Electronic Arts Inc. et al v. Giant Productions et al Doc.

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Case 3:06-cv-03403-JSW Document 22 Filed 12/08/2006 Page 1 of 10

1 KEKER & VAN NEST, LLP

R. JAMES SLAUGHTER - #192813
2 RYAN M. KENT - #220441
710 Sansome Street
3 San Francisco, CA 94111-1704
Telephone: (415) 391-5400
4 Facsimile: (415) 397-7188

5 Attorneys for Plaintiffs

ELECTRONIC ARTS INC. and ELECTRONIC ARTS MUSIC
6 PUBLISHING, INC.

8 UNITED STATES DISTRICT COURT

9 NORTHERN DISTRICT OF CALIFORNIA

10 SAN FRANCISCO DIVISION

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12 ELECTRONIC ARTS INC., a Delaware Case No. C06-3403 JSW

Corporation, and ELECTRONIC ARTS
13 MUSIC PUBLISHING, INC., a Delaware APPLICATION FOR DEFAULT
Corporation, JUDGMENT
14
Plaintiffs,
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v.
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GIANT PRODUCTIONS, a French
17 Corporation, NAJIB MARC REGHAY, an
individual, and ALEXANDRA BERTHET, an
18 individual,

19 Defendants.

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381878.04 APPLICATION FOR DEFAULT JUDGMENT

Case No. C06-3403 JSW
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1 I. INTRODUCTION

2 Plaintiffs Electronic Arts Inc. and Electronic Arts Music Publishing, Inc. (collectively

3 “EA”) hereby request that the Court enter default judgment in this matter against Defendants
4 Giant Productions, Najib Reghay, and Alexandra Berthet.
5
More than six months have passed since EA filed its Complaint on May 24, 2006—and
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since Defendants waived service—and yet, no Defendant has filed a responsive pleading.
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During this time, EA has diligently served all orders and pleadings on French counsel for
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Defendants, including the Initial Scheduling Conference Order, the Requests for Entry of
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Default, the Clerk’s Notices of Entry of Default, and EA’s Separate Case Management
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11 Statement. EA has received no response. Accordingly, EA sought—and the Clerk entered—

12 default against each of the Defendants in this case. Pursuant to Federal Rule of Civil Procedure

13 55(b)(2), this Court should now enter default judgment against Defendants, and for the reasons
14 set forth below, order all of the relief that EA seeks in its Complaint.
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II. FACTUAL BACKGROUND
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EA develops, publishes and distributes interactive entertainment software products,
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including FIFA 2005—an interactive soccer simulation game. As a part of such games, EA
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often licenses and otherwise acquires the rights to certain sound recordings which it incorporates
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into game play during operation of the game. See Compl., ¶ 11. In January 2004, EA held a
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special competition during the 38th International Music Market (MIDEM) conference wherein
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participants in the conference competed to have their songs selected for potential inclusion in
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EA’s FIFA 2005 game and soundtrack thereto. Id., ¶ 12.
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As a part of that competition, defendants Reghay and Berthet submitted a composition
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entitled “A Necessidade” (the “Composition”) for EA’s consideration. The Composition won
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the competition, and EA approached Reghay and Berthet to negotiate and obtain the legal rights
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to use the Composition in FIFA 2005. Id., ¶ 13. Following more than two months of
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negotiations, EA entered into the following three agreements with Reghay, Berthet and their
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production company Giant:

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1 • The Assignment of Copyright dated March 29, 2004 (the “Assignment”) attached to the
Complaint as Exhibit A, wherein EA acquired fifty percent (50%) of the rights under
2 copyright to the Composition by assignment in exchange for a cash payment;

