In April of 2011, New World brought suit against Zoo for violation of a licensing agreement between the two companies. Law360 reported that under this licensing agreement, New World granted Zoo the rights to produce more than 60 games it owned in exchange for a royalty payment. New World alleged that Zoo had not provided it with any of the royalty accounting and thus the licensing agreement had been breached. Moreover, New World believed that Zoo owed a minimum royalty payment of around $1.9 million. When Zoo refused to pay the minimum royalty payment, New World ended the licensing agreement between them. After this termination, New World determined that Zoo had not ceased the use of its trademarks. In its defense, Zoo alleged that 65 out of 69 games covered by the licensing could not be sold or produced since they were not complete. Zoo further claimed that it had already spent $500,000 on finishing the games so that it could sell them. Besides, Zoo alleged that it had already paid royalties to New World in the amount of $500,000.
New World IP LLC v. Zoo Publishing Inc. et al
United States District Court, Southern District of New York
Case No.1:11-cv-02532, Filed on April 13, 2011
In August of 2011, the case was dismissed since the parties reached a confidential settlement agreement outside of court.