Bandai Namco Seeks to Gobble Up Retro Ms. Pac-Man Arcade Game

This case serves as a reminder of the importance of understanding the scope of your intellectual property rights before engaging in production and sales negotiations.

In September 2019, Bandai Namco filed suit against AtGames alleging that AtGames violated its exclusive rights to Ms. Pac-Man by creating an in-home Ms. Pac-Man arcade cabinet and representing to retailers that it had a license for the game. According to the complaint, AtGames had repeatedly approached Bandai Namco for a license to create a Ms. Pac-Man game, but Bandai Namco rejected the requests due to a previous collaboration with AtGames in which AtGames distributed a Pac-Man product that differed from the prototype Bandai Namco approved. Thereafter, BNEA filed a TRO against AtGames to prevent the promotion and sale of the Ms. Pac-Man arcade cabinet, claiming that the failed collaboration demonstrates that AtGames’ current unauthorized exploitation of Ms. Pac-Man “will yield equally damaging results in the eyes of the consuming public and cause even greater harm to yet another BNEA property.”

AtGames maintains that it never sold any Ms. Pac-Man products, rather it only discussed creating a potential product with retailers and produced two prototypes, one of which was sent to the creators of the Pac-Man franchise, General Computer Corporation. Although General Computer Corporation previously assigned the rights to Ms. Pac-Man to Bandai Namco, it retained the right to be paid royalties when the character is used in commercial works. Bandai Namco was negotiating an agreement with General Computer Corporation for this royalty right; however, after receiving AtGames’ Ms. Pac-Man prototype, General Computer Corporation sold its royalty interest to AtGames. AtGames claims that the TRO is retaliation for AtGames purchasing the royalty right to the Ms. Pac-Man character. In response, BNEA clarified that AtGames’ royalty right does not give it the right to use the Ms. Pac-Man intellectual property; those rights are exclusive to Bandai Namco.

Foreign Legal Intern Kaei Ro co-authored this alert.