Zynga Is "Extremely Pleased" With Playdom/Disney Litigation Settlement

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A little over a year ago Zynga sued rival game startup Playdom for, among other things, 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 included four ex-Zynga, then Playdom employees as well.

It’s been a fairly dramatic year of legal maneuvers. The day Zynga filed the lawsuit a judge issued a temporary restraining order against Playdom that prohibited Playdom from using any Zynga data. In March a different judge issued a preliminary injunction against Playdom that prohibited them from releasing a specific game (whatever game that was has been kept confidential). And then in August the big slap down against a former Zynga employee who had been found to have acted inappropriately.

The case continues, but the drama has reached its peak. The court today held one former Zynga and Playdom employee, Raymond Holmes, in contempt and sentenced him to ten days in county jail and a $4,000 fine. Fortunately for Holmes, Judge Mark Pierce then suspended the sentence. That means Holmes won’t do the time unless he continues to, well, piss off Judge Pierce. The full order is embedded below.

What did Holmes do? Lots of things apparently: destruction of evidence on laptop, destruction of Mozy backup, failure to identify other storage devices with Zynga documents and the signing of two false court certificates. The court says Holmes admitted to his improper actions and apologized.

Worse still for Playdom is the last sentence of the court document. It says it’s “appropriate to impose a non rebutable evidentiary presumption in favor of Zynga regarding the meta data lost when Def Holmes erased his hard drive.”

In the middle of all this Playdom got bought by Disney. And so it’s not surprising that Disney has settled this with Zynga before it actually went to trial, they don’t have any emotional investment in the feud.

What’s the settlement? No one’s talking, and Disney for whatever reason is always completely paranoid about specific financial terms leaking out. Just a few bland statements. A joint statement:

“Today, Zynga Game Network, Inc. and Playdom announced that they have reached a confidential resolution of their litigation.” -Zynga and Playdom

And Zynga’s statement with a little more color:

“Zynga is extremely pleased with the final resolution of its trade secret suit against Playdom and various individuals. The settlement reflects the very serious nature of the conduct involved, as reflected by the preliminary injunction, restraining orders, and contempt order issued by the Santa Clara Superior Court. We have great respect for Disney and are thankful that following its acquisition of Playdom, Disney resolved the matter to our satisfaction.” Reggie Davis, General Counsel, Zynga

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