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Pirates, Transformers and lawyers, oh my!
[June 03, 2007]

Pirates, Transformers and lawyers, oh my!

(Seattle Times, The (KRT) Via Thomson Dialog NewsEdge) Jun. 3--What happens when Transformers do battle with pirate ships? The patent attorneys are guaranteed winners.

Two mainstays of the Seattle area's prolific game industry, Wizards of the Coast and WizKids, are locked in legal combat over a new category of pastimes they've dubbed "constructible strategy games."

In a business where millions of fickle, card-collecting youngsters can turn a bunch of $3.99 game packs into a runaway hit, the stakes could be large.

The fight was joined last week when WizKids sued in federal court here. It seeks a ruling that "Pirates of the Spanish Main," a successful WizKids "constructible" series where players deploy a variety of colorful ships and sea monsters assembled from bits of plastic foam, doesn't infringe a patent recently awarded to Wizards.

Meanwhile, Wizards this weekend is releasing its first published game of that type, tied to the upcoming Transformers movie. Cars and robots -- enough said.

Both pioneering companies seem to be struggling to recapture past success.

Wizards, which invented the collectible playing-card genre with its classic game "Magic: The Gathering," has had setbacks since being acquired by Hasbro in 1999 for $325 million. Four years later it shuttered its 60 retail stores, and sued Nintendo over losing the Pokemon card-game franchise.

The smaller WizKids is also down. When acquired by Topps three years ago for $28 million, WizKids was hot, thanks to HeroClix, a line of miniature figurines based on Marvel and DC Comics, with powers that changed as they engaged in combat.

But regulatory filings by Topps show WizKids had an operating loss of about $1.5 million in the latest fiscal year as sales slid below $16 million, down from $27 million the previous year. Founder Jordan Weisman stepped down as CEO last summer.

And just last week a group opposing Michael Eisner's bid to buy Topps wrote that "the poor financial performance of WizKids ... is clear evidence of Topps' inability to perceive trends and to take advantage of meaningful opportunities."

Back to the litigation. Wizards filed for the constructible-strategy patent in 2003, though it hasn't sold such a game until now. WizKids says the patent is invalid, and claims the company has been damaged by two years of litigation threats from Wizards. Both sides say they can't talk about the lawsuit.

"Wizards was the innovator of the trading-card game, WizKids was the innovator of collectible miniature games, and now they are both trying to claim they are the innovator of the constructible strategy game," says James Mishler, editor of Comics & Games Retailer, a trade publication for specialty shops.

"They've always had a rivalry with the collectible miniature games, but this issue with the patent and the lawsuit is bringing it to a new level."

Boeing, EADS rev up campaign for tankers

One of the most dangerous jobs for a reporter in D.C. is covering the Boeing-EADS war over the pending Air Force refueling-tanker contract, dodging near-daily barrages of news releases and updates from both companies.

They don't miss a chance to tout each step: We learned, for instance, that in April, Boeing's 767 tanker was able to retract its left and right Wing Aerial Refueling Pod (WARP) hoses for the first time.

Ahead of next fall's expected decision on the roughly $30 billion prize, both Boeing and the North American subsidiary of Airbus parent EADS have now stepped up their lobbying and politicking.

Boeing recently began a grass-roots campaign in 18 states that will have a major stake in a win for the company. The message: Jobs.

This week the company brought out The Terminator himself, California Gov. Arnold Schwarzenegger, who lauded Boeing's announcement that producing the 767 tanker would benefit the state's economy with more than 4,000 jobs.

The Hill, a newspaper covering Congress, reported that the jobs figure that Boeing is dangling in its "grass-roots" pitch is now 44,000, more than double its estimate last year.

Boeing says the new numbers reflect suppliers, too.

Boeing is famously close-mouthed about its lobbying, and won't say which lawmakers it is talking to. But a spokesman in D.C. says: "We are stressing what we believe to be the strong points of our offering ... [including] "the many American jobs our program will create and sustain."

Airbus-EADS has its own message: We're an American company. In early May, the company imported CEO Tom Enders from Germany to speak at the U.S. Chamber of Commerce. EADS spokesmen say Enders has also met with more than a dozen congressional delegations from Utah to New York. He's even shaken hands with some politicians from the Washington delegation at a couple of Hill receptions.

EADS' Hill campaign emphasizes that it already has the U.S. military's imprimatur: a $2 billion contract win last June to make light-utility Lakota helicopters.

Now EADS, in partnership with Raytheon, is anxiously waiting word on the contract to make the Joint Cargo Aircraft (JCA) for the Army and Air Force. With a total of nearly 100 planes, that contract is worth $4 billion to $5 billion, but symbolically it may be worth even more.

Their competition is the consortium of the Italian firm Alenia, L3 of New York, and Boeing. The Defense Acquisition Board met Wednesday at the Pentagon to discuss JCA and plan their initial message to members of Congress before a public announcement this coming week.

No word yet on who's won.

-- Alicia Mundy

Rami Grunbaum: [email protected]

Online resources

Pirates, Transformers and lawyers

WizKids lawsuit (PDF)

Wizards of the Coast patent (PDF)

WizKids' Pirates site

Wizards of the Coast's Transformers site

Boeing, EADS rev up tanker campaigns

67 tanker would benefit California economy

EADS Refueling Boom System logs over 70 flight test hours

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