response objection

GEARBOXS RESPONSE TO DEFENDANTS MOTION TO COMPEL Page 1 of 21

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

GEARBOX SOFTWARE, LLC, Plaintiff, v. APOGEE SOFTWARE, LTD. d/b/a 3D REALMS ENTERTAINMENT and INTERCEPTOR ENTERTAINMENT APS, Defendants.

CIVIL ACTION NO. 3:14-CV-00710-L JURY TRIAL DEMANDED

GEARBOXS RESPONSE TO DEFENDANTS MOTION TO COMPEL INTERROGATORY RESPONSES

Plaintiff Gearbox Software, LLC (Gearbox) submits this Response to the Motion to Compel

Interrogatory Responses filed by Defendants Apogee Software, LTD d/b/a 3D Realms Entertainment

(3DR) and Interceptor Entertainment APS (Interceptor) (collectively, Defendants), and would

respectfully show the Court as follows:

INTRODUCTION

This is a straightforward case about Defendants unlawful development and marketing of one

videogame that infringed on Gearboxs intellectual property rights and violated a contract. That contract is

the Asset Purchase Agreement (the APA or the Agreement), which was executed by Gearbox and 3DR

in February 2010. Under the terms of the APA, 3DR transferred all of its all rights and interest in 3DRs

three-decade old Duke Nukem video game franchise to Gearbox. In the Agreement, 3DR retained very

limited rights to pre-existing Duke Nukem games that were either created before or in development on the

APAs closing date. In short, the Agreement prescribed that 3DR would retain the right to market a small

piece of Duke Nukems past, while Gearbox controlled all of the brands future. Only three years after

executing the APA, however, Gearbox discovered that 3DR and its accomplice, Interceptor Entertainment,


had conspired and colluded to create a new unauthorized Duke Nukem game in violation of both Gearboxs

intellectual property rights and the terms of the APA.

Now, in an effort to make this case about everything but their own development of an infringing

work, Defendants have tried to force Gearbox through countless unduly burdensome discovery-related

hoops not remotely calculated to lead to the discovery of admissible evidence. Among other things,

Defendants have demanded Gearbox undertake the impossible and irrelevant task of identifying every

single plot line, character, theme, story element, or other trait that has ever existed in the 25-year history of

the Duke Nukem video game franchise. Further, Defendants have asked Gearbox to describe the

development of video games Defendants developed and released years before Gearbox was even founded

as a company.

Indeed, surprisingly absent from Defendants Motion to Compel is an acknowledgementor even a

mentionthat Defendant 3DR was the original author, creator, and custodian of the entire Duke Nukem

Universe of IP from its creation in or about 1991 until Gearbox bailed out 3DR from a legal jam and

purchased the Duke Nuken IP in 2010. Thus, Defendants Interrogatories and related Motion to Compel

spend most of their time asking Gearbox to discuss the creation of, or identify elements contained within,

video games that 3DR itself created, developed, and registered trademarks and copyrights inall before

selling the same to Gearbox via the APA.

Accordingly, the notion that 3DR is helpless to determine what this infringement case is about is a

bizarre and hollow statement.1 And the idea that Gearbox is required to identify the creation and

development efforts behind Defendants own video games is absurd. Defendants know exactly what this

lawsuit is about. Gearbox has described with particularity the rights it believes it holds and the manner in

1 Defendants Motion to Compel at p. 14.


which Defendants conduct infringed those rights. Accordingly, Defendants Motion to Compel should be

denied.

BACKGROUND

A. Gearbox and 3DR Execute An Agreement That Saves 3DR and Sells the Rights to Duke Nukem IP to Gearbox. In 2010, 3DR was floundering. It had spent the previous twelve years and millions of dollars trying

and failing to release a sequel to its hit videogame, Duke Nukem: 3D; the new game was to be titled,

Duke Nukem: Forever (DNF). Along with financial disaster, 3DRs failure to release this long-awaited

product resulted in a multi-million dollar lawsuit between DNFs publisher, Take-Two Interactive, and 3DR

related to 3DRs failure to deliver the promised game.

