Zynga Accuses Playdom of Stealing Trade Secrets; Judge Issues Temporary Restraining Order

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There’s no love lost between competing social gaming platforms Zynga and Playdom. Earlier this year Zynga sued Playdom over what they called misleading ads. That litigation appears to remain outstanding, but Playdom has since changed their advertising practices.

Now there’s a much more serious dispute between the companies. Yesterday Zynga filed a lawsuit against Playdom and a number of other defendants in California state court. Among the many causes of action: misappropriation of trade secrets, breach of contract, breach of the duty of loyalty, tortious interference with contracts, tortious interference with existing and prospective economic advantage and unfair competition. The defendants include four ex-Zynga, now Playdom employees as well.

What this boils down to: Playdom has allegedly hired away a number of Zynga employees, and those employees have allegedly taken key information and documents from Zynga and have given them to Playdom. Among the most important documents that were supposedly stolen: The Zynga Playbook:

The Zynga Playbook is literally the recipe book that contains Zynga’s “secret sauce,” and its contents would be invaluable to a competitor like Playdom. The Zynga Playbook constitutes a collection in one document of many of the most material non-public commercially valuable concepts, techniques, know-how and best practices for developing successful and distinctive social games. The Playbook is the result of years of testing, development, trial and error, analyzing customer behavior, game behavior, optimizing past successful techniques, and collective know-how that Zynga has spent millions of dollars and more than tens of thousands of man hours developing and devising, and which could only be compiled by developing and deploying successful games over a period of years to millions of them. In the hands of a competitor like Playdom, this document alone creates huge exposure to Zynga as it breaks down in detail and memorializes the company’s key and collective efforts to develop and fit games to the social networking platform in the most successful manner. It is a “how-to” manual that belongs to Zynga.

Zynga accuses Playdom of actively soliciting Zynga employees to turn over proprietary information:

…Playdom recruiter Jennifer Farris emailed Defendant Martha Sapeta, a then-current Zynga employee who owed her undivided loyalty and best efforts to Zynga, with a “small assignment” as part of an upcoming and lengthy recruiting and interview meeting. Playdom instructed Defendant Sapeta to “compare and contrast” the precise Zynga games she was working on to corresponding competing Playdom games. Sapeta was offered “bonus points” if she could “propose a feature in [Playdom's competing] game that [she][thought] whould improve [user] growth.” Playdom even suggested the feature “can be a straight up ripoff from our competitors [i.e., Zynga's] app,” but with the caveat that Sapeta would “still have to explain in detail” how the ripped off features would work in Playdom’s competing game.

Specifically, Zynga accuses an ex-employee of downloading 70 files to a USB storage device two weeks before leaving to join Playdom. Three of the files were proprietary Zynga documents. Another defendant mailed 22 proprietary documents to his personal email account before departing to Playdom. The Zynga Playbook was among them.

The judge granted the request for a temporary restraining order against Playdom and the other defendants. Those defendants are prohibited from destroying any of the files allegedly misappropriated.

Neither company would comment on this story.

Update: The relevant court documents are here.

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