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Game Companies Sue Yahoo!

Tuesday, in what is the first online retailer lawsuit brought forth from the games industry, Nintendo of America, Sega of America, and Electronic Arts filed a joint action against Yahoo! for the sale of illegal and counterfeit video game products. The companies cooperatively seek an injunction that will cease auctions and sales of counterfeit video games and illegal devices the collective believes have been designed in spite of copyright protection. The suit also seeks compensation for the companies for the losses incurred from the illegal sale of their products online through Yahoo!

Lawyers for the big three allege that Yahoo! directly profits from the sale of said products and furthermore that the company is "fully aware of the illegal activity and has the resources and technological means to prevent it." Under current law, Yahoo! is liable for the facilitation of such counterfeit goods.

Nintendo of America Inc.'s general counsel, Richard Flamm, said in a press release today that his organization has advised Yahoo! "many times" of the easily identifiable counterfeit goods and that the online retailer has refused to implement what NOA considers to be effective controls for such activity.

Ruth Kennedy, senior vice president, general counsel of Electronic Arts supports Flamm's position in stating, "We strongly support the growth of e-commerce and the right of companies such as Yahoo! to conduct legitimate business on the Internet, but this part of their business model is neither acceptable nor legitimate."

The joint suit charges Yahoo! "with copyright and trademark infringement, offering illegal devices for sale to the public, and unfair competition." Furthermore, the companies contend that Yahoo! is knowledgeable of the illegal activity and that the organization profits from revenue generated by its auction and retail activities.

Yahoo! representatives declined to comment on the action because they hadn't seen suit at the time of publish. We'll have more soon.