Alleged Theft of Zynga’s “Secret Sauce” – Settlement between Zynga and Playdom

Video Game Law Blog

November 29, 2010

Zynga Game Network and Walt Disney's Playdom have settled a lawsuit filed by Zynga just over a year ago.

FarmVille and Mafia Wars creator Zynga, one of the biggest maker of games on Facebook, filed the suit in September 2009, accusing Playdom and four Playdom employees of a variety of torts and breaches of duty, including misappropriation of trade secrets; breach of contract; breach of the duty of loyalty; tortious interefence with contract; and unfair competition. The four Playdom employees specifically sued had previously been employed at Zynga.

In pleadings filed in court, Zynga claimed that one specific former employee stole its "Playbook", which "is literally the recipe book that contains Zynga's 'secret sauce'". The pleadings state that the "Playbook" contains "the most material non-public ommercially valuable concepts, techniques, know-how and best practices for developing sucessful and distinctive social games". Zynga also alleged that Playdom asked the four former Zynga employees to provide confidential information regarding Zynga games, as a type of "assignment" for the employees.

Disney only recently acquired Playdom – which created Social City – and reportedly intends to use the game-making company to expand its presence on Facebook and other social networking websites.

The terms of the settlement, which also resolves the claims against the specific employees, have not been released. Disney, who recently acquired Playdom, declined to comment on the settlement. In a statement released by Zynga, its general counsel stated that Zynga was "extremely pleased" with the resolution.

For further information, go to Gamasutra and Bloomberg Businessweek