Phase 10 inventor folds in dispute over top-selling card game

The inventor of the world's second-best-selling card game has settled a lawsuit with the Plainfield company that markets and distributes the game.

The battle over the rummy variation called Phase 10 began in December 2008, when Michigan inventor Kenneth Johnson accused Fundex Games Ltd. of copyright infringement, trademark dilution, fraud, conversion and theft in a case filed in U.S. District Court in Indianapolis.

The parties agreed to dismiss the case Oct. 22. Court records do not offer any information on a settlement, and attorneys for the inventor and the company did not immediately reply to phone messages.

Fundex still lists Phase 10 as among its stable of products on its website. The game is a whale for the company, selling more than 3 million copies per year, second only to Uno.

In the lawsuit, Johnson claimed the privately held Fundex withheld royalties, granted sub-licenses without his consent, failed to include Johnson's copyright notice on card games, and registered the Phase 10 mark for itself in the United Kingdom and France.

The principals of Fundex struck a deal for the game in 1986, paying Johnson a flat $60,000 and assigning him royalties on all future sales. The parties amended the agreement in 1996 and 2003, but the gist remained the same: Fundex had the right to market and sell Phase 10 and the first right to market new products related to the game, in exchange for making royalty payments.

The lawsuit says Johnson discovered in the summer of 2008 that Fundex wasn't living up to its end of the deal. He spelled out his concerns in two letters to the company. And he notified Fundex of plans to review its records on Phase 10, as allowed in the contract, but when his auditors arrived a month later the company refused to provide the requested information.

So Johnson, who received a trademark for the game in 1994, told the company he was canceling the deal. When Fundex continued to market and sell the game, he filed suit.

The dispute appears to have arisen at least in part over the company's push to repurpose and repackage the card game in multiple forms, including a mobile version.

In a separate case still pending in the same court, a local lawyer who invented the game “Chronology” also claims Fundex is illegally selling her game without paying royalties.

That suit, filed in March, says Fundex hasn’t paid public defender Jane Ruemmele royalties since October 2008. "Chronology" players try to place historical events and inventions in their proper place in time.