Zynga Settles Lawsuit Against Playdom

One of the longer-running fights in social gaming has come to and end, with Zynga and new Playdom owner Disney settling a lawsuit in which Zynga alleged trade secret theft and other offenses partially stemming from a former Zynga employee who defected to Playdom.

The lawsuit has taken various turns through 2010, including an injunction against a Playdom game, which was never released, and the handing down of a fine and deferred sentence for the former Zynga employee, Raymond Holmes.

Settling with Disney likely made sense for Zynga. The lawsuit itself was a holdover of the chaotic industry growth and rampant copycatting of 2009; Zynga itself paid almost $10 million to the creator of Mob Wars for copyright infringement. Playdom’s own mob game, Mobsters, was involved in the Zynga-Playdom litigation.

Facebook has, for the most part, moved on from crime games. But court fights over the genre aren’t quite done yet. In August, Digital Chocolate brought suit against Zynga over the Mafia Wars name, which the former had trademarked for its own iPhone game before Zynga started using the name on Facebook.

Mafia Wars is the last crime game standing with over 20 million monthly active users, so the spat over the name could get ugly. As we noted earlier today, Digital Chocolate has gotten serious about Facebook, but it’s unclear whether the company is simply being aggressive or intends to launch its own Mafia Wars title on Facebook.

Trademark issues differ somewhat from the copyright problems at issue in the Zynga / Playdom lawsuit. For more on how to choose and protect trademarks in social gaming, head over to our recent guest post by Sheppard Mullin associate Thayer Preece.