JAKKS Pacific, Inc. has notified World Wrestling Entertainment that the joint venture between THQ and JAKKS intended to exercise its option to renew the WWE videogame license, which would otherwise expire on December 31, 2009, for an additional five (5) year term ending December 31, 2014.
Separately, THQ commenced a lawsuit in California Superior Court, Los Angeles County, claiming it was not ready to make a decision with respect to renewal of the WWE videogame license, and seeking a declaratory judgment that
- JAKKS was not authorized under the parties’ joint venture agreement to unilaterally issue a renewal notice to WWE,
- THQ has no obligation to consent to a renewal of the WWE license, and
- the restrictive covenant in the joint venture agreement prohibiting THQ from publishing any videogames based on wrestling during the term of the joint venture agreement (expiring one year after termination of the WWE license) is unenforceable under California law.
JAKKS and THQ have also initiated arbitration proceedings relating to these issues.