In 3DRs darkest hour, Gearbox threw a life-preserver to 3DR in the form of an Asset Purchase

Agreement (APA).2 The APA was a massive bailout for 3DR. Under the terms of the Agreement,

Gearbox agreed to (i) assume 3DRs liability for the Take-Two litigation3 and (ii) assume all development

responsibilities for 3DRs 12-year fiasco, DNF.4 And, in June 2011less than a year-and-a-half after

executing the APA and fourteen years after 3DR had begun development of DNFthe game was released.

In exchange for this rescue plan, Gearbox acquired 3DRs rights to intellectual property pertaining to Duke

Nukem (the Duke IP).5

3DR retained very limited marketing rights to Duke Nukem property that was created or developed

before the execution of the APA.6 Stated another way, 3DR retained a small piece of Duke Nukems past,

2 A true and correct copy of the APA and Supplement are attached here as Exhibit 1. 3 Id. at Ex. 2.4. 4 Id. at Ex. 2.10. 5 Id. at Ex. 2.1. 6 Id. at Ex. 2.2; see also APA Supplement.


while Gearbox controlled all of the brands future. The rights retained by 3DR were called excluded

assets under the APA. Specifically, Exhibit 2.2 to the APA provides that 3DR would retain certain rights

and interests in Duke Game Property that 3DR had developed pre-closing.7 Further, the APA

Supplementexecuted on the same day as the APAspecifically described these very limited carve-outs

granted to 3DR by Gearbox. The Supplement states, [t]he Agreement makes it clear that everything in the

Duke IP post-Closing belongs to [Gearbox] and those certain assets, which were created and/or developed

prior to the Closing are retained by [3DR].8 Exhibit 1 to the Supplement lists all Duke Nukem games

that were previously released or in development and, accordingly, retained by 3DR.9

In addition to consummating Gearboxs acquisition of 3DRs Duke Nukem IP, the APA also

contemplates the possibility of royalties to 3DR from the sales of the DNF video game. The APA defines

royalties as the percentage of Net Revenues of sales, licenses, rentals, or other exploitation of the Duke IP

paid to [Gearbox] by [Take-Two] after all expenses, including advances to [Gearbox] have been

recouped.10 Importantly, Gearboxs royalty obligations to 3DR begin only after all publisher advances have

been paid back to Take-Two.11 Stated another way, 3DR is third in line. It is entitled to no royalties unless

the net revenue of sales of DNF is sufficient, first, to pay back Take-Two for all advances and, second, to

pay back Gearboxs own expenses related to the development of DNF.

The APA also gives the parties audit rights as a mechanism for enforcing the above royalty

provisions. Specifically, the Agreement states that not more than once during any calendar year [either

7 Id. at Ex. 2.2.

8 Ex. 1, APA Supplement at p. 1 3. 9 Id. at Ex. 1. 10 Ex. 1, APA at p. 7. 11 An advance in the context of video game development is an amount of money paid by a games publisher to the games

developer, before and/or during the games developmentusually when the developer achieves certain development targets or milestones. These advances are then recouped by the publisher through sales of the game after release.


party may] engage an independent auditor to audit those of the other Partys records reasonably necessary

to verify the royalties due.12

B. Gearbox Discovers 3DR and Interceptor Are Developing A New Duke Nukem Game. On February 1, 2014, Interceptor publically announced that it was developing its own version of a

brand-new Duke Nukem game in cooperation with 3DR titled, Duke Nukem: Mass Destruction. Weeks

later, 3DRs principals, Scott Miller and George Broussard, unequivocally acknowledged that these efforts

constituted a violation of the APA and Gearboxs IP rights in the Duke Nukem IP.13 Based on this

unsettling discovery, Gearbox brought suit to enforce the APA and protect its IP rights.

