From: mavra@cpac.washington.edu (Peter D. Adkison)
Subject: Palladium/Wizards of the Coast Lawsuit
Organization: Wizards of the Coast, Inc.
Date: Thu, 17 Dec 1992 18:46:51 GMT


On June 17th, 1992, Palladium Books and Kevin Siembieda jointly and
severably filed a lawsuit against Wizards of the Coast.  There were
six causes of action, all associated with references to Palladium's
trademarks and rules in our book, The Primal Order (TPO).  The six
causes of action were:

1.	Federal Trademark Infringement.  They allege that we improperly
	used their trademarks without permission.  We have admitted that
	the trademarks in question are theirs and that we used them without
	permission, however we do not agree that we used those trademarks
	improperly because we can cite case law that indicates that it is
	okay to use someone else's trademarks when the sole intention is
	to use those marks to identify what those marks are referring to.

2.	False Designation of Origin.  That our use of their trademarks on
	the cover of our books is likely to confuse purchasers, leading them
	to believe that there is some sort of association between Palladium
	and WotC.  We feel that since we have our own marks on the book,
	along with disclaimers to the contrary, that no likelihood of 
	confusion exists.

3.	Unfair Competition.  That our use of their trademarks is intended
	to unfairly lure Palladium customers into believing that TPO is an
	authorized supplement to Palladium products.  We do not feel that 
	they have any evidence to support this assertion.

4.	Common Law Trademark Dilution.  That our use of their trademarks
	erodes the value and distinctiveness of those marks.  They feel
	that our products are so inferior to theirs that we're making them
	look bad.  We think that's ridiculous.

5.	Michigan Consumer Protection Act.  That our conduct will cause
	irreparable harm to the plaintiffs.  We don't feel that this law
	even applies here because the consumer protection act is designed
	to protect consumers, not businesses.

6.	Copyright Infringement.  That TPO contains material that is original
	copyrighted material of the plaintiffs.  We disagree.  The only
	Palladium material we referred to is terms and definitions.  Terms
	and abbreviations are not copyrightable, and definitions aren't
	either because they're statements of fact.  There is also case
	law that supports game rules as not copyrightable.  All that's
	copyrightable is the form an expression, and since we rewrote the
	definitions in our own words, that's not an issue.

We would have shared this information with the public some time ago
except that we were hoping to resolve this in a friendly manner with
minimal expense or bad press for either party.  On December 14th there
was a preliminary hearing where we attempted to get the entire case
thrown out of court.  The hearing was only partially successful
(motions 4 & 5 were dismissed) and it looks like the chances of
avoiding a long and costly trial are now minimal.

Even though the legal support for our position is clear and we expect
to win at trial, defending ourselves in this trial will be a long and
costly process.  We have studied the cost projections carefully and if
our current stock solicitation meets with reasonable success I think
we'll be able to weather this storm.  The cost of defending ourselves
so far has already slowed us down considerably, and I think you'll
find that 1993 will probably see us coming out with a fairly slow
production schedule and a smaller presence at major conventions.  But,
assuming the continued growth of our capsystem and Talislanta lines, I
think we'll still be around in 1994--and with a legal precedent under
our belts our opportunities for growth in 1995 and beyond will be very
strong.

This posting is to inform you, the gaming public, about this case--it
is *not* intended to defame Palladium Books or Kevin Siembieda.
Palladium has come out with some fine products over the years, which
makes this battle all the more painful for me personally.  Some of
their books on castles, weapons, and armor are the best put out in
this industry and were a major inspiration for us in our development
of the capsystem concept.  Feel free to copy this message and show it
to others, but if you do be sure and copy the message in its entirety
(I suppose followups on Usenet could be an exception) so that people
will know that I am not slandering Palladium or Mr. Siembieda, but am
simply stating the facts of the case and our own opinions on some of
the issues.

This is a very important case for the gaming industry.  The issue at
stake is simply this: can one company develop material that is usable
with another company's game system.  And when I say "usable" I mean
usable to the extent that there are specific references to the other
company's game rules so that players and game masters are clear about
how to use the material.  This is common practice in several
industries, but for some reason in the gaming industry it's looked
down on by some people.

What do you think?  Do you think that we at Wizards of the Coast
should abandon our capsystem line and start producing yet more
roleplaying games for a market that is already (IMHO) glutted with
them, or should we try and use this case to establish a precedent that
would encourage this sort of cross-company referencing?

				--Mavra!
				  Peter D. Adkison
				  Janitor, Wizards of the Coast
				  mavra@wizards.com

The above internet address should be used for e-mail if it is
different from the e-mail address in the header.