Mindgames, Inc. v. Western Publishing Company, Inc.

218 F.3d 652 (7th Cir. 2000)

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Nature of the Case

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Facts

P was formed in March of 1988 by Larry Blackwell to manufacture and sell an adult board game, 'Clever Endeavor,' that he had invented. The first games were shipped in the fall of 1989, and by the end of the year, 75 days later, 30,000 had been sold. In March of 1990, P licensed the game to D, a major marketer of games. D had marketed the very successful adult board games 'Trivial Pursuit' and 'Pictionary' and thought 'Clever Endeavor' might be as successful. D was required to pay P a 15 percent royalty on all games sold. During the first year of the contract, D sold 165,000 copies of 'Clever Endeavor' and paid MindGames $600,000 in royalties. Sales then fell precipitously, but the parties continued under the contract through January 31, 1994, though Western did not pay the $900,000 ($1.5 million minus $600,000) that the contract would have required it to pay in order to be entitled to extend the contract for a year after its expiration. In February of 1994, the parties finally parted. P sued seeks $900,000, plus lost royalties of some $40 million that P claims it would have earned had not D failed to carry out the promotional obligations that the contract imposed on it, plus $300,000 on the theory that D renewed the contract for a third year, beginning in February of 1994. The district court granted summary judgment for D. The contract did not entitle P to a renewal fee and that Arkansas's 'new business' rule barred any recovery of lost profits. P did not seek nominal damages and lost a chance to obtain significant attorneys' fees, to which Arkansas law entitles a prevailing party in a breach of contract case. P appealed.