C. Gearbox Has Fully Cooperated In Discovery.

To date, Defendants have served seven sets of Requests for Production, comprising 482

document requests. In response, Gearbox undertook substantial document collection efforts and has

produced thousands of documents. Defendants have also collectively served 37 Interrogatories, to which

Gearbox has provided thorough answers.14

ARGUMENT

A. Gearbox Has Fully And Completely Answered Defendants Interrogatories.

Defendants claim that Gearbox has failed to demonstrate what trademarks and copyrighted

characters are asserted in this lawsuit is patently false. As stated above, this case is about Defendants

own development of one game that infringed the intellectual property rights in the Duke Nukem gaming

universe that Gearbox acquired through one agreementwhich it entered into with Defendant 3DR.

Defendants game improperly made use of Gearboxs IP by incorporating the character Duke Nukem, the

12 Ex. 1, APA at 6.6. 13 See Declaration of Scott Miller and George Broussard, attached hereto as Exhibit 2. 14 True and correct copies of Gearboxs Supplemental Responses to 3DRs First Interrogatories and Gearboxs Responses to Interceptors First Interrogatories are attached here as Exhibits 3 and 4 respectively.


trademarked name Duke Nukem, the trademarked Nuclear Symbol, along with plot, story-elements, and

characters from the Duke Nukem IP that Gearbox now rightfully owns. Gearbox has repeatedly stated this

in its interrogatory answers. Accordingly, Defendants contention that Gearboxs current responses do not

allow it to prepare for trial is absurd.15

1. Gearbox has fully and appropriately responded to 3DRs Interrogatory Nos. 1 and 5.

3DRs Interrogatories No. 1 and 5 are essentially duplicative of each other, asking Gearbox to

identify everything incorporated inor otherwise relating to the Duke Nukem Trademarks and

videogames created by or for [3DR] up to the Closing Date of the APA.16

As an initial matter, the Interrogatories are overly broad and unduly burdensome. Courts limit

discovery if it is unreasonably cumulative or duplicative, or can be obtained from some other source that is

more convenient [or] less burdensome. Fed. R. Civ. P. 26(b)(2)(C)(i). What 3DR inexplicably fails to

mention anywhere in its Motion to Compel is that it was the author, creator, and custodian of the Duke

Nukem IP from its inception in approximately 1991 until the closing date of the APA in February 2010.

Further, the only Duke Nukem game that has been created by Gearbox17 since the Agreements closing

date was Duke Nuke: Forever. Consequently, 3DRs Interrogatories quite literally ask Gearbox to identify

and describe all elements and aspects utilized, incorporated in, or relating to everything we created and

sold to you. These interrogatories are unduly burdensome and amount to excessive discovery that would

result in little to no substantive information useful in or relevant to the defense of the case.

Despite the fact that such information is clearly and more readily available to 3DRthe creator and

author of all Duke Nukem games prior to the Closing DateGearbox undertook to provide a detailed

response listing the materials that passed to Gearbox under the APA. 3DRs Motion wildly misrepresents

15 Motion to Compel at 14.

16 Ex. 3 at Nos. 1 and 5. 17 After finishing 3DRs failed development efforts on the title.


Gearboxs response as stating only that the documents speak for themselves.18 3DR then cites Phillips

as support for the proposition that such a response is inappropriate where ambiguity is an issue.19 In

Phillips, the responders only answer to an interrogatory calling for the identity of the insured party within

an insurance policy was the document speaks for itself.20 Here, Gearbox has provided a lengthy and

detailed answer to both Interrogatories, while maintaining its contention that the APA clearly expressed the

intent of the parties. Among the full contents of its answers, Gearbox asserts:

The Duke Nukem assets that passed from 3DR to Gearbox include all assumed fictional names, trade names, registered and unregistered trademarks, service marks, and applications, all registered and unregistered copyrights in both published and unpublished works

[T]he assets include all items identified in Exhibit 2.1 [to the APA] including all elements and aspects utilized, incorporated in, embodied in or otherwise related to the series of Duke Nukem games created by or for 3DR and;

