Arbitration Clause Can Result In Amending An Agreement To Realize Its "Essence"

Timegate Studios, Inc. v. Southpeak Interactive, LLC et al.

Due to fraudulent conduct and an "extraordinary" breach of a development agreement, the U.S. Court of Appeals for the Fifth Circuit reversed a district court's vacatur of an arbitrator's award granting a perpetual license to a video game's intellectual property. Timegate Studios, Inc. v. Southpeak Interactive, LLC et al., Case No. 12-20256 (5th Cir., Apr. 9, 2013) (Davis, J.).

In June 2007, Timegate Studios entered into an agreement with Gone Off Deep LLC d/b/a Gamecock Media Group (later acquired by Southpeak Interactive LLC) to develop and market a futuristic military-style video game entitled "Section 8." Per the agreement, Timegate was required to design and develop the video game, and Gamecock was to provide most of the investment funding for the game's development and was also primarily responsible for manufacturing, marketing, distributing and selling the game after its release. The agreement