Zynga's Employee Invention Assignment and Confidentiality Agreement with Alan PatmoreBy http://profile.typepad.com/1237764140s22740 // December 17, 2012 in Employment, Games, Property Rights
I've just started looking at documents filed in the Superior Court of California, County of San Francisco, in connection with a suit brought by the game maker Zynga. Zynga filed the suit initially against its former employee, Alan Patmore, and has since amended its complaint to name Patmore's new employer, another game company, Kixeye, as well.
Patmore is a big deal in the game industry. In an entry that appears to pre-date Zynga's lawsuit, Wikipedia credits Patmore for delivering many succesful games, including one from 2002 based on The Lord of the Rings, which, Wikipedia says, sold 1.8 million copies. "Patmore," Wikipedia states, "is a much sought-after authority within the industry on topics including project management, creative development, and industry trends and practices."
Keep the phrases "project management" and "industry trends and practices" top of mind, because the coutcome of the fight among Zynga, Patmore and Kixeye may well turn on the extent to which distinctions can be drawn between Zynga-specific trade secrets, on the one hand, and general game industry expertise, on the other.
Though we're not going to unpack the various allegations, counter-allegations and defenses in the lawsuit, not today.
Instead, we'll begin our look into the case by reviewing an Employee Invention Assignment and Confidentiality Agreement between Zynga and Patmore, which was appended as an exhibit to Zynga's initial complaint.
Because Zynga is based in California and because Patmore lives in California and worked for Zynga in that state, we know Patmore's agreement with Zynga is not going to include any express post-termination non-compete covenant. To the extent that Zynga wants to impede what Patmore might accomplish for Kixeye, it is going to have to allege and show behavior on the part of Patmore that is unfair, illegal, or in breach of a contractual covenant (other than a non-compete).
Is there anything unusual in that Employee Invention Assignment and Confidentiality Agreement that might tend to give Zynga's claims broader scope?
No and yes.
By and large, the Zynga Employee Invention Assignment and Confidentiality Agreement is standard and what you would expect to see in use by an angel or VC-backed startup or emerging technology company. The Agreement requires the employee:
- to acknowledge that his work for the company is work for hire,
- that he assign company inventions to the company,
- that he schedule out prior inventions he means to retain,
- that he waive moral rights, and
- that he keep the company's proprietary information confidential.
The Agreement also contains a one-year, post-termination covenant to not solicit Zynga employees or consultants.
All of the foregoing is normal. But there are two nuances in the Zynga Employee Invention Assignment and Confidentiality Agreement, pieces of bespoke drafting, that could be important, from Zynga's perspective, in expanding the scope of what may be fairly regarded as trade secrets for purposes of this case.
The first bit of custom drafting is in the definition of Proprietary Information. Here's an excerpt of what the Agreement says are examples of the kinds of information that ought to be regarded as proprietary to Zynga:
"Proprietary Information may include information I learn about or develop in connection with my employment with the Company, such as: . . . (ii) techniques and methods for developing, coding, or improving online social games; (iii) techniques and methods to create 'virality;' (iv) measurement techniques, and specific functionality that increases monetization and both measures and increases retention metrics; . . . (xi) the particular needs and preferences of the Company's suppliers, platform providers and business partners, and the Company's approaches and strategies for satisfying those needs and preferences . . . ."
Arguably, much of what is described in these examples could fall under the rubric of general industry knowledge or experience gained through work for a succession of employers. By including these items in a "laundry list" of what should be regarded as proprietary, Zynga is doing what it can to shift the balance somewhat, and expand, by virtue of agreement of the parties, the scope of what should be regarded as protected. On the other hand, and as you would expect, the Agreement has a standard carve-out to the definition of Proprietary Information, eliminating from the scope of what is protected such information as is generally known, was previously known, or is independently developed. This carve out will temper the expansive effect of the "laundry list."
And here's the second bit of custom drafting, an entire section of the Agreement that is clearly calculated to secure an employee's acknowledgment of an expansive view of what should be regarded as trade secret:
"14. Non-Solicitation of Suppliers/Customers. During and after the termination of my employment with the Company, I will not directly or indirectly solicit or otherwise take away customers or suppliers of the Company if, in so doing, I access, use or disclose any trade secrets or proprietary or confidential information of the Company. I acknowledge and agree that the names and addresses of the Company's customers and suppliers, and all other confidential information related to them, including their buying and selling habits and special needs, whether created or obtained by, or disclosed to me during my employment, constitute trade secrets or proprietary or confidential information of the Company."
The title of the section leads you to believe you'll find an express, post-termination restrictive covenant, though the actual drafting is circular. The net intent appears, again, to get the employee's buy-in to an expansive view of the kinds of information that should be regarded as proprietary to Zynga.
To be continued.
Photo credit: VideogameVisionary.com, Alan Patmore in 2008, as posted on Flickr.