The elements and aspects include all Duke Nukem game characters, game design documents, story lines, story themes, plots, game script/dialogue, character names and likenesses, and all trademarks and trade names related to the Duke Nukem Universe including all items described in Exhibits 2.7(a(ii)(A), 2.7(a)(ii)(A)(1, 2.7(a)(ii)(C) and 2.7(a)(ii)(C)(1), the assets identified in Exhibit 3.6, and net names described in Exhibit 3.7.21

Consequently, Gearbox has fully answered 3DRs Interrogatory by describing in detail what it

thinks it acquired under the APA and what it believes it owns. Gearbox is not required to exhaustively list

all characters, storylines, plots and themes contained within the 25-year history of the Duke Nukem

franchise. Gearbox has, however, asserted with specificity and particularity its assertion that it acquired the

18 Motion to Compel at 6. 19 Id. at 6 (citing Clark County v. Phillips, 2012 WL 135705 (D.Nev. Jan 18, 2012). 20 Id. at 11. 21 See Ex. 3 (Gearbox Response to Nos. 1 and 3).


universe of Duke Nukem IP, as spelled out in the parties APA. In short, simply because 3DR doesnt like

Gearboxs answers to these Interrogatories do not make them insufficient.

Moreover, Gearboxs reliance on the terms of the parties own written agreement as part of its

answer is entirely appropriate. See Innovative Piledriving Products, LLC v. Oy, 2005 U.S. Dist. Lexis

14744, *9-19 (N.D.Ind. July 21, 2005) (sustaining objection that the document speaks for itself in response

to an interrogatory asking party to set forth [the partys] understanding of the specific terms of a license

agreement) (citing Tropp v. WesternSouthern Life Ins. Co., 2003 WL 688245, at *10 (N.D.Ill. July 18,

2003) ([a]n agreement, when reduced to writing, must be presumed to speak the intention of the parties

who signed it. It speaks for itself, and the intention with which it was executed must be determined from the

language used.) (citations omitted). For all of these reasons, Defendants Motion to Compel as to

Interrogatory Nos. 1 and 5 should be denied.

2. Gearbox has fully and appropriately responded to 3DRs Interrogatory Nos. 2 and 3. Gearbox has answered these Interrogatories fully and to the best of its ability. Further, Gearboxs

objections to the breadth and scope of the information called for by these questions are appropriate and

should be sustained.

Once again, 3DR places Gearbox in the impossible position of trying to identify each character,

copyrightable element and trademark in the universe of the Duke Nukem IP that was developed pre-

closing.22 That is to say, 3DR has again requested that Gearbox identify and describe everything 3DR

created, developed, and controlled up to the time the IP was transferred to Gearbox.

3DRs Motion purports to unilaterally amend these Interrogatories to request only that Gearbox

identify its understanding of what was retained by [3DR] and not sold to [Gearbox] under the APA.23

22 See Exh. 3 (Nos. 2 and 3). 23 Motion at 8. 3DRs recasting of the questions actually posed by these Interrogatories is grossly inaccurate, however. Specifically, Interrogatory No. 3 asks Gearbox


Accordingly, as part of a longer and more detailed answer, Gearbox again stated that the APA and

Supplement speak for themselves and demonstrate what assets transferred from 3DR to Gearbox[.] This

is not an evasive answer because Gearbox contendsas it has all along in this casethat the APA and

Supplement clearly and unequivocally define what was retained by 3DR upon the Agreements execution.

Specifically, Exhibit 2.2 of the APA defines the Excluded Assets as follows:

Further, the APA Supplement exhaustively and explicitly delineated each and every Duke Nukem game

that was previously released or in development, which did not transfer:


Consequently, Gearboxs assertion that the APA clearly defines the assets transferred and

retained by the parties at closing is not insufficient.24 The parties Agreement is clear, concise, and

unambiguous on this point.

