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Pecover et al v. Electronic Arts Inc.
U.S. District Court, Northern District of California
Case No. 08-cv-02820 CW,  Filed June 5, 2008


A settlement has finally been reached in the lengthy battle over Electronic Arts' football video games.  In 2008, plaintiffs sued Electronic Arts alleging that Electronic Arts violated several antitrust and restraint of trade laws by entering into exclusive licensing agreements with the NFL, NFL Players Association, AFL, NCAA, CLC, and ESPN.  Through these licensing agreements, the plaintiffs alleged that Electronic Arts excluded competitors from entering the football video game market and was able to inflate prices due to its monopoly in violation of several antitrust and fair trade laws including California's Cartwright Act, Cal. Bus. & Prof. Code Sec. 16720, et seq., California's unfair Compettiion Law, Cal. Bus. & Prof. Code Sec. 17200, et seq., and the federal Sherman Act, 15 U.S.C. Sec. 2.  Plaintiffs claimed that Electronic Arts entered into exclusive licensing agreements as a response to competition from Take-Two Interactive Software, Inc. that offered discount pricing.  In December 2009, Plaintiffs filled a motion to certify the class that was granted by Chief Judge Walker who certified a nationwide class that includes "[a]ll persons in the United States who purchased Electronic Arts' Madden NFL, NCAA or Arena Football League brand interactive football software, excluding software for mobile devices...with a release date of January 1, 2005."

To give you an idea of how extensive this case became, Class Counsel analyzed and reviewed more than 2 million pages of documents produced by Electronic Arts and third parties and took 22 depositions, and responded to 1,295 requests for admission during discovery.  Experts were brought in by both parties who  produced "two lengthy reports involving economic analyses of the parties' claims and defenses" exploring such topics as the economic implications of Electronic Arts' exclusive licenses.  During this discovery period, Plaintiffs and Defendants participated in the first of two mediations, however no agreement was made.  During the second mediation that took place on May 4, 2012, the parties reached this settlement agreement.  As part of the settlement agreement, Electronic Arts agreed to pay $27 million into a settlement fund.  In addition, Electronic Arts can no longer enter or renew an exclusive trademark license with the AFL for 5 years, nor can Electronic Arts renew an exclusive collegiate football trademark license with the CLC that is set to expire in 2014.  Part of this settlement agreement also prohibits Electronic Arts from entering any new exclusive trademark license with the NCAA, CLC, or NCAA member institution covered by the exclusive license for "a period of 5 years thereafter."  The agreement also allows counsel for plaintiffs to request fees up to 30 percent of the fund not exceeding $2,000,000, and that Electronic Arts would not "oppose a request for attorney's fees and costs within these limits."

For Class Members seeking to get compensation out of the Net Settlement Fund (the amount left over in the fund after other costs have been deducted), they can expect payments according to the type of video game purchased.  For example, after filing a claim form, a class member who purchased a Sixth Generation Title is entitled to a cash payment of "up to $6.79 per unit purchased, up to a maximum of eight units ($54.32)."  Comparatively, a purchaser of a Seventh Generation Title is only entitled to $1.95 per unit up to $15.60 for 8 units.  If the Net Settlement Fund does run out, then the parties will identify other Sixth Generation purchasers who have not filed a claim form through addresses that they had provided to Electronic Arts.

If you are seeking more information on this case or the settlement agreement, you can visit www.easportslitigation.com.

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