and Paul McCartney.. there may be a performance, but it feels forced, by the numbers and lacking a certain something.. I kind of see where he was coming from.. !

[Magno]

Kind funny that GW has been making millions on copying other IP.
Everyone copies to an extent, but I find it bothersome that GW is trying to be the only one allowed that.

[valthonis]

Kind funny that GW has been making millions on copying other IP.
Everyone copies to an extent, but I find it bothersome that GW is trying to be the only one allowed that.

Excellent news for Chapterhouse!

Though Magno makes an interesting point, it would be interesting to see someone challenge GW for copying IP and win.

[Mob of Blondes]

I had not read the lawyers' press release, but the following list instead:

Copyright Claims
160 claims alleged against CHS
-GW won on 1/3 of the claims, including items such as CHS' Powerfists
-CHS won on 2/3 of the claims, including the use of the underlying shape and size of GW Shoulderpads.

General Trademark Claims
9 claims alleged against CHS
-CHS won all 9 claims, including either no infringement, or fair use of the GW trademarks on CHS' website.

Disputed Trademark Claims
21 disputed trademark claims alleged against CHS
CHS won 11 claims
GW won 10 claims

GW Trademarks ruled "Previously Used in Commerce" Claims
61 claims alleged against CHS
CHS won 35 claims
GW won 27

Notable Trends and Individual Products Under Dispute
CHS lost on some individual products including:
-Doomseer
-Dark Elf Arch Tortress

CHS won on some individual products including:
-Jetbike
-Super-heavy walker model
-Lizard Ogre

Damages Awarded:
CHS ordered to pay GW damages of $25,000 USD

Yes, I agree it's a kick to GW incredible arrogance & hypocrisy and proof that add-ons or similar products are legal, but not a huge win just a partial win. Of course, probably it costed more money to GW than they 25000 get.

[valthonis]

I don't know how big Chapter House is, but can they afford to give GW $25,000? Or am I reading the "CHS ordered to pay GW damages of $25,000 USD" wrong?

[VisOne]

No your not the publicly saying chapter house won is wrong.

In reality they did not the simply have not being forced to cease all trading as was GW intent.

They will still need to pay damages but luckily they will continue to operate with only some products being dropped from the range due to the court upholding GW claims of copy right infringement.

[Lampyridae]

Yet another very public black eye for GW. Though this one wasn't as bad as Spots the Space Marine - that one made the Beeb website.

Of course, this will only make their legal department even more aggressive.

[Magno]

GW has shareholders and their shareholders demand profits.
Ok, but who are their shareholders?
I can't imagine GW is a hot ticket that the general public goes after. Most people haven't heard of Games Workshop.
Mutual Funds probably aren't chomping at the bit to place GW on their portfolio.
I think a good chunk of the shareholders are probably GW players themselves. There have been a few initiatives in the past where the player base tried to rally and protest against GW by buying up all their shares.

When you are driven by your shareholders or are trying to appease your shareholders, your business is in trouble.
You should be focusing on satisfying your customers, expanding and strengthening your market.

[valthonis]

When you are driven by your shareholders or are trying to appease your shareholders, your business is in trouble.
You should be focusing on satisfying your customers, expanding and strengthening your market.

That was my thought, but if you're focusing on satisfying the customers, expanding and strengthening the market, wouldn't their be potential profits for the shareholders? Or is this just a matter of "Make money as far as fast as you can with as little spending as possible"?

[Mob of Blondes]

The list of big shareholders is public information by law, which add to 54.4%.

The shareholders who hold over 3% of the total ordinary share capital of Games Workshop Group PLC, are as follows:

Code: Select all

Shareholder                             Number of shares  Percentage
The Nomad Investment Partnership LP        4,341,141         13.7
Investec Asset Management Limited          3,087,765          9.7
Ruffer LLP                                 2,492,260          7.8
Tom Kirby                                  2,131,394          6.7
Phoenix Asset Management Partners Limited  1,865,218          5.9
FIL Limited                                1,753,900          5.5
Artemis Investment Management LLP          1,620,001          5.1


Information correct at 21 June 2013

Kirby is CEO and chairman, long ago before getting into games companies he was inspector of taxes. So one of the shareholders is in the place to make decissions. And the rumor is that he wants to retire rich in some years.