3 • The “Interactive Media Synchronization and Performance License” dated March 29,
2004 (the “Synch License Agreement”) attached to the Complaint as Exhibit B, wherein
4 EA obtained a license to use the other 50% of the rights under copyright to the
Composition; and
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• The “Interactive Media Master Use and Performance License” dated March 29, 2004 (the
6 “Master License Agreement”) attached to the Complaint as Exhibit C, wherein EA
obtained a license to use the master recordings of the Composition.
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Id., ¶¶ 14, 15.
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In each of the Synch License and Master License Agreement, Giant1 represented and
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warranted that it owned, controlled or administer the rights that EA was acquiring. Id., ¶¶ 21, 22.
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In paragraph 10 of the Synch License Agreement, Giant warranted that it “owns, controls or
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administers 50% of the rights under copyright in and to the Composition, throughout the [world],
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and that [it] has the right to grant the rights granted hereunder, that [EA] will not be required to
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make any payments in connection with its use of the Composition except as specifically set forth
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herein, and that [EA’s] use of the Composition in accordance with the License will not infringe
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the rights of any third party.” Compl., Ex. B, ¶ 10.2 Likewise, in paragraph 10 of the Master
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License Agreement, Giant warranted that it “owns, controls or administers 100% of the rights
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under copyright in and to the Master, throughout the [world], and that [it] has the right to grant
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the rights granted hereunder, that [EA] will not be required to make any payments in connection
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with its use of the Composition except as specifically set forth herein, and that [EA’s] use of the
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Composition in accordance with the License will not infringe the rights of any third party.”
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Compl., Ex. C, ¶ 10.
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Giant also agreed in each of those Agreements to indemnify and hold EA harmless
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24 1
EA entered into the Synch License and Master License Agreements with Giant—and not
25 Reghay or Berthet—at the express direction of Reghay acting on behalf of himself and Berthet.
Indeed, Reghay himself executed those Agreements as the president of Giant, having represented
26 to EA that he had power of attorney to sign for Giant. See Compl., ¶ 16. It is common in the
music industry for a music production company to own or control right to a musical composition
27 or master recording.
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EA obtained the rights to the other 50% of the Composition from the Assignment, attached as
28 Exhibit A to the Complaint.

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1 against any expenses that arise out of any claim by a third party that is inconsistent with the

2 above representations and warranties. In paragraph 10 of the Synch License Agreement, Giant

3 agreed that it “will indemnify and hold [EA] harmless against any and all claims, liabilities,

4 losses, damages or expenses (including reasonable attorneys fees and court costs) incurred by

5 [EA] which arise out of any claim by a third party which is inconsistent with [Giant’s]

6 representations, warranties and agreements hereunder.” Compl., Ex. B, ¶ 10. In paragraph 10 of

7 the Master License Agreement, Giant agreed that it “will indemnify and hold [EA] harmless

8 against any and all claims, liabilities, losses, damages or expenses (including reasonable

9 attorneys fees and court costs) incurred by [EA] which arise out of any claim by a third party

10 which is inconsistent with [Giant’s] representations, warranties and agreements hereunder.”

11 Compl., Ex. C, ¶ 10.

12 Having obtaining 100% of the rights under copyright to the Composition and the master

13 recordings of the Composition, EA incorporated the Composition into FIFA 2005. Id., ¶ 17.

14 FIFA 2005 was commercially released in North America and Europe in October 2004. Id., ¶ 18.

15 Eighteen months later, however, Reghay and Berthet brought a writ of summons before

16 the Paris Court of First Instance (the “French Action”) that challenged EA’s right to use the

17 Composition in FIFA 2005. Specifically, the writ of summons alleged, inter alia, that inclusion

18 by EA of the Composition in FIFA 2005 constitutes copyright infringement because it was

19 included without the authors’ consent, and asked the French court to order EA to pay €150,000

20 to Reghay and Berthet as a provision to be deducted from their alleged additional damages for

21 infringement. Id., ¶ 19. In addition, the writ of summons also sought declarations by the court in

22 the French Action that each of the Assignment, the Synch License Agreement and Master

23 License Agreement is null and void. Id., ¶ 20. At least for the Synch License Agreement, the

24 writ of summons contends that Giant had no authority to license the 50% of the rights under

25 copyright in and to the Composition because it did not hold those rights. Id.

