Court rules for Activision in Scratch case, "no impact" on DJ Hero

Earlier this week, DVD company Genius Products and audio equipment manager Numark Industries filed a lawsuit in a Los Angeles court leveling some serious charges against Activision. Spanning more than 30 pages, the complaint accused Activision of "intentional interference with contract, breach of contract...and misappropriation of trade secrets obtained from Genius to purchase 7 Studios, which is under contract to develop the much-anticipated new hip-hop video game, Scratch: The Ultimate DJ."

In short, Genius and Numark's filing claimed that Activision contacted them via the cash-strapped 7 Studios expressing interest in buying Scratch: The Ultimate DJ. However, after announcing its own DJ Hero game and seeing a demo of Stratch, Activision allegedly broke off negotiations and promptly bought 7 Studios. The suit then contends that 7 Studios slowed work on the game and refused to turn over software and a Numark turntable-inspired controller when Genius terminated its contract.

In addition to "substantial damages" and a return of its assets, Genius and Numark sought a restraining order against Activision's release of DJ Hero so Scratch could retain its "'first to market' status." This afternoon, Activision released a strongly worded statement announcing that a Los Angeles judge had rejected the request for a restraining order, citing a lack of evidence:

"Activision Publishing strongly denies the allegations made by Genius Products and Numark Industries and believes that the claims are disingenuous and lack any merit. Yesterday, the L.A. Superior Court found that there was no evidence of any wrongdoing by Activision and refused to grant any restraining order against Activision.

"These allegations are nothing more than an attempt by Genius to place blame for the game's delay, as well as to divert attention from the cash flow, liquidity, and revenue challenges Genius detailed in its March 30, 2009, SEC filing. By their own admission in October 2008, the game had fallen behind in production, which was well before Activision had any involvement with Genius, Numark or California 7 Studios regarding the game.

"The lawsuit will have no impact on Activision's upcoming DJ Hero game, a turntable-based music game that the company has been independently developing."

Activision's statement did not mention the return of Scratch assets nor any damages, suggesting further legal maneuvering is in store. "Activision wanted to fire back and they did but there are a few things they left out from yesterday's court hearing which Genius will reveal soon," a Genius and Numark rep told GameSpot.