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U.K. developer sues Atari

Atari faces litigation over the alleged nonpayment of royalties. British judge accuses it of playing "tactical games."

A Scottish software developer is suing computer games publisher Atari Interactive for nearly $5.2 million (3 million pounds), it was announced on Tuesday.

Chris Sawyer, the software developer behind the "Transport Tycoon" and "RollerCoaster Tycoon" games, claims that Atari owes him unpaid royalties for the years between 1999 and 2003. He is also calling for a full audit of Atari's accounts.

Following a High Court ruling last week, Sawyer's case will continue to be heard in London.

Sawyer claims that Atari Interactive owes him $4.8 million (2.8 million pounds) in various omitted and miscalculated payments. He also alleges that Atari acted in breach of contract by refusing auditors full access to accounts between 1999 and 2001.

Marjacq Micro, Entertainment rights specialists acting on behalf of Sawyer, accused Atari of delaying tactics.

"Throughout this process Atari Interactive has sought to delay the claims. Royalty queries were simply ignored, forcing an audit. Noncooperation with the audit forced Chris to sue," said Guy Herbert, commercial consultant for Marjacq Micro, in a statement.

Herbert told ZDNet UK that Marjacq Micro has struggled to get access to Atari's accounts.

"In some ways the larger part of the claim is getting a court order so Atari show auditors the books," Herbert added.

According to Herbert, Sawyer feels that he has been forced into legal action by Atari's lack of cooperation.

"Chris is a fairly retiring man, and didn't really want to make a fuss, but what rankled was just getting no answers. Chris has an undertaking in his contract with the publisher that he can audit his royalties--he's entitled to see everything. The auditors sent a list of things they'd like to see, but when they turned up nothing was ready, and the publisher was very uncooperative."

Herbert said he believes that Atari's reluctance to show its books to auditors is suspicious.

"It could be there's no money missing, but since the auditors haven't been shown the royalty accounts one is inclined to think the other way," Herbert said.

Atari had tried to get the case moved from London to New York. But in a judgment handed down last week, Justice Lawrence Collins said, "I am satisfied that the Claimant has established that England is the clearly appropriate forum," and added "I consider that [Atari] is playing tactical games."

Herbert is concerned that Sawyer's case could damage the already fragile relationship between publishers and software developers.

"If Chris proves his claim that Atari Interactive has failed to account properly and substantially underpaid, it could have major ramifications for the industry as well as the company,? said Herbert.

This includes the possible erosion of trust between publishers and software developers.

"Publishers need to invest at the sunk cost stage. If developers cannot be sure of getting fair royalties, they have to get as much as they can at the sunk cost stage, and they become the grasping contractors that publishers often believe them to be. It's up to the publishers to prove they are honest."

Neither Atari UK nor Atari's parent company, Infogrames, had responded to repeated requests for comment.

Tom Espiner of ZDNet UK reported from London.