Redwood City video game publisher Electronic Arts (ERTS) and San Francisco social gaming company Zynga 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
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.
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.