Guitar Hero: Gibson Asserts Patent Claims; Viacom's Harmonix Negotiating Higher Royalties

This story was written by Joseph Weisenthal.
As if you needed any more evidence that Guitar Hero had made it big: Guitar company Gibson has accused the game's maker, Activision (NSDQ: ATVI), of violating a 1999 patent for "technology for simulating a musical performance." Activision disclosed in a court filing, as part of an attempt to get the patent made invalid, that Gibson made its view known in a January letter, according to Reuters. Gibson wants to enjoin Activision from selling the game, says Bloomberg but it's a safe guess that the problem could go away for the right price. An odd aspect of this is that the two companies have partnered in the past on IP issuestrademark Gibson guitars have been featured in the game itself (see here), though that's obviously separate from a patent issue.

-- Here's the exact description of the relevant patent. You can judge for yourself how close it is to Guitar Hero (try to read it through the eyes of an East Texas juror): "A musician can simulate participation in a concert by playing a musical instrument and wearing a head-mounted 3D display that includes stereo speakers. Audio and video portions of a musical concert are pre-recorded, along with a separate sound track corresponding to the musical instrument played by the musician. Playback of the instrument sound track is controlled by signals generated in the musical instrument and transmitted to a system interface box connected to the audio-video play back device, an audio mixer, and the head-mounted display. An external bypass switch allows the musician to suppress the instrument sound track so that the sounds created by actual playing of the musical instrument are heard along with the pre-recorded audio and video portions."

-- Separately, Activision is negotiating with the original creator of Guitar Hero, Harmonix (since bought by Viacom), about the proper royalty rates to be paid on Guitar Hero III. Harmonix had gone to court seeking higher royalties, but Variety reports that the two sides are now talking. At issue is whether the latest iteration of the popular game builds off of Harmonix's old work, in which case it would get a full royalty, or whether the new game constitutes a rebuild from scratch, in which case Harmonix only gets half as much. Ultimately, the two sides are arguing over roughly $14.5 million.

By Joseph Weisenthal