WWE, Jakks Pacific and THQ continue their multi-year legal squabble following the dismissal of the case by the US District Court.

The case of World Wrestling Entertainment (WWE) vs Jakks Pacific, Inc. has been dismissed by the United States District Court and the WWE’s state law claims will be transfered to the state courts. Originally filed in October 2004, WWE’s filing addressed Jakks, game developer THQ, Stanley Shenker & Associates, Inc. and Bell Licensing, LLC., as well as specific individuals from those companies, including Jack Friedman, Stephen Berman and Joel Bennett, the three highest-ranking executives of Jakks, and Stanley Shenker and James Bell. Shenker served as WWE’s licensing agent and Bell was WWE’s Senior Vice President of Licensing and Merchandising at the time the unlawful conduct occurred.

Allegedly, top Jakks officers ordered discrete payments to Shenker through the company’s foreign subsidiaries while Jakks and THQ were negotiating the rights to the lucrative WWE videogame license. Shenker and Bell have both plead guilty to their crimes and are currently incarcerated. In the federal case, the defendants argued that a release given after a royalty audit of the toy license sought to hinder WWE from pursuing its state law claims. Judge Kenneth Karas indicated that he found that the release did not bar any of these claims.

Jack Friedman, Chief Executive Officer of Jakks Pacific stated, “The Court is expected to render its comprehensive opinion by Friday and it remains to be seen how the opinion, which will address statute of limitations, injury and other issues, impacts WWE’s state law claims.”

WWE Chairman Vince McMahon stated, “We are pleased that we now finally have the opportunity to litigate the merits of our state law claims in state court and to place our evidence before a jury of how Jakks and its partners conducted themselves. WWE’s intellectual property is a valuable asset of the Company, and this lawsuit is necessary to preserve the integrity of our licensing process and essential to ensure that WWE receives appropriate and fair compensation for the grant of a license to use our intellectual property.”

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