* EA had alleged Zynga's "Ville" copied EA's "Sims Social"
* Zinga had accused EA of violating employee recruiting pact
* Settlement terms not disclosed
By Jonathan Stempel
Feb 15 The video game publisher Electronic Arts
Inc and social gaming company Zynga Inc have
agreed to settle competing lawsuits over alleged copyright
violations and the recruiting of employees.
Terms of the settlement were not disclosed, but both
companies agreed to permanently drop claims they had raised in
litigation begun last August in San Francisco federal court.
Electronic Arts had alleged that Zynga's new game "The
Ville" ripped off EA's "The Sims Social," which had been
launched the prior August and at one point become Facebook's
second most popular game ahead of Zynga's "FarmVille."
It said Zynga was able to clone "The Sims Social" in part
with the help of executives it had hired away from Electronic
Arts, and who had access to critical information on how that
game was developed.
Six weeks later, Zynga countersued, accusing Electronic Arts
of trying improperly to stop employees from switching companies.
Zynga said this violated a 2011 agreement between the companies
over employee solicitations.
In separate emailed statements on Friday, Electronic Arts
spokesman John Reseburg and Zynga spokeswoman Kelly Kunz said:
"EA and Zynga have resolved their respective claims and have
reached a settlement of their litigation in the Northern
District of California."
Silicon Valley companies compete intensely to attract
talented employees, but sometimes agree to refrain from poaching
each other's workers. In 2010, several companies agreed with
U.S. antitrust authorities to stop entering such agreements.
Zynga is based in San Francisco, and Electronic Arts is
about 25 miles south in Redwood City, California.
In October, Zynga said it would significantly scale back its
investment in "The Ville" as part of a cost-cutting plan that
included the phasing out of 13 older titles.
The company on Feb. 5 reported a $6.9 million adjusted
fourth-quarter profit, surprising analysts who expected a loss,
but posted a net loss of $209.5 million for all of 2012.
In afternoon trading on the Nasdaq, shares of Electronic
Arts were down 20 cents at $16.95, and shares of Zynga were down
6 cents at $3.19.
The case is Electronic Arts Inc v. Zynga Inc, U.S. District
Court, Northern District of California, No. 12-04099.