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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,

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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

Defendants Motion to Compel at p. 14.

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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,

A true and correct copy of the APA and Supplement are attached here as Exhibit 1.

Id. at Ex. 2.4.

Id. at Ex. 2.10.

Id. at Ex. 2.1.

Id. at Ex. 2.2; see also APA Supplement.

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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.

Ex. 1, APA Supplement at p. 1 3.

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.

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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.

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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.


After finishing 3DRs failed development efforts on the title.

17

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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.
See Ex. 3 (Gearbox Response to Nos. 1 and 3).

21

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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 preclosing.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

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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:

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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.

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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.

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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.

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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.

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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.

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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.

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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.
See Motion at 16 (citing Life Music, Inc. v. Broad. Music, Inc., 41 F.R.D. 16 (S.D.N.Y. 1966).

39

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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
41

Life Music, Inc., 41 F.R.D. at 28.


Motion at 17.

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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).

GEARBOXS RESPONSE TO DEFENDANTS MOTION TO COMPEL Page 18 of 21

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.

GEARBOXS RESPONSE TO DEFENDANTS MOTION TO COMPEL Page 19 of 21

Dated: May 1, 2015

Respectfully submitted,

By:

s/ Jonathan E. Clark
Stephen E. Fox
Texas Bar No. 07337260
sfox@polsinelli.com
Jonathan E. Clark
Texas Bar No. 24069515
jclark@polsinelli.com
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
mike.schonberg@tklaw.com
Megan Dredla Hoyt
Texas State Bar No. 24050530
megan.hoyt@tklaw.com
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.

GEARBOXS RESPONSE TO DEFENDANTS MOTION TO COMPEL Page 20 of 21

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
rschultz@grspc.com
Nicole R. Marsh
nmarsh@grspc.com
Schultz & Associates, P.C.
5400 LBJ Freeway, Suite 1200
Dallas, Texas 75240

s/ Jonathan E. Clark
Jonathan E. Clark

GEARBOXS RESPONSE TO DEFENDANTS MOTION TO COMPEL Page 21 of 21