FOXA Fox Corporation

By Ben Fritz 

A visual-effects company has filed suit against two Hollywood studios and a videogame company, alleging unauthorized use of its technology.

Rearden LLC on Monday sued 21st Century Fox Inc.'s Twentieth Century Fox, Viacom Inc.'s Paramount Pictures and videogame publisher Square Enix Inc., as well as Square Enix subsidiary Crystal Dynamics Inc. in federal district court in San Francisco. It accuses the studios of copyright and trademark infringement and videogame makers of copyright and patent infringement for using its facial capture technology called MOVA Contour.

Rearden, controlled by Silicon Valley entrepreneur Steve Perlman, claims that a former employee stole and unlawfully sold MOVA to companies affiliated with the visual effects firm Digital Domain. The defendants used Digital Domain to perform work with MOVA on their movies and videogame, the complaint says. Rearden claims that based on prior relationships or due diligence, the defendants should have known that Rearden had exclusive rights to perform work with MOVA, not Digital Domain.

Rearden and the companies affiliated with Digital Domain have been battling in court since 2015. In June, a federal judge issued a preliminary injunction preventing Digital Domain from continuing to use MOVA. A trial in the case was held in December and a ruling is pending.

The technology was allegedly used by Fox in the movies "Deadpool," "Fantastic Four" and "Night at the Museum: Secret of the Tomb," by Paramount in "Terminator: Genisys," and by Crystal Dynamics and Square Enix in "Rise of the Tomb Raider."

Fox and News Corp, parent company of The Wall Street Journal, share common ownership.

Last week, Rearden sued Walt Disney Co. on similar grounds, claiming it used MOVA in its films "Beauty and the Beast," "Guardians of the Galaxy" and "Avengers: Age of Ultron."

A Fox spokesman declined to comment. Spokespeople for Paramount, Square Enix, Digital Domain and Disney didn't immediately respond to requests for comment.

As in the Disney suit, Rearden is seeking to stop distribution of the allegedly infringing movies and videogame until it reaches an agreement with the defendants, as well monetary damages.

Write to Ben Fritz at ben.fritz@wsj.com

(END) Dow Jones Newswires

July 24, 2017 19:07 ET (23:07 GMT)

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