MLB Loses $ 2 Million Judgment Due To In-Game App

A New York City jury on Tuesday awarded $ 2 million in damages to Sports Technology Applications (STA), a California-based sports software company that contracted with MLB Advanced Media to develop an application in the game.

STA has established that MLBAM, the Internet and interactive media arm of MLB, broke the deal. STA also convinced jurors that MLBAM had engaged in fraudulent acts by working with a rival to develop a similar app.

Justice Joel cohen presided over the litigation, which lasted for seven years and involved numerous court cases. MLBAM parent company Major League Baseball declined to comment, citing an ongoing dispute.

In the lawsuit, each side strongly insists that the other has effectively “dropped the ball” in the performance of their respective duties.

In 2012, MLBAM and STA signed a seven-year license agreement under which, on a non-exclusive basis, MLBAM granted trademarks and other intellectual property rights to STA. The app, which court documents alternately refer to as “Victis” and “Sage,” involved challenging friends to see who was best at predicting the hitters, pitchers and managers’ upcoming games. Virtual caps and jerseys were given to the winners. MLBAM has agreed to promote the app through websites and social media, with at least 1 million impressions per year. In the third year of the deal, STA is said to be close to making a series of payments totaling $ 5 million.

As sometimes happens in trade agreements, the expectations of each party have not been met. The frustrations grew until the two sides ended up – and acrimoniously – severed the ties.

MLBAM court records offer a narrative that describes STA as inept. MLBAM insists that STA “has never been able to monetize its app or earn more than pennies” and “has never paid MLBAM a dime,” let alone $ 5 million. MLBAM also complains that STA released the app nearly five months late, towards the end of the 2013 regular season. To make matters worse, MLBAM argues, the app suffered from a host of technical issues, including server outages. MLBAM acknowledges that it refused to promote the application as aggressively as the contract requires. However, this explains why this was due to a shorter delay caused by the arrival of the application at the end of the season. STA closed the app after the season.

The documents filed by STA tell a radically different story. The company describes MLBAM as engaged in dishonest business strategies that have prevented a viable relationship. First, STA’s main contact at MLBAM was a vice president of games who was simultaneously “a member of the board of directors of PrePlay, a direct competitor of STA”. Second, STA says it learned that MLBAM itself was “a significant shareholder of PrePlay”, thus suggesting that MLBAM was a double game.

Towards the end of the 2013 regular season, STA says it received a letter from PrePlay claiming that STA was infringing PrePlay’s intellectual property. Indeed, MLBAM had granted PrePlay what STA describes as an “exclusive license for a gaming application” – a set of rights for which MLBAM had licensed STA on a non-exclusive basis. STA accuses MLBAM of having to disclose its relationship with PrePlay.

MLBAM strongly disagrees, stressing that it had no obligation to disclose. MLBAM also claims that STA executives were familiar with the PrePlay application, “which became available in 2012 – over a year before the STA game launched – and that STA employees and directors downloaded it. and knew how it works “. The STA argues that this defense misses what it sees as a more central point: MLBAM has provided PrePlay “with an exclusive license. before the STA license has been executed.

Jurors sided with STA, which was represented by Damien Prosser and other Morgan & Morgan lawyers. MLBAM, which was represented by Alan Littman of Goldman Ismail and other attorneys, can appeal.

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