Moreover, 3DRs recasting of the questions actually posed by these Interrogatories for the

purpose of its Motion to Compel is grossly inaccurate and misleading. Specifically, Interrogatory No. 3 asks

Gearbox to Identify and describe in detail each character, copyrightable element and trademark in Duke

Nukem 1, Duke Nukem 2, Duke Nukem 3D, Duke Nukem 3D Live, Duke Nukem Critical Mass, and Duke

Nukem Survivor.25 This Interrogatory does not, as 3DR now contends simply ask Gearbox to identify its

understanding of what was retained by 3DR on execution of the APA.26 Duke Nukem was developed and

released by 3DR in 1991, Duke Nukem 2 in 1993, and Duke Nukem 3D in 1996. Gearbox was founded as

a studio in 1999. Additionally, the remaining titles listed within this Interrogatory were all part of the

substantive agreements (APA and Supplement) Excluded Assets as listed above. Consequently, it is not

incumbent on Gearbox to tell 3DR all copyrightable elements and trademarks within its own games. Nor is

the litany of information requested by 3DR within these Interrogatories relevant or likely to lead to the

24 Oy, 2005 U.S. Dist. Lexis at *9-19.

25 Ex. 3 (No. 3). 26 Motion at 8.


discovery of admissible evidence. Consequently, Gearboxs answers are complete and its objections

should be sustained.

3. Gearbox has fully and appropriately responded to 3DRs Interrogatory Nos. 6, 7, and 9 by 3DR and Interceptor Interrogatory No. 9.

3DR casts these Interrogatories as seeking identification of the copyrighted characters and

trademarks [Gearbox] asserts and how they are infringed.27 Gearbox has fully provided that information

via its responses to these Interrogatories.

3DR improperly relies on Fareri and RDF Media to support the proposition that Gearbox has not

specifically identified what it contends was infringed by Defendants in this case.28 But the responding

parties actions in those cases are not at all analogous to Gearboxs responses here. In Fareri, the plaintiff,

when asked to identify the protected elements of his work and the basis of the allegation of substantial

similarity to the allegedly infringing work, responded only that the information is obvious and merely

referred the defendant to architectural plans as evidence of similarity.29 In RDF, the district court granted a

motion to dismiss a claim for trade dress infringement because the plaintiffa TV show producerasked

the Court to recognize [a TV show] itself as the trade dress subject to protection in lieu of identifying any

infringed mark.30

Here, Gearbox has identified the infringed trademarks and copyrights-at-issue both in its Complaint

and in the referenced Interrogatory Responses. For example, 3DRs Interrogatory No. 9 requests Gearbox

27 Once again, 3DR attempts to re-characterize the inappropriate and overbroad nature of the questions-at-issue in furtherance

of the underlying motion. For example, Interrogatory No. 6 calls for Gearbox to describe in detail all game characters, game design documents, story lines, story themes, plots, game scripts/dialogue, character names and likenesses, and all trademarks and trade names directly related to the Duke Nukem Universe. Gearbox is not required to list every plot, character, story, and theme from 3DRs two-decade catalogue of Duke Nukem games. 28 Motion at 11 (citing Cris v. Fareri, 2011 U.S.Dist. LEXIS 143028, *4 (D.Conn. Dec. 13, 2011); RDF Media, Ltd. v. Fox Broad. Co., 372 F.Supp.2d 556, 562 (C.D.Cal 2005). 29 Fareri, 2011 LEXIS at *4. 30 RDF Media, 372 F.Supp.2d at 562-63.


identify all facts that support your contention that Defendants have infringed the Allegedly Infringed

Marks.31 Gearbox gives a substantial and lengthy answer spanning several paragraphs and citing to

documents and deposition testimony demonstrative of Defendants infringement. Further, Gearbox states

as follows:

[A]fter reviewing the [infringing product] being created and marketed by Defendants, Duke Nukem Mass Destruction, it is clear that Defendants wrongfully incorporated numerous protected and protectable elements of Gearboxs Duke Nukem IP, thereby infringing same. Further and more specific examples of Defendants infringement contained within the Mass Destruction title are contained in Gearboxs response to Interrogatory No. 11.

