Machine Zone and Kabam politely resolve their trade secret lawsuit

Machine Zone and Kabam were at each other’s throats in a legal battle over alleged corporate espionage. But all is settled now.

The two Silicon Valley mobile game companies issued a joint release today saying that they had amicably resolved the trade secret lawsuit that Machine Zone filed against Kabam on August 13.

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“Kabam holds itself and its employees to a high standard of conduct, and we take any claim against us very seriously,” said Kent Wakeford, chief operating officer of San Francisco-based Kabam, in a statement. “The behavior of one employee as described in the lawsuit is not representative of how we do business. We’re glad that our companies can move forward.”

And Machine Zone offered its own kind words.

“Based on our discussions with Kabam, we have concluded that the concerns that prompted our filing the suit have been allayed,” said Machine Zone CEO Gabe Leydon, in a statement. “We are pleased to have amicably resolved the matter.”

A few weeks ago, things weren’t so happy. They were, as Kabam’s spokesman said at the time, like an episode out of the ridiculous HBO comedy show Silicon Valley.

Palo Alto-based Machine Zone sued after an incident that took place at a cocktail party during the Casual Connect game conference in San Francisco. Gabe Leydon, the chief executive of Palo Alto, Calif.-based Machine Zone and whose Game of War: Fire Age has been in the top charts for a couple of years, was at the party with Kabam employee Daniel Wiggins. Based on sources interviewed by GamesBeat, we believe Leydon is trying to raise a $500 million round of funding — a huge amount for a mobile game company. His pitch deck (a PowerPoint document) was apparently being circulated by investment bank Morgan Stanley, as we reported on June 25, well before the incident happened.

Wiggins and Leydon got in an argument while drinking at the cocktail party. During that bickering, Wiggins allegedly told Leydon that he had seen the confidential Machine Zone pitch deck. After that, Leydon became irate, and Machine Zone sued Kabam the next day. The companies began gathering testimony and witnesses, and some interesting insider details started to emerge. But that window into the business of gaming is shut now.

Machine Zone has one of the top games in the $30 billion mobile game business: Game of War: Fire Age. That title has helped it grow to more than 400 employees and reach more than 130 million people worldwide. Kabam has more than 825 people and a valuation above $1 billion.

The companies declined to comment further. Now they can go back to battling it out in the app stores.

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