26 Believing the claims in the French Action to be inconsistent with Giant’s representations

27 and warranties in the Synch License and Master License Agreements, on April 4, 2006, EA sent

28 a letter entitled “Demand for Indemnification” to Giant demanding that Giant indemnify and

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1 defend EA against the claims asserted in the French Action. Id., ¶ 24. In its response dated

2 April 25, 2006, Giant refused to do so, asserting that EA is not entitled to indemnification. Id.

3 Thus, on May 24, 2006, EA brought suit against Reghay, Berthet and their production company

4 Giant. EA brought suit in California pursuant to the exclusive forum-selection clauses in

5 paragraph 11 of the Synch License Agreement and paragraph 12 of the Master License

6 Agreement. See Compl., Ex. B, ¶ 11d & Compl., Ex. C, ¶ 12d.

7 III. ARGUMENT

8 A. The Court should enter default judgment against the Defendants.3

9 As evidenced by the E-filing docket sheet for this case, EA filed its Complaint on May

10 24, 2006. EA elected to request waiver of service from Defendants, and thus, on May 26, 2006,
11 sent through reliable means requests to waive service in accordance with Rule 4(d). Each
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Defendant agreed to waive service and returned an executed waiver of service. EA filed those
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executed waivers on June 5, 2006, and September 20, 2006.4
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Pursuant to Rule 4(d)(3) of the Federal Rules of Civil Procedure, Defendants had 90 days
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after the date on which the request for waiver of service was sent to respond. Accordingly,
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Defendants should have filed a responsive pleading on or before August 25, 2006. No such
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18 responsive pleading has been filed. Accordingly, EA asked the Clerk enter default in this matter.

19 The Clerk did so as to defendants Reghay and Berthet on September 20, 2006, and as to

20 defendant Giant Productions on September 22, 2006.

21 EA now moves the Court to enter default judgment against Defendants pursuant to
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Federal Rule of Civil Procedure 55(b)(2). More than six months have passed since EA filed its
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Complaint—and since Defendants waived service—and yet, no Defendant has filed a responsive
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25 3
The facts stated herein are set forth in the accompanying declaration of Ryan M. Kent, filed
26 herewith.
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When EA originally filed the executed waivers on June 5, 2006, EA accidentally filed two of
27 the same waiver and thus neglected to file Giant Productions’ waiver of service. This error was
noticed when EA moved for entry of default, and promptly corrected by the filing of Giant
28 Productions’ waiver of service as reflected in the docket.

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1 pleading. During this time, EA has diligently served all orders and pleadings on French counsel

2 for Defendants, including the Initial Scheduling Conference Order, the Requests for Entry of
3 Default, the Clerk’s Notices of Entry of Default, and EA’s Separate Case Management
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Statement. EA has received no response. Therefore, EA asks this Court to order the relief that
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EA seeks in its Complaint.
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B. The Court should order all of the relief that EA seeks in its Complaint.
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1. The Court should enter declaratory judgment that Giant is required to
8 indemnify and hold EA harmless.
9 EA asks the Court to enter declaratory judgment that Giant is required to indemnify and
10 hold EA harmless against the claims asserted in the French Action as well as against any
11 liabilities, losses, damages or expenses (including reasonable attorneys’ fees and court costs)
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arising out of those claims. See Compl., Prayer for Relief at ¶ 1.
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In each of the Synch License and Master License Agreement, Giant represented and
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warranted to EA that Giant “has the right to grant the rights granted hereunder, . . . that [EA’s]
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use of the Composition in accordance with the License will not infringe the rights of any third
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17 party.” Compl., Exh. B, ¶ 10 & C, ¶ 10 (emphasis added). Yet, eighteen months after making

