History of Ms. Pac-Man legal issues

This page details the complex legal history and litigation surrounding the Ms. Pac-Man property.
== Background ==
In 1981, a group of MIT students (led by Doug Macrae and Kevin Curran) began operating a small arcade in a dorm room. Noticing low profit drops in the arcade's Missile Command machines, Macrae and Curran - having high programming knowledge - decided to hack the game into an enhanced form. This led to the creation of an "enhancement kit" titled "Super Missile Attack"; this kit would run the newly-developed hack when connected to a Missile Command circuit board. Following Super Missile Attack's creation, the MIT group formed a new company known as General Computer Corporation (henceforth "GCC") to sell the kits.
In August of 1981, Atari gained knowledge of the Super Missile Attack game; GCC was promptly sued by Atari, with a counter-lawsuit following. Due to various factors, the lawsuit would be dropped; in agreement with Atari, GCC's team was employed to work at the company. Unknown to Atari, however, GCC was secretly developing a similar enhancement kit for Namco's Pac-Man as well.
GCC's Pac-Man kit was finalized as "Crazy Otto", and was effectively finished for release. However, part of GCC's settlement with Atari was that they could no longer produce any "enhancement kits" for games, even non-Atari works. As such, Crazy Otto was pitched directly to Bally Midway (henceforth "Midway") - the American distributor of Pac-Man at the time - for official release. Midway, growing impatient waiting for Namco to produce a Pac-Man sequel themselves, decided to license the game for official release. Following a brief demonstration to Namco of Japan's president, Masaya Nakamura, the game was fully licensed and approved by all three parties. The game would go on to release in early 1982, now under its final form: the iconic Ms. Pac-Man.
However, legal problems regarding Ms. Pac-Man would soon arise. Due to the three separate parties involved, numerous conflicts and points of confusion caused serious issues for the Ms. Pac-Man IP - which have only worsened throughout the decades.
== General Computer Corporation vs. Midway lawsuit (198x) ==
Shortly following Ms. Pac-Man's release, some form of legal dispute occurred between Midway and GCC. This case was seemingly entirely private, and no proper documents from the case are publicly available. Through a series of recounts, however, a handful of details are known.
The case mainly regarded the royalty contract held between Midway and GCC; in which, it seems that GCC was demanding a refined royalty plan. Midway's original agreement stated that GCC would earn royalties for all Ms. Pac-Man arcade machines produced; this was in addition to the whopping 50 percent of royalties that went straight to Namco.
The matter was eventually settled around 1983; though by all recounts, the royalty plan effectively stayed the same. Under the revised agreement, GCC would earn royalties from any Ms. Pac-Man "coin-operated machine" sold; this did not include any home console ports or merchandise. In addition, it was decided that the rights to the Ms. Pac-Man IP itself - including both copyrights and trademarks - would eventually be transferred to Namco. In or around 1987, all Ms. Pac-Man rights therein became the property of Namco; save for GCC's royalty contract, which would only be applied to coin-operated games.
Prior to this lawsuit period, GCC was developing a new Pac-Man sequel titled "Pac-Baby" (not to be confused with the already released Baby Pac-Man). This game was delayed due to the litigation, though would eventually release as Jr. Pac-Man in 1983.
== The GCC Successors vs. Namco lawsuit (200x) ==
Following Namco's acquisition of the Ms. Pac-Man property, Namco began utilizing the Ms. Pac-Man brand widely. This included using the character in derivative works (such as Ms. Pac-Man Maze Madness), alongside numerous console ports of the original arcade game. Ms. Pac-Man was present in almost all Pac-Man media released from the early 90s to the mid-2000s, in some shape or form.
In 2000, to commemorate the 20th anniversary of both Ms. Pac-Man and Galaga, a new arcade machine was developed bundling both games together. Commonly known as the "20 Year Reunion" or "Class of 1981" machine, this was among the first times a Ms. Pac-Man machine was produced by Namco themselves, with no involvement from Midway or GCC. This caught the attention of Kevin Curran, who saw one of the machines at a rest stop; Curran claims his first thought was, "Where's my royalty check?".
A decision to file litigation against Namco was formed by the successors of GCC. As with the 1980s lawsuit, the full court documents are not accessible publicly. However, Steve Golson (another key programmer from GCC) has described the case details at a 2016 presentation he held, titled "Classic Game Postmortem: Ms. Pac-Man".
Kevin Curran contacted Namco, as well as other former staff from GCC, in 2002. Namco, by GCC's own accounts, was flat-out unaware of the GCC royalty contract; given that it had been almost 20 years since it was formed, with most Namco employees from that era no longer working there. Negotiations between the GCC successors and Namco began shortly thereafter; though after roughly four years of no progress, GCC demanded an arbitrator to settle the matter.
The original contract - which had in no way been updated since 1983 - was analyzed by the court. The arbitrator noted that GCC's royalties, judging by the text, explicitly applied to "coin-operated games". At this time, Namco generally sold Ms. Pac-Man cabinets in two forms: models with coin slots, and "home" models without coin slots (meaning they were free to play). Because of this, the court ruled that GCC could only receive royalties for the coin-operated models, and not those without the function.
