Activision
dropped the title after they took over Vivendi because they had no interest in publishing anything that couldn't be "
exploited on an annual or near-annual basis".
Then EA decided to publish it and now that it's actually getting a lot of hype Activision wants it back.
Whether or not their suit has any legal basis (which I doubt) is frankly irrelevant as their behaviour is completely unethical, no better than patent-trolling... If EA or someone else hadn't stepped in, Brutal Legend would be sitting in the archive of abandoned projects right now.