Brothers Rajat and Jayant Agarwalla of Calcutta, India, were such Scrabble fans, they developed a digital version of the game for the Internet: Scrabulous. Then they took it to the Facebook social network and drew more than half a million daily players. The success generated thousands of dollars in advertising revenue, but more important for the Agarwallas, it caught the notice of Hasbro and Mattel, which, inconveniently, own the rights to Scrabble. And so began another round of Copyright Holders versus Geeks, sometimes billed as Yesterday's Business Model versus The Future.
These battles all seem to follow the same script: Entrepreneurs see a gap in the market left by rights holders, develop software that takes advantage of those underused rights, build a huge audience and get sued. In this case, Mattel, Hasbro and their online partners may have done the smart thing first: Recognizing that the Agarwallas' software was hugely popular, they reportedly tried to buy them out before running to court, but the parties couldn't agree on a price. As it so often goes with these stories, Scrabulous' audience had grown much faster than its revenue, so the brothers and their suitors were left to speculate about its true value.