18 that representation, the authors of that work—Reghay and Berthet—claim that the inclusion by

19 EA of the Composition in FIFA 2005 constitutes copyright infringement because it was included

20 without their consent. That claim is inconsistent with the representations and warranties made
21 by Giant, and therefore Giant must indemnify and hold EA harmless against the claims and
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expenses that arise out of the claims asserted in the French Action. Id. (Giant “must indemnify
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and hold [EA] harmless against any and all claims, liabilities, losses, damages or expenses
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(including reasonable attorneys fees and court costs) incurred by [EA] which arise out of any
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claim by a third party which is inconsistent with [Giant’s] representations, warranties and
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agreements hereunder.”).
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1 2. The Court should enter declaratory judgment that Giant breached the Synch
License and Master License Agreements.
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EA asks the Court to enter declaratory judgment that Giant has breached the Synch
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License and Master License Agreements by refusing to indemnify or hold EA harmless against
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the claims asserted in the French Action. See Compl., Prayer for Relief at ¶ 2.
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6 As explained above in Part B.1, Giant has an obligation under the Synch License and

7 Master License Agreements to indemnify or hold EA harmless against the claims asserted in the

8 French Action. When EA demanded that Giant perform its obligation in its April 4, 2006 letter
9 entitled “Demand for Indemnification,” Giant refused to do so, and thereby breached the Synch
10 License and Master License Agreements. Id., ¶ 24.
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3. The Court should enter declaratory judgment that Defendants must pay the
12 attorneys’ fees and costs incurred by EA in defending against the French
Action.
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EA asks the Court to enter declaratory judgment that Giant, Reghay, and Berthet, jointly
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and severally, must pay the attorneys’ fees and costs from the date of any judgment as such fees
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and costs are incurred by EA as a result of its defense of the French Action. See Compl., Prayer
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for Relief at ¶ 5.
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18 As explained above in Part B.1, Giant is obligated to indemnify and hold EA harmless in

19 paying any expenses (including reasonable attorneys fees and court costs) incurred by EA in

20 defending the French Action. Compl., Exh. B, ¶ 10 & C, ¶ 10. In addition, Reghay and Berthet

21 also should be declared to be liable for all attorneys’ fees and costs incurred by EA in defending
22 the French Action. Reghay is the president of Giant, and represented to EA that he had power of
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attorney to sign for Giant. See Compl., ¶ 16. Indeed, Reghay (acting on behalf of himself and
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Berthet) told EA that EA should enter into the Synch License and Master License Agreements
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with their production company Giant—and not them individually. Id. Thus, Reghay and Berthet
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are the alter egos of Giant and are jointly and severally liable for Giant’s obligations to EA. Id.,
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¶ 6.
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1 4. The Court should enter declaratory judgment that each of the Assignment of
Copyright, the Synch License Agreement, and the Master License Agreement
2 is valid and enforceable.

3 EA asks the Court to enter declaratory judgment that each of the Assignment of

4 Copyright, the Synch License Agreement, and the Master License Agreement is valid and
5 enforceable. See Compl., Prayer for Relief at ¶ 6.
6
EA approached defendants Reghay and Berthet to negotiate and obtain the legal rights to
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use the Composition in FIFA 2005 after that Composition won a special competition at the 38th
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MIDEM conference. Id., ¶¶ 12, 13. Following more than two months of negotiations, the
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parties reached agreement on the terms under which EA could use the Composition in FIFA
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2005, and EA entered into the Assignment of Copyright, the Synch License Agreement, and the
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12 Master License Agreement with Reghay, Berthet and their production company, Giant. Id., ¶13.

