Roblox Corporation v. WowWee Group Limited

Background

Roblox Corporation operates the Roblox Platform, an online gaming platform where users create and interact with games, experiences, and virtual items. Users agree to Roblox’s Terms of Use when creating accounts, and the terms include an arbitration provision covering “any dispute arising under or relating to the Roblox Terms or the Services.” The terms define the services to include Roblox’s platform.

The parties agreed that WowWee Group Limited, WowWee Canada, Inc., and WowWee USA, Inc. created “My Avastars” dolls and partnered with Gamefam to develop a related virtual experience on Roblox. Roblox alleged that the project violated its terms and intellectual-property rights. The WowWee defendants alleged that Roblox threatened WowWee and pressured Gamefam to withdraw from the partnership.

WowWee’s amended answer asserted a counterclaim by WowWee Group Limited and WowWee Canada, Inc. for intentional interference with prospective economic advantage and a counterclaim by WowWee USA for intentional interference with contractual relations. Gramps Goods, Inc. had also asserted a counterclaim, but voluntarily dismissed it.

Motion to Compel Arbitration

Roblox moved to compel arbitration of WowWee USA’s counterclaim for intentional interference with contractual relations. For purposes of this motion, the parties disputed only whether the arbitration agreement covered the counterclaim; WowWee did not dispute the agreement’s validity at the hearing.

The court held that the arbitration provision’s coverage was broad because it applied to disputes arising under or relating to both Roblox’s terms and its services. WowWee USA’s claim concerned Roblox’s alleged interference with an agreement to create a tie-in experience on the Roblox platform. The court concluded that the claim related to the platform and therefore fell within the arbitration agreement. The court granted the motion to compel arbitration of WowWee USA’s counterclaim.

Stay of Remaining Counterclaims

Roblox also asked the court to stay all remaining counterclaims while the arbitration proceeded. The court found that the remaining claims shared significant factual overlap with WowWee USA’s claim. It also found that the prospective-economic-advantage claims required the same showing as the contractual-interference claims, plus an additional element. For reasons of efficiency and to avoid prejudicing Roblox’s right to arbitration, the court stayed proceedings on the remaining counterclaims.

Disposition

The court granted the motion to compel arbitration of WowWee USA’s counterclaim for intentional interference with contractual relations. It stayed proceedings on all remaining counterclaims pending the arbitration’s outcome. The court did not yet rule on Roblox’s motion to dismiss the international defendants’ counterclaim for intentional interference with prospective economic advantage.