Zynga Wins, Loses in Latest Round of SocialApps Lawsuit

The Federal District Court in Oakland, California has denied a motion to dismiss a suit against Zynga brought by game developer SocialApps LLC. The developer accused Zynga of copying its Facebook game, myFarm. SocialApps claimed that Zynga had shown interest in buying the rights and code for myFarm and began the process sharing due diligence material. The companies entered into a letter agreement in May 2009 and SocialApps began sharing information and source code. ButSocialApps alleges that Zynga suddenly stopped communicating with them and used the myFarm source code to create FarmVille, which was released in June 2009.

SocialApps filed a lawsuit in July of 2011 claiming "misappropriation of trade secrets and breach of contract." Zynga's lawyers moved to dismiss the trade secrets and breach of implied contract claims in the suit in October of last year. Judge Yvonne Gonzales Rogers granted Zynga a motion on Monday dismissing the theft of trade secrets claims related to myFarm. The judge ruled that, because SocialApps’s myFarm was online six months before the May 2009 letter agreement, the images and features were already public. "Publicly available information, by definition, cannot be protected as a trade secret," she wrote.

The judge also ruled that three claims for breach of implied contract, confidence, and implied covenant related to the myFarm source code would not be dismissed. "The allegations here are sufficient to allege conduct beyond a mere breach of the terms of the agreement which would support a claim for tort damages," Judge Rogers wrote. Zynga did not seek a dismissal for SocialApps's claims of copyright infringement and breach of written contract.

SocialApps counsel Graham LippSmith of Giardi Keese said that the ruling "does not affect the lawsuit at all." He also said that damages will be "astronomical" given the success of FarmVille. Lawyers for the company plan to amend the dismissed claim, which the judge gave them space to do.

We will follow this story as it develops until it comes to a conclusion.

Source: Law.com

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