Judge Ralph Dau ruled that Vivid, which filed suit in April, could continue its case against Playboy, seeking compensation and damages for several business deals gone bad.
In the complaint, Vivid alleges Playboy violated the terms of a 10-year film distribution agreement that covered broadcast of Vivid films on cable TV networks, including the Playboy Channel, as well as video-on-demand TV packages.
"This is the first victory in a lawsuit that will show that Playboy did not pay us what they owed us and did not keep proper records," Vivid Co-Chairman Bill Asher said. "The suit will affirm that we had the right to terminate an agreement that Playboy has violated and we are now free to negotiate with third parties and to compete with Playboy."
Also at issue in the suit is Vivid’s allegation that Playboy failed to pay the company significant amounts of money under the terms of a cable network purchase agreement.
In 2001, Vivid agreed to sell three cable networks to Playboy. The $70 million deal included the TV assets of Califa Entertainment Group and brought Playboy ownership of Hot Network, Hot Zone and Vivid TV.
The deal originated from a 1999 option acquired by Playboy when it purchased Spice Entertainment.
“We anticipate that the eventual result of this lawsuit could be worth tens of millions of dollars to Vivid, and we are looking forward to proceeding to the discovery phase.”