However, due to a strange case of wording in the contract, a bizarre ruling was made. The contract defined "electronic distribution" of Ms. Pac-Man as "[...] any use in which [the game] is broadcast or in any other way transmitted [to] other receiving devices." With such broad wording, the arbitrator felt this would qualify for numerous things; in particular, devices such as cell phones and products with general internet connectivity. Generally speaking, while not directly coin-operated, these devices can usually accept payments (e.g. via credit card) as well. The newest game consoles at the time - and pretty much all game systems going forward - would also apply to this.
In turn, this effectively meant that the majority of general electronic goods, by modern standards, would apply to earn royalties via the GCC contract. Had the contract been renegotiated sooner, this wording likely would have been changed as technology advanced; but as it stood, GCC was legally owed royalties for practically any new release of Ms. Pac-Man, save for those on arcade machines without coin slots.
=== Aftermath (pre-AtGames) ===
Following the lawsuit, the Ms. Pac-Man property was no longer utilized much by Namco. The game would continue appearing on "home model" arcade machines, and a handful of standalone ports were produced (with royalties paid to GCC for their release). However, the Ms. Pac-Man character was completely absent from new Pac-Man media, such as Pac-Man and the Ghostly Adventures. Some re-releases of older Pac-Man games, namely Pac 'n Roll Remix and Pac-Man Arrangement (2005 version), removed portions of the game where Ms. Pac-Man appeared.
Additionally, the game no longer appeared in any compilations, such as the Namco Museum series; this is reportedly due to the royalty cost being so high that, if Ms. Pac-Man were to be in a collection, the profit margins would be extremely low. The game was released for the original Pac-Man Museum, but it was as a separate $5 (USD) DLC; presumably so GCC's royalties would be a smaller cut of profit.
During this period, there were a handful of Pac-Man products and promotions which attempted to use a "look-alike" to Ms. Pac-Man, so as to represent her without paying the royalties. Two notable instances of this include "Pac-Marie" from Pac-Store, and "Pac-Man Girl" from Mega Run meets Pac-Man. Both characters retain the iconic hairbow, but change its color to bright pink and yellow, respectively; among other minor design changes. It is unclear as to why the Ms. Pac-Man character applies to the royalties, given that the royalties mainly applied to the original arcade game; though the GCC successors have implied that they hold royalty rights to the character as well.Steve Golson: "And then that got into, 'well who's idea was it to have a female character?'; when [Midway/Namco was] doing all these 'family' Mr. and Mrs. Pac-Man [games...], doesn't the Mrs. part belong to us?". Doug Macrae: "And we made it pretty clear to [Midway/Namco] though, that they could not do [a Pac-Man game] without us if they included the Pac-Family [...] and that's still being done in court years later." - "Steve Golson - From Crazy Otto to Ms. Pac-Man", timestamp 53:55 (https://youtu.be/HlopaTBDYuo?t=3235)
Towards the later 2010s, Namco began licensing the Ms. Pac-Man property to several toy and "plug & play" game manufacturers. Three notable licensees were Super Impulse, Basic Fun, and My Arcade - who released several self-contained Ms. Pac-Man handhelds, that served as loopholes with the GCC contract. The handhelds were based on NES-like technology, and as such, were unable to "transmit" anything; thus being void of royalties.
== AtGames dispute ==
In August of 2018, Bandai Namco Entertainment (henceforth "Namco") and the GCC successors agreed to renegotiate the Ms. Pac-Man royalty contract. For roughly a year, Namco was still in active talks with GCC; with a formal, written agreement by Namco being signed by most, if not all, of the GCC successors.
However, things took a drastic turn in the Summer of 2019. On July 26th, Namco was alerted by an unknown party that AtGames Holdings, Ltd. had begun interfering with the GCC successors. AtGames is a "plug & play" game manufacturer, who previously released licensed Pac-Man products. Notably, AtGames released the infamous Bandai Namco Flashback Blast!; which falsely advertised its contents, and led to large consumer backlash.
According to the unknown affiliate, AtGames was attempting to "obtain arcade rights" for Ms. Pac-Man from GCC. Namco quickly contacted AtGames regarding this, to which they denied the allegations; though strangely, kept shifting future conversations with Namco to be about Ms. Pac-Man. AtGames later sent an e-mail to Namco, claiming that they "did not claim to be licensed by Bandai Namco for Ms. Pac-Man products"; and later, that they did not know anything about this "strange partner" (referring to GCC).
On August 19th, 2019, Namco was able to contact Kevin Curran. From Curran himself, Namco learned that AtGames, despite their denial of doing so, had contacted GCC regarding Ms. Pac-Man. AtGames had also sent Curran a counterfeit Ms. Pac-Man arcade machine; manufactured by AtGames themselves, this "Legends Compact" machine was not approved by Namco at all, who had outright denied several proposals related to it previously.
It appears that, shortly following Namco's discussion with Curran, AtGames purchased the Ms. Pac-Man royalty contract from the GCC successors; without Namco's approval (in fact, with their express disapproval). This occurred mere days before Namco's negotiations to resolve their agreement with GCC would have taken effect. AtGames reportedly paid $10,000,000 (USD) for the contract, a price supposedly "substantially higher" than any buyout offers from Namco.
