Play Meter

Issue: 1985 September 01 - Vol 11 Num 16

OMAA protests
AMOA agreement
The Ohio Music and Amusement
Association (OMAA) adopted a reso-
lution at its June 27 board of directors
meeting protesting the May agree-
ment between PJ..AOA and the Per-
forming Rights Societies on jukebox
license fees. In a strongly worded
statement. OMAA stated that "PJ..AOA
did not discharge its duties according
to directives and goals it initially pub-
licized and that the agreement is not in
the best long term interest of the juke-
box industry."
The PJ..AOA agreement was the
solution to an ongoing problem of
excessive license fees imposed upon
jukebox operators beginning with $8
per year in 1978 rising to $50 in 1985.
Jukebox operators were outraged
at the increase and had sought relief
with the PJ..AOA agreement. However.
the agreement fell short of providing
much relief. and in fact calls for an
increase to at least $60 in 1987. The
agreement provides a S I 0 rebate for
1985 and 1986. and a rebate of any-
thing over $60 for 1987 and 1988
provided there are II 0.000 jukeboxes
registered in 198 7 and I 15.000 in 1988.
Ohio operators are angry about
the agreement and how it was
obtained. Said OMAA president Larry
Van Brockel. "This agreement was the
best kept secret since the atom bomb.
PJ..AOA made no attempt to let us know
what was going on. There could even
be more things in the agreement that
we still don't know about. Even the
point about low compliance among
operators has not been challenged . I
believe the compliance is much
higher."
He went on to say. "The PJ..AOA
approached the OMAA to organize a
grass roots organization. to have our
members work hard contacting sen-
ators and representatives to make
them aware of our problem. We were
10
asked to do it and we did. We worked
hard. and all of a sudden we find out
an agreement was reached and we
didn't know anything about it."
This resolution. noted Van BrockeL
is not the opinion of one or two people
in the association. but represents the
whole association. " At our board
meeting it was I 00 percent unanimous
that everyone was extremely unhappy
with this agreement. " said Van
Brockel. " A group representing the
PJ..AOA came to Columbus to talk with
us about our feelings on the matter
which we told them in detail. How-
ever. they didn't give us any satis-
factory answers."
OMAA's resolution states its objec-
tions to the PJ..AOA agreement: ( I )
PJ..AOA's original goal was to mount a
grass roots campaign. not to negotiate
OJ;\ agreement that prohibits any
further legislative effort before 1989;
(2) the settlement establishes a new
floor to fees that only two years ago
were considered so oppressive as to
cripple the already staggering juke-
box industry; and ( 3) the settlement
seems to be the result of the Perform-
ing Rights Societies perception of lack
of unity on the part of PJ..AOA negotia-
tors.
Van Brockel said that the hope of
OM.AA by adopting this resolution. is
to emphasize to PJ..AOA that they are
representing operators all over the
country and they need the grass roots
campaigns and operator support
"Something as monumental as this
agreement should have involved
Dyal receives award
John Dyal. Philadelphia. Pennsylvania. right was given an award
by Standard Change-Makers. Inc. for the "Greatest Percentage of Increase
in Sales for 1984 ... The award was presented by John S. Dugan. national
sales manager. at the Company's 30th annual sales meeting in Indianapolis.
PLAY MfTER, September 1, 1985
those alfected. It should not have been
a secret agreement. one which is
unsatisfactory to operators." Van
Brockel said.
Van Brockel pointed out that
OMAA had been asked to support the
original proposal of a SSO one time tee
on new jukeboxes and a one time tee
of 525 tor used ones. The association
had garnered support tor this proposal
and " now we have egg on our !ace."
said Van Brockel. commenting on the
agre ement being made with no
advance notice. "Those we contacted
tor support of a proposition are not
likely to be as willing to listen to us in
the future." he said.
Van Brockel summed it up. "Our
biggest goal is making N.tlOA aware
that i1 legislative negotiations are
scheduled again. we want to be
involved. not ignored."

Nintendo wins against
King Kong claim
N intendo o f America. Redmond.
Washington. has won a counterclaim
against Universal Studios. Inc. Univer-
sal had originally tiled a trademark
infringement action seeking overS 100
million dollars. claiming that Nintendo
had infringed on Universal's rights to
King Kong by introducing the popular
game Donkey Kong in 1982. Universal
demanded that Nintendo cease all
production of Donkey Kong and g ive
Universal all pro!its. Universal also
threatened various Nintendo licensees
with litigation.
One of the licensees was Coleco.
who had the license tor the home
ve rsion of Donkey Kong. Coleco. due
to other business matters involving
Universal and unable to take the risk of
litigation. settled with Universal. subse-
quently paying Universal over SS
millio n in royalties !rom the sale of
hom e video cartridges of Donkey
Kon g .
Nintendo. according to general
counsel Howard Lincoln. was out-
raged at the threats. "We felt they
( Universal ) were trying to extrad
money !rom N intendo and we were
determi ned to tight it to the end."
Nintendo had requested a sum-
mary judgment ( a judge studies the
evidence and makes a ruling without
g oing to a trial ) and it was granted by
Judge Robert Sweet of the United
States District Court in New York. who
d ismissed Universal's claims. He also
found tha t Universal had no rights to
King Kong. A federal court of appeals
PLAY METER. September 1. 1985
a11irmed Judge Sweet's dismissal of
the claim.
Nintendo then !iled the counter-
claim tor tortious interference with its
licensees. unjust enrichment. vicarious
copyright infringement. punitive
damages. and attorney tees. In his
opinion issued at the July 29 trial.
Judge Sweet found that Universal had
commenced the litigation against
Nintendo in bad faith and had falsely
asserted rights in King Kong which it
knew it never had. He also found that
in its zeal to cash in on the success of
Donkey Kong. Universal had infringed
on Nintendo's Donkey Kong copyright
and had wantonly interfered with Nin-
tendo's Donkey Kong licensing pro-
gram by threatening licensees with
spurious litigation. Nintendo was
awarded attorney tees. actual and
punitive damages against Universal.
The award is in excess of one million
dollars.
The judge noted in his award of
attorney's tees when the complaint of
this action was tiled. Universal knew
that the allegations of the sweeping
ownership of King Kong were unsup-
ported by the rights Universal actually
possessed. Universal used the lawsuit
as part of a larger elfort to acquire
some portion of the profits derived
trom .. .Donkey Kong. Universal and
(Universal's president and chief
operating officer Sidney Jay) Shein-
berg. viewed corporate litigation as a
" profit center." and the known insut!i-
ciency of the claims asserted did not
inhibit the use of litigation where the
opportunity tor profitable settlement
existed."
The judges comments came !rom
Sheinberg's boast to Nintendo prior to
litigation. as he attempted to force a
settlement. that Universal's litigation
department was a profit center and
that Nintendo had better start saving
money tor attorney tees.
In commenting on the victory.
Lincoln noted. " It !sa nice victory. It is a
case of a small company standing up
to a big company and winning. It's a
situation where you truly !eel that
justice has been done."
Coleco has tiled a suit against Uni-
versal to recover the SS million it has
paid Universal.

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11

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