Importantly, in response to Interrogatory No. 11, Gearbox provides a direct, side-by-side comparison of

Gearboxs protected and protectable material with Defendants infringing work.32 As an example, below is

an excerpt of Gearboxs response to Interrogatory No. 11:

31 Ex. 3 (No. 9).

32 Id. at No. 11.


Consequently, Gearboxs Responses are complete, thorough, and sufficiently identify the

copyrighted characters and trademarks and how they have been infringed by Defendants conduct. The

Defendants Motion to Compel should be denied.


4. Gearbox has fully and appropriately responded to 3DRs Interrogatory Nos. 13-15 and Interceptors Interrogatory Nos. 3-6.

3DRs Interrogatory Nos. 13-15 and Interceptors Interrogatory Nos. 3-6 are burdensome and

overly broad, irrelevant and immaterial to the present action. Accordingly, Gearboxs responses to the

interrogatories are sufficient and its objections should be sustained.

3DRs Interrogatory Nos. 13-15 all relate to the three versions of the DNF game that Gearbox

completed development on and released in 2011.33 In discovery, Gearbox has produced the full

registrations for each of the versions of the DNF game as well as the deposit materials for each copyright.

Defendants strangely allege that Gearbox has somehow shirked its discovery obligations by refusing to

supply a copy of all the copyrighted works for review.34 As discussed at length above, all pre-2010 Duke

Nukem games were created or developed by Defendant 3DR. Consequently, by supplying via discovery

responses a copy of the DNF game, Gearbox has produced the only Duke Nukem game that it has ever

developed.

Additionally, the exclusion language contained within the referenced Copyright Registrations

which Defendants now ask Gearbox to expand onis sufficient because it provides a description of the

material excluded from the Copyrights. Accordingly, the answer is not evasive or nonresponsive.

Interceptors Interrogatory Nos. 3 through 6 are equally irrelevant, overbroad, and unduly

burdensome. Interrogatory Nos. 3 and 5 call for Gearbox identify and describe in detail all preexisting

material identified with respect to Registration No. PA 795737 and each work referenced in section 2a of

the application. The 737 Copyright is for Duke Nukem 3D Shareware, is dated August 8, 1996, and was

33 Copyright Nos. PA1-782-911, PA1-812-111, and PA1-814-677. The copyrights reference the versions of the game for the Xbox, PlayStation, and Personal Computer. 34 Motion at 15.


signed by 3DRs principal, Scott Miller.35 In response to this Interrogatory, Gearboxa studio that was

founded three years after the 737 Copyright was registeredanswered, in part, that the Copyrights

exclusion language speaks for itself. Gearbox then identified that such preexisting material included the

Duke Nukem Character in Duke Nukem I and Duke Nukem II and includes the characters audio and

visual likeness, portrayal, design, story lines, plots, game script/dialogue, and other characteristics

associated with the Duke Nukem character in association with its representation in the Duke Nukem I and

Duke Nukem II games. This response is complete and sufficient.

Interceptors Interrogatory Nos. 4 and 6 are equally objectionable and Gearbox has provided as full

a response as is possible or necessary. Both questions call for Gearbox to expound upon 3DRs own

language when registering Copyright No. 795738.36 Once again, Defendants ask Gearbox to expound on a

Copyright Registration document from 3DR; specifically, the Defendants 1996 registration of Duke Nukem

3D. Gearbox has answered the interrogatory fully by pointing to the controlling language within the

Copyright itself.

Gearbox is not required to conduct a detailed comparison of all pre-existing Duke Nukem works

and pre-APA Duke Nukem Games with those created afterwards. Further, Gearbox is not required to go

back two-decades and re-write or re-interpret 3DRs own Copyright registrations and applications. Further,

the Copyright registrationsassigned to Gearbox pursuant to the APAspeak for themselves and

constitute the best evidence of the material Gearbox contends in this lawsuit that the under the APA it

acquired all copyrights to pre-2010 games. Accordingly, it is irrelevant whether the rights Gearbox asserts

in this infringement action are those it acquired at execution of the APA or those it created afterwards.