Following this, AtGames began advertising Ms. Pac-Man products to retailers like Walmart and GameStop. Judging from Namco's testimony, AtGames was seemingly trying to rush the unauthorized Ms. Pac-Man machines out to retailers, under the assertion that they held the legal right to do so. Even with the GCC contract in hand, however, Namco still owned all trademarks and copyrights related to Ms. Pac-Man; with AtGames only holding the royalty contract.
=== Bandai Namco vs. AtGames lawsuit (2019-2020) ===
Namco was quick to file suit against AtGames, in which AtGames also counter-sued. Unlike the prior two lawsuits, the case was largely available to the public (its case number is 3:19-cv-05898), with only a few documents being sealed towards the end of the lawsuit. While partially focused on Ms. Pac-Man, much of the lawsuit was in regard to the "Bandai Namco Flashback Blast!" console; for information on the "Blast!" litigation, see History of Pac-Man clones and bootlegs - AtGames systems.
One day after the lawsuit's filing, AtGames reiterated the claim of acquiring "Ms. PAC-MAN-related rights" in a press release. Alongside this, a slew of news articles from various outlets - much higher than that of the prior lawsuits - were posted covering the lawsuit, a majority of which were vocally critical towards AtGames.
On October 31st, AtGames made their first formal response to Namco. In addition to denying various claims, AtGames showed an e-mail sent by Namco shortly before the lawsuit. Taking place slightly before AtGames' rights acquisition, Namco demanded that AtGames rescind its offer to GCC, or else Namco would permanently remove AtGames as a business partner. This was followed by a bold claim: Namco ensured that "AtGames' investment will be useless", and would make sure that "there is zero income stream delivered pursuant [to the] agreement". Effectively speaking, with AtGames' purchasing of the rights, Namco was ready to stop using the Ms. Pac-Man IP altogether; save for the established loopholes.
The case was somewhat elongated due to the COVID-19 pandemic, with many court dates being missed. Eventually, on October 28th, 2020, Namco and AtGames settled out of court. The details of the settlement are largely unknown; it is known that AtGames was given permission to continue selling the "Bandai Namco Flashback Blast" system(s), but any information regarding the Ms. Pac-Man royalties was undisclosed.
=== Aftermath (post-AtGames) ===
Slightly before the lawsuit's settlement, Namco announced that a series of Ms. Pac-Man Arcade1UP machines would be released. Being that Arcade1UPs are strictly arcade machines without coin slots, this is a clear use of the loophole. Over a dozen different Ms. Pac-Man Arcade1UP models have been released thus far, in various form factors.
Past the Arcade1UP releases and some non-electronic merchandise, however, Ms. Pac-Man has all but disappeared. Beginning in 2022, Namco began outright replacing Ms. Pac-Man in re-releases of other Pac-Man games. This practice was first seen in the Arcade Archives version of Pac-Land, which altered the Ms. Pac-Man graphic to have her hairbow covered up by a hat; Baby Pac-Man received similar alterations. It is assumed this will continue in future Pac-Man installments; with titles such as Pac-Man Museum + and Pac-Man World Re-Pac featuring the hat-wearing Ms. Pac-Man under the name of "Pac-Mom".
Beginning in the latter half of 2022, numerous Ms. Pac-Man releases were delisted from digital storefronts; this included the iOS and Android ports of Ms. Pac-Man, which had remained available for over a decade beforehand. Even some loophole-applying Ms. Pac-Man products have seemingly had their production halted, including certain My Arcade and Super Impulse systems. Multiple other Pac-Man and Namco products of these types remain available; indicating the issue is solely related to Ms. Pac-Man.
Presumably, the "Pac-Mom" character, as well as the numerous delisted and discontinued products, indicate that the AtGames conflict was not truly settled in Namco's favor. It would seem that AtGames still holds, and intends to collect, GCC's royalties; though more than ever before, Namco intends to prevent there from being even a single cent of profit pursuant towards it.
== Trivia ==
*While generally considered a dire event for the Pac-Man franchise, there were a handful of historical benefits related to Pac-Man caused, in part, by the various Ms. Pac-Man lawsuits. This includes a plethora of information on Crazy Otto/Ms. Pac-Man's development, numerous other development insights, and the full publishing of the "Characters and Logo Style Guide - Pac-Man" licensee book from 1992.
*In claims somewhat unrelated to both main portions of the lawsuit, AtGames claimed in the 2019 case that a Ms. Pac-Man "Blast!" console was once in the works, and was properly approved by Namco. However, the console was never released; and in reality, Namco merely said that they were "okay with" the concept, with no further discussions past that.
*Another lawsuit against AtGames, the plaintiff being Walgreen Co., was filed only a few weeks before Bandai Namco's lawsuit against them. In this case, AtGames failed to follow a "guaranteed-sale basis" for selling their products at Walgreens; refusing to pay for roughly $1.5 million USD of unsold stock.
== References ==
Category:Game Information