Zynga Fights Electronic Arts With Counterclaims


     (CN) – Game developer Zynga has filed a countersuit against Electronic Arts claiming that the competing company has a monopolistic and “unlawful” scheme to keep employees.
     Zynga rose to popularity with social games for cellphones and Facebook including “Farmville,” “ChefVille,” “Words with Friends” and “Bubble Safari.”
     But it attracted a lawsuit from EA when it launched “The Ville” in July 2011.
     EA, which started out in 1982 as a pioneer in the home computer game industry, claimed that “The Ville” copied its Facebook game, “The Sims Social,” an offshoot of its popular life-simulation video game.
     By late 2011, “The Ville” had become the fastest-growing game on Facebook.
     In the San Francisco federal complaint, EA claims that Zynga infringed its copyright by “targeting and hiring away a number of high level executives from EA who had access to highly sensitive, internal EA information about the development of The Sims Social.”
     But Zynga says EA’s chief executive officer, John Riccitiello, is merely trying to stop an exodus of employees who want to defect to Zynga.
     “EA knows that none of the former EA executives it names in its lawsuit – John Schappert, Jeff Karp and Barry Cottle – transmitted any EA confidential information to Zynga because EA itself was involved in, and approved of, the exhaustive measures undertaken to ensure that did not happen,” Zynga said in a counterclaim last week.
     Despite years of competition and more than a billion dollars in acquisitions, EA has been unable to “compete in the social gaming space and was losing talent,” mostly to Zynga, according to the 22-page filing.
     “Desperate to stem this exodus, EA undertook an anti-competitive and unlawful scheme to stop Zynga from hiring its employees and to restrain the mobility of EA employees in violation of the spirit of the antitrust laws and California public policy,” Zynga attorney Claude Stern wrote. “EA sought, by threat of objectively and subjectively baseless sham litigation, what it could never lawfully obtain from Zynga – a no-hire agreement that would bar Zynga’s hiring of EA employees.”
     EA employees left because they were offered superior compensation packages, but Riccitiello did not want to look bad in the eyes of board members and shareholders, Zynga claims.
     Under California law, however, companies cannot restrict employees from going to work for competitors and cannot agree amongst themselves not hire each other’s employees.
     “Notwithstanding the law, EA’s specific objectives were to secretly restrict and chill a competitor, increase market costs, impose a de facto non-compete on key talent unbeknownst to the affected EA employees and stifle innovation in social gaming – all without its conduct ever coming to light,” wrote Stern, of Quinn Emanuel Urquhart & Sullivan in Redwood Shores, Calif.
     “EA’s conduct tampers with the employment market and impairs the ability of its employees to seek better job opportunities within the social gaming industry, and adversely impacts Zynga, as well as other industry competitors, from lawfully competing for EA’s employees,” Stern added.
     Zynga seeks an injunction prohibiting EA from threatening it with baseless, “sham” litigation and from interfering with its recruitment of employees.

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