35 A copy of the 737 Copyright is attached here as Exhibit 4. 36 A copy of the 738 Copyright is attached here as Exhibit 5.


Finally, Defendants assertion that Gearbox has not fulfilled its duty to identify what is infringed is

bizarre. Gearbox, through its numerous answers to other interrogatories that actually call for that

information, has identified with particularity what it contends Defendants have infringed and how that

infringement occurred.37 Consequently, Defendants Motion to Compel should be denied.

5. 3DRs Interrogatory No. 20 and Interceptors Interrogatory No. 10 are objectionable. Defendants have asked Gearbox to describe in detail the creation and development of each of the

allegedly infringed works [including] an identification of each person who participated or collaborated in any

way in creation of the allegedly infringed works, and a description of what subject matter each person

created.38 These interrogatories are overly broad, unduly burdensome, and not reasonably tailored to lead

to the discovery of admissible evidence.

As an initial matter, even if it were an appropriate line of inquirywhich it is notGearbox could

not answer these interrogatories. Defendant 3DR created and developed the entire suite of Duke Nukem

IP as its own from 1991 until 2010at which time it sold and assigned the rights to Gearbox via the APA.

Further, DNF, the one Duke Nukem game which Gearbox created, was in development with 3DR for nearly

12 years prior to execution of the APA. Consequently, the notion that Gearbox could describe in detail

the creation and development of each of the Duke Nukem games that Defendants product-at-issue

infringes while identifying each person who participated or collaborated in that creative process is absurd.

Defendants inappropriately point to the Life Music case for the proposition that Gearbox must

divulge who created the works and when (as if the matter were a mystery).39 In Life Music, the Plaintiff

failed to abide by a court order commanding answers to certain interrogatories concerning authorship of

37 See Ex. 3 (at No. 11).

38 3DR Interrogatory No. 20 and Interceptor Interrogatory No. 10; Motion to Compel at 16. 39 See Motion at 16 (citing Life Music, Inc. v. Broad. Music, Inc., 41 F.R.D. 16 (S.D.N.Y. 1966).


songs that the plaintiff owned rights to.40 Here, Gearbox is not in a position to, and thus cannot, describe

3DRs own development effort on numerous Duke Nukem-related titles that was undertaken an executed

prior to the execution of the APA.

Moreover, Gearboxs completion of 3DRs failed project, Duke Nukem Forever, is not relevant to

any claim or defense in this case. It is undisputed that Gearbox holds valid and registered copyrights in

Duke Nukem Forever and those materials have been produced in this case. Consequently, the question of

authorship or registration is not at issue. Further, inquiry into Gearboxs development to completion of DNF

is overbroad and not likely to lead to the discovery of relevant evidence. Again, this lawsuit is not about

Duke Nukem Forever; rather, it is about Defendants breach of contract and infringement of IP rights

acquired by Gearbox via the APA. Defendants efforts to have Gearbox describe its efforts to complete a

video gamewhich would likely include identifying hundreds of programmers, testers, employees, and staff

who may have assisted with development efforts, while simultaneously providing a narrative of the games

completionis not relevant to the underlying issues in this case. Moreover it is burdensome and

harassing. Defendants Motion to Compel should be denied.

6. 3DRs Interrogatory No. 22 is objectionable.

In Interrogatory No. 22, 3DR seeks to do an end-run around the APAs audit and royalty provisions

by requiring Gearbox to disclose expenses incurred related to the development of Duke Nukem Forever.

The Interrogatory is overbroad and not likely to lead to the discovery of admissible evidence in this case.