13 Those signed contracts (attached to the Complaint as Exhibits A, B, and C) are valid and

14 enforceable.
15 5. The Court should enter an anti-suit injunction that enjoins Reghay and
Berthet from proceeding with the French Action.
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EA asks the Court to enter an anti-suit injunction that enjoins Reghay and Berthet from
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proceeding with the French Action in violation of the unequivocal forum-selection clause in each
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of the Synch License Agreement and the Master License Agreement. See Compl., Prayer for
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Relief at ¶ 7.
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Although the Court cannot order a foreign court to halt proceedings, it can “restrain a
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party subject to its jurisdiction from proceeding in a foreign court in circumstances that are
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unjust.” See E. & J. Gallo Winery v. Andina Licores S.A., 446 F.3d 984, 989 (9th Cir. 2006). It
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is thus appropriate to enjoin a party from proceeding with a foreign suit where the parties and the
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issues involved in the domestic and foreign suits are the same, and the foreign litigation would
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frustrate a policy of the forum issuing the injunction. Id. at 991. Thus, where a foreign litigation
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is brought in contravention of a valid and enforceable forum-selection clause, a court may—and
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should—enter an anti-suit injunction. Id. (holding that district court abused its discretion in
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1 refusing to enter an anti-suit injunction where a defendant had initiated a protracted litigation in a

2 foreign country in direct contravention of a forum-selection clause).

3 Reghay and Berthet brought suit against EA challenging the validity of the Synch

4 License Agreement and the Master License Agreement in France. By choosing to bring suit in

5 France—and not California—Reghay and Berthet have attempted to render the forum-selection

6 clauses in paragraph 11 of the Synch License Agreement and paragraph 12 of the Master License

7 Agreement nullities. See Compl., Ex. B, ¶ 11d & Ex. C, ¶ 12d. Those forum-selection clauses

8 unequivocally require that “[a]ny controversy arising hereunder shall be adjudicated in a court of

9 competent jurisdiction, located within the State of California,” id. (emphasis added), and are

10 presumed valid under California and federal law. See Smith, Valentino & Smith, Inc. v. Superior

11 Court , 17 Cal.3d 491, 495-496 1976); The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10-12

12 (1972). Because the French Action involves the same parties and issues as this action and

13 threatens to nullify the forum-selection clauses in the Synch License and Master License

14 Agreements, this Court should enjoin Reghay and Berthet from proceeding in the French action.

15 6. The Court should award money damages to reimburse EA for its defense of
the French Action.
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EA asks the Court to award damages in the amount of attorneys’ fees and costs incurred
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by EA to date of the entry of this Judgment as a result of its defense of claims raised in the
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French Action—an amount equal to $35,528.30. See Compl., Prayer for Relief at ¶¶ 3, 4.
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As explained above in Part B.1, EA is entitled to expenses (including reasonable
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attorneys’ fees and court costs) arising out of its defense of claims asserted in the French Action.
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That amount clearly includes all attorneys’ fees and costs incurred in attempting to resolve the
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French Action. Accordingly, the amount of expenses includes not only the attorneys’ fees and
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costs spent defending the French Action, but also the attorneys’ fees and costs spent maintaining
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this action, which (for example) seeks an anti-suit injunction that would compel Reghay and
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Berthet to dismiss the French Action.
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1 Further, pursuant to 28 U.S.C. §1961 and 40 U.S.C. §258(e)(1), EA is entitled to post-

2 judgment interest in an amount that accrues at the rate of $4.77 per day.5

3 IV. CONCLUSION

4 For all of the above-stated reasons, EA respectfully requests that the Court enter

5 judgment against Defendants and order all of the relief requested in the Complaint.

6 Respectfully submitted,

7 DATED: December 8, 2006 KEKER & VAN NEST, LLP

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By: /s/ Ryan Kent ________________
10 Ryan M. Kent
Attorneys for Plaintiffs
11 ELECTRONIC ARTS, INC. and
ELECTRONIC ARTS MUSIC
12 PUBLISHING, INC.
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EA calculates the interest per day using the rate for 1-year Treasury Constant Maturities
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381878.04 APPLICATION FOR DEFAULT JUDGMENT
Case No. C06-3403 JSW