We reported last week that Genius Products had filed an action against Activision, which recently acquired 7 Studios, claiming that the purchase of 7 Studios by Activision was to block the release of the Scratch video game so that Activision could release its own rival video game, DJ Hero.

7 Studios has now filed a counterclaim against Genius Products as part of the legal fight over the game, Scratch: The Ultimate DJ.  7 Studios claims that Genius caused the very conditions that have delayed the release of the game, including incompetence; and that this is the reason Genius is seeking to be released from its development contract.

The court ruled on the initial claim and granted Genius products and hardware company, Numark, a temporary restraining order against 7 Studios; the court also imposed a gag order and ordered immediate return of software code from Activision.

In filing its counterclaim, 7 Studios is hoping that the court will rule that Genius caused its own problems. The countersuit alleges that Genius failed to deliver required music tracks on schedule, and that only three months before Scratch was expected to be complete Genius had only delivered 25 percent of the total music planned for the game; also turntable peripherals had not been delivered on time to 7 Studios, causing production delays of several months and jeopardizing the inclusion of the turntable accessory in the Scratch game.

7 Studios has a vested interest in enforcing the contract so that it can retain its proprietary tools and royalty rights. We’ll keep you informed as the case and counterclaim unfold.