3Dfx Interactive Inc, the San Jose-based three-dimensional graphics chip maker, has filed a multimillion dollar breach-of- contract suit against Sega Enterprises Ltd, Sega of America and NEC Corp. 3Dfx maintains that Sega, with whom it had signed a contract in February to develop a graphics chipset for use in Sega’s game consoles, trashed the arrangement after 3Dfx had done everything it was expected to do under terms of the deal. The original contract called for 3Dfx to receive development payments from Sega, as well as royalties based on the number of consoles sold. Competitor NEC will now provide Sega with the chipsets it needs. In addition to breach of contract, the suit alleges unfair competition against NEC for interfering with the previous arrangement and misappropriation of trade secrets, as Sega has had access to 3Dfx’s technology and it may now be available to NEC. 3Dfx says it is seeking millions of dollars in damages against the defendants, and an immediate end to what it calls the defendants’ improper conduct. Sega and NEC could not be reached for comment.