[kidterminal]

The list of big shareholders is public information by law, which add to 54.4%.

The shareholders who hold over 3% of the total ordinary share capital of Games Workshop Group PLC, are as follows:

Code: Select all

Shareholder                             Number of shares  Percentage
The Nomad Investment Partnership LP        4,341,141         13.7
Investec Asset Management Limited          3,087,765          9.7
Ruffer LLP                                 2,492,260          7.8
Tom Kirby                                  2,131,394          6.7
Phoenix Asset Management Partners Limited  1,865,218          5.9
FIL Limited                                1,753,900          5.5
Artemis Investment Management LLP          1,620,001          5.1


Information correct at 21 June 2013

Kirby is CEO and chairman, long ago before getting into games companies he was inspector of taxes. So one of the shareholders is in the place to make decissions. And the rumor is that he wants to retire rich in some years.

GW has made it into small cap mutual funds, the stock opened today at 737.50, its 52 week spread is 551.10 - 740.00 this makes it attractive to mutual funds because they want to hold stocks that are increasing value. GW is constantly pushing their stock price up through yearly price increases, switching to finecast(dirt cheap compared to metal but charging twice the price) moving plastic production to China and firing lots of people.

Chapterhouse is run out of the owner's garage and sells conversion parts of 40k miniatures. Here is their site you can see for your self what they make. http://www.chapterhousestudios.com/
Now I received an announcement from the War Store that they are closing down their bits division. IMO this seems like GW making an effort to swash or control the bits business. Now I don't know about other parts of the world, but here in America converting is a big part of the 40k community. A community that corporate GW has been completely ignoring for years. Chapterhouse's copyright fair use victory ensures that they and companies like them can continue to produce original bits for converters.

[valthonis]

Well if GW gets rid of bits you'll have to buy another whole box for the bits you want, at least that is my guess at their logic.

[kidterminal]

Well if GW gets rid of bits you'll have to buy another whole box for the bits you want, at least that is my guess at their logic.

Yes I think is similar to their logic behind making most new releases direct order through their web store.

[valthonis]

Well if GW gets rid of bits you'll have to buy another whole box for the bits you want, at least that is my guess at their logic.

Yes I think is similar to their logic behind making most new releases direct order through their web store.

Hope for their customers sake they don't look at Ticketmaster as an example and start charging fees for the privilege of ordering from them...

[Pierzasty]

Code: Select all

Shareholder                             Number of shares  Percentage
The Nomad Investment Partnership LP        4,341,141         13.7


Ah, Tunguska is involved. Speaks a lot about GW's downfall, then.

[Mob of Blondes]

I hadn't noticed.

[Lampyridae]

[McNamara]

Code: Select all

Shareholder                             Number of shares  Percentage
The Nomad Investment Partnership LP        4,341,141         13.7


Ah, Tunguska is involved. Speaks a lot about GW's downfall, then.

That was exactly my thought too, as soon as I had read it.

[Pacific]

Hahah yes..

Well if GW gets rid of bits you'll have to buy another whole box for the bits you want, at least that is my guess at their logic.

I wonder if they are trying to do away with the idea of converting and modelling entirely, to promote the buyer just getting a box set, painting it (or preferably not) and then buying the next one. In fact, I wouldn't be surprised at all if the 'spoilt little brat' reaction to the CHS affair was to make a load of future releases either all Finecast or single piece plastics that are almost impossible to convert, "that'l' show them" to the 0.4% of their revenue stream that converts their models using 3rd party parts.

[kidterminal]

Hahah yes..

Well if GW gets rid of bits you'll have to buy another whole box for the bits you want, at least that is my guess at their logic.

