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Wednesday, August 17, 2011

Zynga Hit With Another Lawsuit

Zynga may need to modify its logo to more accurately reflect their business.
This time, it's not Vostu suing Zynga; it's a company called Agincourt Gaming. They have a Facebook game called Pantheon, and apparently a couple of patents regarding in-game rewards and prizes. Agincourt Gaming apparently acquires social gaming companies, and they picked up Pantheon. The patents in question are 6,758,755, issued in July 2004; and 6,306,035, issued in October 2001, which means they are relatively ancient. At least, older than Zynga, which was founded in 2007. At least at a cursory glance, the patents seem to resemble Zynga's prize system Rewardville and the graphical system for showing such credits. Experts will have to pore over the patents and exactly how Zynga implements its systems to see if there's infringement.

Of course, depending on how broadly the patents are written, this lawsuit could be just the first of many against other social gaming companies. Why Zynga? Well, no doubt it has to do with the fact that it is the biggest social gaming company, and therefore has the deepest pockets. Especially with an upcoming IPO that could value the company at $20 billion.

Zynga, as is normal in these sorts of cases, has declined to comment. We probably won't hear much until after a whole bunch of legal paperwork gets filed back and forth, and lawyers have had a chance to look over the battlefield. Often, these patent cases get settled quietly out of court. I suspect the timing of this suit is no accident; the plaintiff's lawyers probably figured that with Zynga getting its IPO ready, they have an extra incentive to settle quietly before a legal cloud casts a shadow on the IPO.

Zynga's legal team will be racking up the billables between this and the Vostu case and all the others they're facing. Others? This isn't even the first lawsuit of the summer for Zynga; Segan LLC, based in Long Island City, New York, sued July 29 in Delaware federal court alleging patent infringement. And a company called SocialApps has filed suit against Zynga, claiming the big Z stole their source code and used it to make Farmville. Zynga's no stranger to lawsuits, having dealt with several already in its short history. No doubt there will be many more.

Those big piles of money cast a sweet scent that tends to attract lawsuits...

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