The parties APA is clear. It provides that a party will have the right, not more than once during

any calendar year, to engage an independent auditor to audit those of the other Partys records reasonably

necessary to verify the Royalties due. Defendants Motion incorrectly states that answering the

Interrogatory requires a single royalty calculation required by the APA.41 Rather, what the APA actually

40 Life Music, Inc., 41 F.R.D. at 28. 41 Motion at 17.


permits is that the auditing party may, once per calendar year, engage an independent auditor to audit

those of the other partys records reasonably necessary to verify the Royalties due.42

In April 2014, 3DR engaged the accounting firm of KPMG to conduct a royalty audit. Gearbox

asserts it has fully complied with that audit and has produced records demonstrating that no royalties are

due. 3DR alleges Gearbox has not complied with the audit. 3DRs attempt to use an Interrogatory as a

means to conduct its own audit of Gearboxs expenses outside the scope and boundaries set forth in the

APA is improper and harassing. Consequently, the Interrogatory is unduly burdensome insofar as it

purports to require Gearbox to provide sensitive financial accounting and information outside the scope

prescribed by the parties underlying Agreement.

Further, the Interrogatory is not reasonably tailored to lead to the discovery of admissible evidence.

The issue in this case is whether Gearbox complied with the audit process as contemplated under the APA

by providing 3DRs auditor with records reasonably necessary to verify royalties. Under the APAas

stated aboveGearbox was only required to provide 3DRs auditor with records reasonably necessary to

verify royalties. The APAs definition of Royalties is specific: it is the percentage of net revenues of sales,

licenses, rentals, or other exploitation of the Duke IP paid to [Gearbox] by [the publisher, Take-Two] after all

expenses, including advances to [Gearbox] have been recouped.

In short, Take-Two is first in line and must recoup all advances it paid to Gearbox for developing

DNF. Gearbox is second in line; any royalties from Take-Two must first cover all its incurred expenses

related to DNF. 3DR is third in lineonly after both Take-Two and Gearbox are made whole does 3DR

come due any royalties.

As part of its cooperation with 3DRs auditor in 2014, Gearbox procured publisher royalty

statements from Take Two demonstrating that even Take Two had not yet recouped its advances to

42 APA at 6.6 (emphasis added).


Gearbox for DNF. Because Take Two has not recouped, Gearbox has not received any royalties and it is

impossible for 3DR to be owed any royalties. Consequently, the Interrogatoryby asking for data that is of

no relevance to the current existence of royalties to 3DRis not reasonably tailored to lead to the

discovery of admissible evidence.

Accordingly, Defendants Motion to Compel should be denied.

CONCLUSION

For the reasons set forth herein, Gearbox respectfully requests this Court deny Defendants Motion

to Compel in its entirety.


Dated: May 1, 2015 Respectfully submitted,

By: s/ Jonathan E. Clark

Stephen E. Fox Texas Bar No. 07337260 [email protected] Jonathan E. Clark Texas Bar No. 24069515 [email protected] POLSINELLI PC 2501 N. Harwood Street, Suite 1900 Dallas, Texas 75201 Telephone: 214.397.0030 Facsimile: 214.397.0033 Attorneys for Plaintiff Michael E. Schonberg Texas State Bar No. 00784927 [email protected] Megan Dredla Hoyt Texas State Bar No. 24050530 [email protected] THOMPSON & KNIGHT LLP One Arts Plaza 1722 Routh Street, Suite 1500 Dallas, Texas 75201 Telephone: 214.969.1304 Fax: 214.880.3262

ATTORNEYS FOR PLAINTIFF GEARBOX SOFTWARE, LTD.


CERTIFICATE OF SERVICE

I hereby certify that on May 1, 2015 the foregoing document was filed with the clerk for the U. S.

District Court using the electronic case filing system of the Court. The electronic case filing system sent a

Notice of Electronic Filing to the following attorneys of record who have consented to accept this Notice

as service of this document by electronic means:

George R. Schultz [email protected] Nicole R. Marsh [email protected] Schultz & Associates, P.C. 5400 LBJ Freeway, Suite 1200 Dallas, Texas 75240

s/ Jonathan E. Clark Jonathan E. Clark

response objection

Documents

defendants motion

llc gearbox

defendants interrogatories

defendants apogee software

preexisting duke nukem

related motion

duke nuken ip

d realms entertainment