It appears that Activision and Electronic Arts (EA) have agreed to settle their part of the dispute over Jason West and Vince Zampella’s departure from Activision and the alleged luring by EA that caused it.

For those unfamiliar with the case, Activision originally sued Electronic Arts for allegedly pulling Infinity Ward apart by trying to lure away the two developers while they still had two years left on their contract. West and Zampella sued Activision after they were fired and seek more than $1 billion in damages (West and Zampella, in their original suit 2 years ago, demanded only $36 million). As for the latest agreement, the attorneys representing EA and Activision will ask that the court dismiss EA from the suit, effectively ending EA’s involvement in the case, but no further details of that settlement have been released.

In an emailed statement, Robert Schwartz, the lawyer for West and Zampella, was effusive:

“In dismissing EA today, Activision admits that it was never going to convince anyone that EA conspired with West and Zampella to breach their contracts or did anything else improper.”

This wipes out a major pillar of Activision’s defense. Activision’s story has thus far been that EA enticed West and Zampella to improperly break their contracts. By admitting that EA is not guilty of wrong-doing, Activision concedes the point that West and Zampella have made all along – that they left because Activision was taking advantage of their talents and time.

This does not, however, resolve the dispute between West-Zampella and Activision. It’s worth noting that many other designers and programmers left Activision after West and Zampella’s departure, and have also sued Activision for $350 million in unpaid royalties for their work on Modern Warfare 2. This ancillary suit has been rolled into West and Zampella’s case, and explains part of the enormous jump in damages sought, from $36 million to over $1 billion.

As a final twist to this unexpected settlement, Activision has hired a new chief counsel, Beth Wilkinson. Wilkinson, brought on to handle the case only a week ago, has also requested a 30 day stay of trial to allow her to “get up to speed”. The request was denied, and the trial is scheduled to begin on June 14, 2012.

For those looking to follow the case, the case is West v. Activision, SC107041, California Superior Court (Los Angeles County). Check back for more updates as this story develops!

Source: Bloomberg News