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Trading Secrets A Law Blog on Trade Secrets, Non-Competes, and Computer Fraud

Zynga Sues Former Employee For Trade Secret Theft While Defending Its Acquisition Of Other Alleged Proprietary Information

Posted in Computer Fraud, Data Theft, Practice & Procedure, Restrictive Covenants, Trade Secrets

On October 12, 2012, Zynga, a major provider of social game services based in San Francisco, filed suit against its former general manager of its highly successful CityVille game, Alan Patmore. Zynga alleges that Patmore, after allegedly refusing to acknowledge his confidentiality obligations, wandered out of the offices of Zynga with 760 computer files, which he uploaded to his personal Dropbox account. Adding fuel to the fire, Patmore then allegedly attempted to uninstall Dropbox from his computer, leaving forensic artifacts in his wake. Included in the allegedly copied files were:

• Data concerning the method by which Zynga identifies which games and game mechanics will be successful;

• Internal assessments of every game feature rolled out over the last quarter for CityVille;

• Internal assessments and lessons learned for Zynga’s other hit games;

• The green-lit design document for an unreleased game in development; and

• Confidential revenue information.

In addition to the various files, Zynga alleges Patmore also copied his entire email box, containing fourteen months of confidential communications.

Published reports indicate that Patmore is joining Zynga rival Kixeye.

Although there are many things notable about this lawsuit (including the decision by Zynga not to bring a CFAA claim following the recent 9th Circuit decision in United States v. Nosal), perhaps the most interesting aspect of this case is an element often over-looked in trade secret cases: proving Zynga actually has a proprietary interest in the information removed.

As some readers may recall, we blogged on the litigation between Zynga and its competitor, SocialApps, LLC (“SA”), wherein SA alleged that Zynga had stolen the source code for FarmVille during due diligence of its company. There, the court held that while certain images and features were available in the public domain, issues remained as to whether Zynga had improperly accessed and used SA’s proprietary source code. Complicating this further, Zynga is enmeshed in litigation with EA Sports, who, in August, sued Zynga for copyright infringement, claiming it  improperly utilized copyrighted material from EA’s “The Sims Social,” which EA claims Zynga learned through its recent hire of key EA employees. Last month, Zynga countersued, alleging that EA had engaged in improper anti-competitive behavior by attempting to induce Zynga to enter into a no-hire agreement. In response, EA’s spokesman alleged that Zynga had engaged in a persistent plagiarism of other artists and studios.

In the end, Zynga may resolve this matter with Patmore without ever having to provide its proof to a jury (although based upon Kixeye’s recruiting video, it appears that Kixeye may put up a fight). This new case does, however, present a strong illustration of some of the underlying decisions a company has to consider before bringing trade secret litigation against a former employee who may know a company’s most internal secrets.