TimeGate Studios faces $7.35 million in damages and has lost control of the Section 8 license following a successful appeal by SouthPeak Interactive. TimeGate Studios tried to defend a lower court ruling in the fraud lawsuit from SouthPeak Interactive after that court threw out an arbitration decision that led to the judgment.
The legal battle between TimeGate and SouthPeak began in 2009, when TimeGate sued the publisher alleging multiple breaches of contract. SouthPeak countered in court that it was TimeGate that breached the contract by "failing to put forth its best efforts in developing" Section 8. Both parties ended up in arbitration, who found in favor of SouthPeak and awarded the company $7.35 in damages and control of the Section 8 game license. This decision was later overturned in federal court last March.