Easiest way to lose your intellectual property? When your departing employee walks your intellectual property right out the door. It happens far too often and the insider threat you thought of as a hypothetical? Well, it is now a reality.
This is what apparently happened to Zynga.
Zynga (yes the game company is still alive and kicking) alleges in their complaint (United States District Court Northern District of California), that a number of employees have left their employ and went to a competitor, Scopely, with Zynga’s intellectual property in hand.
Nothing wrong with jumping ship to a greener pasture. Non-compete does not exist in California … so the move is all good. However, it’s not ok to take the intellectual property of your employer (even if you had a hand in creating it) out the door with you for use at your next employer.
Let’s look at the ‘alleged’ smoking guns.
Zynga filed suit against a direct competitor, Scopely. The claim: Former-employees departed Zynga and took (stole) the intellectual property of Zynga on their way out the door and directly to Scopley.
How much of Zynga’s intellectual property did the departing employee(s) take? What other agreements did the employees violate?
The complaint alleges:
Massimo Maietti (Maietti worked for Zynga as a senior level game designer and is now employed by Scopely as a Vice President and General Manager of Product Development). Forensic examination of Maietti’s laptop two days after his departure from Zynga showed how one day before he tendered his resignation he downloaded Zynga Google Drive folders to his laptop. Maietti then inserted a USB drive into the laptop, copied all the folders to the USB drive. The laptop drive’s “trash” file contained 20,000 files. An analysis of the corresponding Google Drive folders revealed that Maietti took over 14,000 files and approximately 26 GB which were from the folders. Within this treasure trove of documents was Zynga’s new Project Mars. (NOTE: Maietti’s access to these files were within his Zynga approved access, i.e. he had natural access to these folders on the Zynga Google Drive.)
Ehud Barlach (Barlach worked for Zynga as General Manager of Hit It Rich! Slots (“Hit It Rich!”). Forensic examination of Barlach’s Zynga issued computer revealed that when Barlach accepted Scopely’s offer of employment, he also offered to help Scopely raid Zynga’s workforce, which Scopley’s HR representative noted that had he not offered they would have asked on his first day.
It’s a dog eat dog world in the trenches of employee retention, and Zynga details the wholesale raid by Scopely on its talent pool, as a result of their contact with Maietti and Barlach. Three of which were Derek Heck, a Product Manager, Evan Hou, a Manager Data Analytics, and Zynga Lead Product Manager, Joshua Park.
The complaint indicates Zynga’s forensic analysis reveals “Barlach, Heck, and Hou all attached external USB devices to their Zynga-issued laptop computers in the weeks before resigning to go to work for Scopely. Heck also deleted more than 24,000 files and folders in the last month of his employment with Zynga, and referenced articles entitled, “How to erase my hard drive and start over” and “How to Erase a Computer Hard Drive…”.
What did Zynga do right?
They had their departing employees attest they had returned all Zynga’s intellectual property prior to their departure.
They also had the departing employee agree and sign that they would not solicit employees from Zynga for a period of one year.
“Maietti reaffirmed in writing that he had returned all of Zynga’s trade secrets and would not solicit its employees.”
They also preserved the laptop hard drives of employees who departed to competitors. The complaint explains: “Zynga realized that its key talent was being solicited and hired by Scopely with increasing frequency, Zynga commissioned a forensic examination of the departed employees’ computers, going back to Maietti’s resignation months earlier.”
Demonstrated forensic support capability should be in every company’s arsenal (in-house or out-sourced), Zynga was able to include the time line of Maietti’s removal of their intellectual property from the Google Drive to the laptop and then to the USB drive in their complaint.
• 9:01 a.m. – External USB device connected to laptop
• 9:04 a.m. – Google search for “download a google drive folder”
• 9:06 a.m. – Zip files downloaded to laptop
• 9:20 a.m. – Zip files copied onto external USB device
• 10:18 a.m. – Original Zip files placed in Trash (but not the copies Maietti created on his USB device)
Want to learn more and draw your own conclusions. Here is the Zynga complaint and the Scopley response — good reading.
How this plays out will be one worth watching.