Gibson Guitar Corp., which once harmoniously licensed its name to the blockbuster "Guitar Hero" video games, is strumming a different tune.
Nashville-based Gibson claims that Activision Inc.'s "Guitar Hero" violates a 10-year-old patent Gibson owns for a virtual reality music system. Activision says that isn't the case and in a lawsuit filed Tuesday in Los Angeles asked a federal judge to settle the matter.
"We believe their claims will not withstand any objective scrutiny," George Rose, Santa Monica-based Activision's general counsel, said in a statement.
In a Jan. 7 letter to Activision, Gibson attorney F. Leslie Bessenger said the video game producer was "taking advantage of Gibson's patented technology without properly compensating Gibson."
Gamers who play "Guitar Hero" use wireless controllers shaped like guitars -- most of them modeled after famous Gibsons -- jamming along with animated on-screen musicians.
Activision pays an undisclosed amount for Gibson's trademark under a license agreement. It is unclear when that agreement expires.
"Gibson clearly believes the patent could be worth a lot more than the royalties the company is already receiving from Activision," said Colin Sebastian, an analyst with Lazard Capital Markets.
The Gibson patent, granted in November 1999, outlines a system that simulates a concert experience with a head-mounted display with speakers, an eight-channel mixer, a DVD player and a guitar.
Activision's suit says Gibson forfeited its rights by failing to raise the patent issue earlier.
"Gibson has been aware of the 'Guitar Hero' game for many years," the suit says, and "encouraged Activision to manufacture and sell devices it now alleges infringe the . . . patent."
The hugely popular "Guitar Hero" series is a crucial franchise for Activision, selling more than 16 million copies worldwide. In North America alone it has generated more than $1 billion in retail sales since it came out two years ago, according to research firm NPD Group Inc. Activision is in the process of being acquired by Paris-based Vivendi.
In a March 10 letter to Gibson, Activision's senior litigation counsel, Mary Tuck, said that the game company "was not interested in renewing the license and marketing support agreement" with Gibson and that was why Gibson has brought up the patent. Tuck didn't say in the letter when the agreement would end.
Gibson executives didn't respond to requests for comment and Activision executives said they couldn't comment.
Activision's shares slumped 31 cents to $26.82 in the regular session, recovering 21 cents to $27.03 in after-hours trading.