MindGames, Inc. v. Western Publishing
United States Court of Appeals for the Seventh Circuit
218 F.3d 652 (7th Cir. 2000)
MindGames (plaintiff) was the manufacturer of a board game called Clever Endeavor. In 1990, it licensed the game to Western Publishing (Western) (defendant) in a contract that required Western to pay a 15 percent royalty on all games it sold. The contract was to last until January 1993, and could be extended for another year if Western paid MindGames at least $1.5 million either as part of its royalty payments or otherwise. Beyond that, the contract could be renewed in subsequent years if Western paid an annual renewal fee of $300,000. In the first year of the contract, Western paid $600,000 in royalties and a total of 195,000 copies of the game were sold. After that, sales started to decline. The relationship and contract between the companies continued until January 31, 1994 and the companies officially split up in February 1994. However, Western did not pay anything after its initial $600,000 payment. MindGames brought suit, seeking, among other things, lost royalties in the amount of $40 million that MindGames claimed it would have earned if Western had lived up to the terms of the contract, including requirements that Western effectively market the game. The district court granted summary judgment in favor of Western. MindGames appealed.
Rule of Law
Holding and Reasoning (Posner, J.)
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