I wonder if they are trying to do away with the idea of converting and modelling entirely, to promote the buyer just getting a box set, painting it (or preferably not) and then buying the next one. In fact, I wouldn't be surprised at all if the 'spoilt little brat' reaction to the CHS affair was to make a load of future releases either all Finecast or single piece plastics that are almost impossible to convert, "that'l' show them" to the 0.4% of their revenue stream that converts their models using 3rd party parts.

They haven't been promoting converting in the WD for a long time now. You may well be correct. Is converting still big in Britain?

[Pierzasty]

single piece plastics that are almost impossible to convert

We've converted single-piece white metal, how bad can plastic be?

And what can they do to prevent converting? Disallow conversions at official tournaments...oh wait, they don't organize them anymore

[Pacific]

I agree with you in a sense, although it's more about creating a pervading atmosphere and the way that the 'hobby' is carried out. When I first got into wargaming, converting was a BIG part of the process. Eavy metal barely had a standard miniature in it, there were loads of kitbashes and it was something that was encouraged at every part of the process. I think it was key to GW, in terms of tapping in to creativity and making something, and it's another aspect of how they have lost their 'soul'.

Sad thing (and even this is going back some years) - a kid who saw my Pre-Heresy World Eaters army "So what are those, White Scars?" "No", I replied, "World Eaters". He asked why they were white, and I explained because that was their old scheme during pre-heresy. And the punch-line "why don't you just paint them like the ones on the box?".. It's a really sad state of affairs..

[Caius]

Sad thing (and even this is going back some years) - a kid who saw my Pre-Heresy World Eaters army "So what are those, White Scars?" "No", I replied, "World Eaters". He asked why they were white, and I explained because that was their old scheme during pre-heresy. And the punch-line "why don't you just paint them like the ones on the box?".. It's a really sad state of affairs..

I have the issue that my Salamanders get confused for Dark Angels. I also have a friend who has the frustrating problem that bystanders to his games think his Crimson Fists are Ultramarines. People really need to learn the subtle colour variations in Space Marine armour

I don't see why people are so very defensive over Chapterhouse though. I suspect the reason GW went after them has more to do with things like "The Doom of Malan'tai" and "Tervigon Conversion Kit" appearing on their website than that they made things that were compatible with 40K. If they started making kits like "Clockwork Angels", "Prime Axiom" or "Special Agent Ko Dali" they would also fall under other companies' radar. People have been making 28mm scale bits for years without inviting litigation and it would have continued to happen irrespective of the result of this case.

I'd like to see though exactly what they had to take down. Looking at their website now I can't find some things that were mentioned earlier but I also don't know what was there before to get a complete list.

There's a nice podcast on Bell of Lost Souls that covers the issue if anyone is interested. They have two IP lawyers who discuss some of what happened in the case. http://www.belloflostsouls.net/2013/06/ ... vs-gw.html

[Section9]

GW has shareholders and their shareholders demand profits.
Ok, but who are their shareholders?
I can't imagine GW is a hot ticket that the general public goes after. Most people haven't heard of Games Workshop.
Mutual Funds probably aren't chomping at the bit to place GW on their portfolio.
I think a good chunk of the shareholders are probably GW players themselves. There have been a few initiatives in the past where the player base tried to rally and protest against GW by buying up all their shares.

When you are driven by your shareholders or are trying to appease your shareholders, your business is in trouble.
You should be focusing on satisfying your customers, expanding and strengthening your market.

No, most of GW is held by large investors. Mutual funds, pension funds, that kind of thing.

Problem is not even that the CEO owns 6.7%. The problem is that the CEO is making decisions by gut feeling, and not looking at any numbers to back up his gut.

If I owned a significant chunk of GW shares, I'd be talking to each of the other major shareholders and arranging a nasty boot-to-CEO, for mismanagement. Unfortunately, I don't, and GW is a UK company for legal stuffs, so the standard of proof is very different.