According to a former employee of Activision's to-be-shut-down Foster City studio (aka Activision Underground), Infinity Ward is currently negotiating with the company to reclaim exclusive development rights for the Call of Duty franchise.

Infinity Ward was the original developer of CoD 1and CoD 2, as well as CoD 4 (PS3, Xbox 360, PC, DS).

Call of Duty 3, launched in 2006 for the PS2, PS3, Wii, Xbox 360, and Xbox, had been developed by Activision's Treyarch studio. The same studio is currently tasked with developing Call of Duty 5.

What makes this rumor all the more interesting is that Infinity Ward's re-negotiation with Activision may have ties with Underground's upcoming closure. According to the ex-employee, Underground had been working on two projects before it was shut down: the PS3 port of Enemy Territory: Quake Wars, and a CoD spin-off.

Far from an FOS, the spin-off game would have been a third person action-adventure affair that was expected to become a yearly franchise. Unfortunately, when Infinity started its re-negotiations, it also meant that Activision's studios could no longer develop any CoD-related games.

At the moment, the validity of this rumor is unclear, given that both Activision and Infinity Ward have yet to comment regarding the negotiations. We'll leave this in the rumor mill for now, at least until more substantial information can be found.